If the U.S. government allows a taxpayer to call a liability an asset and then acts to make the asset worthless, can the taxpayer take a tax loss for the loss of the so-called asset? The Citigroup, Inc. v. United States, No. 15-953T (Ct. Cl. 2018) court case addresses this fact pattern. The case gets to one… Continue reading Court May Explain How to Allocate Tax Basis to Intangible Assets
Tax Articles
IRS Can Use Probate Process to Extend Collection Period
When a loved one dies, the person who serves as the personal representative is tasked with wrapping up the decedent’s affairs and paying known creditors. But what if one of the creditors is the IRS? Can the probate process extinguish …
The IRS Isn’t Charged With Knowledge of Other Federal Agencies
The IRS only has to mail a notice of deficiency to a taxpayer’s last known address in order to assess or record a tax liability for the taxpayer. This “last known address” rule is often the subject of disputes. The Sadek v. Commissi…
The IRS Isn’t Charged With Knowledge of Other Federal Agencies
The IRS only has to mail a notice of deficiency to a taxpayer’s last known address in order to assess or record a tax liability for the taxpayer. This “last known address” rule is often the subject of disputes. The Sadek v. Commissioner, T.C. Memo. 2018-174, case provides an example where information available to the… Continue reading The IRS Isn’t Charged With Knowledge of Other Federal Agencies
IRS Installment Agreement Calculation Counts Spendthrift Trust Distributions
The IRS generally cannot reach funds in a spendthrift trust to satisfy the trust beneficiary’s unpaid tax debts. But can the IRS factor in trust distributions in calculating the how much the taxpayer can pay under an installment agreement? The …
Donations to Pastor are Taxable Income, Not Gifts
The distinction between taxable compensation and non-taxable gifts comes up in a number of contexts and has led to a number of tax disputes. Severance payments made to workers are an example. The recent Felton v. Commissioner, T.C. Memo. 2018-168, co…
Donations to Pastor are Taxable Income, Not Gifts
The distinction between taxable compensation and non-taxable gifts comes up in a number of contexts and has led to a number of tax disputes. Severance payments made to workers are an example. The recent Felton v. Commissioner, T.C. Memo. 2018-168, court case addressed this issue in the context of segregated donations made by a congregation… Continue reading Donations to Pastor are Taxable Income, Not Gifts
IRS Can Collect from Property Purchased in Corporation
Can a taxpayer put property beyond the IRS’s reach by purchasing the property in the name of a corporation or a third party? The answer is typically “no.” The recent Arlin Geophysical Co. v. United States, No. 2:08-cv-00414-DN-EJF (…
Planning for Start-Up Businesses, Yacht Rental Example
New businesses may not be immediately profitable. To help mitigate the financial risk, many businesses are started by workers who have a day job. If the business is not immediately profitable it can help the owner finance the business if the owner is…
Planning for Start-Up Businesses, Yacht Rental Example
New businesses may not be immediately profitable. To help mitigate the financial risk, many businesses are started by workers who have a day job. If the business is not immediately profitable it can help the owner finance the business if the owner is able to use the tax losses from the business to offset the… Continue reading Planning for Start-Up Businesses, Yacht Rental Example