The IRS recently released Notice 2008-63 in advance of a formal Revenue Ruling. This Notice provides guidance on the federal tax implications of private trust companies and similar trust arrangements. Notice 2008-63 confirms that private trust companies generally do not result in any estate, gift, or generation skipping tax benefits that could not be realized… Continue reading The Private Trust Company
Tax Articles
The Disqualified Employment Tax Levy
The IRS is generally required to give taxpayers notice of its intent to levy (or take) their property prior to it actually levying on the property. Congress recently amended the Code to provide the IRS with a new type of tax levy. This new levy is referred to as a “disqualified employment tax levy” and… Continue reading The Disqualified Employment Tax Levy
Getting Interest Abated Can be Challenging
The IRS has the authority to abate or remove interest on tax liabilities; however, the process for getting the IRS to exercise this discretion can be challenging. The U.S. Tax Court describes this process in Select Steel, Inc. v. Commissioner, T.C. Summary Opinion 2008-79. Facts & procedural History In Select Steel, the taxpayer was required… Continue reading Getting Interest Abated Can be Challenging
Unpaid Taxes & Assets Held by Third Parties
The IRS has broad powers to collect unpaid tax debts. This power is not unlimited. In Dalton v. Commissioner, T.C. Memo. 2008-165, the U.S. Tax Court looks at one limitation on the IRS’s collection powers, namely, the IRS’s ability to take property that is held by a third party to satisfy the taxpayer’s tax debt.… Continue reading Unpaid Taxes & Assets Held by Third Parties
U.S. International Tax Withholding and Reporting Requirements
Payments made by U.S. citizens and resident aliens (“U.S. persons”) to non-U.S. persons are typically subject to U.S. tax withholding and result in U.S. tax reporting requirements. These requirements can be difficult to understand and a misstep can prove to be very costly. U.S. Tax Withholding Whether a U.S. person is required to withhold tax… Continue reading U.S. International Tax Withholding and Reporting Requirements
The New Tax Return Preparer Penalty
The IRS has the ability to impose penalties on income tax return preparers for certain conduct. These rules changed last year, which makes it due time to provide an overview of the new rules. A Little Background As mentioned above, Congress amended the Code just over a year ago to beef up the tax return… Continue reading The New Tax Return Preparer Penalty
Sluggish Economy May Help Taxpayers With Unpaid Tax Debts
The sluggish economy is impacting all of us in one way or another. This is a scary time. Taxpayers who owe unpaid tax debts may feel even more helpless. This is especially true given the IRS’s focus on tax assessment and collection efforts. Coincidentally, taxpayers who find themselves subject to IRS collection action may also… Continue reading Sluggish Economy May Help Taxpayers With Unpaid Tax Debts
Tax Issues Faced by Pilots & Transportation Employees
Where a taxpayer is located when he incurs expenses and receives income can have significant tax implications. This can raise a number of difficult tax issues. This is especially true for pilots and other interstate transportation employees. The recent tax court case, Tucker v. Commissioner, T.C. Summary Opinion 2008-78, highlights a few of these difficulties.… Continue reading Tax Issues Faced by Pilots & Transportation Employees
Innocent Spouse Relief for Ex-Spouse’s Income
Innocent spouse relief can provide a much-needed remedy for divorced or separated taxpayers who filed a joint income tax return. This relief is commonly granted where the income that gave rise to the tax liability was earned by one spouse. The recent Mapp v. Commissioner, T.C. Summary Opinion 2008-76, case provides an opportunity to consider these… Continue reading Innocent Spouse Relief for Ex-Spouse’s Income
Understanding Debits & Credits
The accounting formula is assets less liabilities equals owner’s equity. The bookkeeping process categories transactions into subcategories under these three broad categories. How the transaction is recorded depends on whether the transact…