The now famous Murphy decision has left some uncertainties with regard to whether compensation for a personal injuries that are unrelated to lost wages or earnings are taxable. There can be little doubt that the IRS will ask the Supreme Court to settle the issue if the IRS is not successful in the coming Murphy… Continue reading Section 104 Survives Non-Murphy Constitutional Challenge
Tax Articles
IRS Uses Taxpayer Records to Secure Tax Fraud Conviction
Taxpayers who are being investigated for tax fraud should be very careful about turning over incriminating records to third parties. The recent Yang v. United States case provides an excellent example of how this can be a problem. The Yang brothers and their parents were being investigated by the IRS for tax fraud related to… Continue reading IRS Uses Taxpayer Records to Secure Tax Fraud Conviction
IRS Estate Tax Liens: Helpful or Harmful?
It can take years, if not decades, to resolve property disputes resulting after someone dies. The IRS is often not a direct party to these disputes, but it usually has an interest in what happens to the property. The IRS uses the general unfiled estate tax lien to protect its interest in a decedent’s assets. While… Continue reading IRS Estate Tax Liens: Helpful or Harmful?
Civil Restitution Tax Assessment Satisfied by Criminal Restitution Payment
According to the IRS’ tax attorneys, the “The court misconstrued the facts of the case.” That is the conclusion reached by the IRS Office of Chief Counsel in Chief Counsel Notice 2007-008. The case that the IRS attorney refers to is Creel v. Commissioner, 419 F.3d 1135 (2005). The Creel Case In the Creel case… Continue reading Civil Restitution Tax Assessment Satisfied by Criminal Restitution Payment
Referrals/Leads Group is Not a Tax Exempt Entity
In Private Letter Ruling 200709070 the IRS recently held that Exceptional Organizations, a standard referrals/leads group, did not qualify as a tax-exempt “business league.” This ruling presents a good opportunity to review a few of the requirements to qualify as a tax-exempt “business league.” What is a Tax Exempt Business Leage? A “business league” is… Continue reading Referrals/Leads Group is Not a Tax Exempt Entity
Courts Should Not Rely on Information from the Wikipedia
The Wikipedia is a popular internet encyclopedia that is written and edited online by anonymous individuals. As the popularity of the Wikipedia grows, so too does the perception that the Wikipedia provides accurate and reliable information. For instance, the United States Tax Court cited the Wikipedia today in its Ferguson v. Commissioner opinion. As the… Continue reading Courts Should Not Rely on Information from the Wikipedia
Health Reimbursement Arrangements: Employer-Provided Medical Coverage
The business enterprise presents taxpayers with numerous tax planning opportunities. Many of these tax planning opportunities include pulling money out of the entity in a way that benefits both the business and its owners and employees on an after-tax basis. As with employer-provided education benefits, employers may be able to minimize their tax obligations by… Continue reading Health Reimbursement Arrangements: Employer-Provided Medical Coverage
Tournament Poker Accorded Same Tax Treatment as Live-Action Poker
Today, in Tschetschot v. Commissioner, the tax court ruled that taxpayers where not entitled to treat tax losses from tournament poker different than tax losses from live-action poker. Facts & Procedural History In Tschetschot, the taxpayer had earned $49 thousand dollars from her day job and $11 thousand dollars from gambling. The taxpayer claimed a… Continue reading Tournament Poker Accorded Same Tax Treatment as Live-Action Poker
Cash Payments Deposited by Salesman & the Form 8300
Cash-based businesses pose a number of problems for the IRS. They may also be involved in tax fraud. The Form 8300 allows the IRS to track cash payments for this very purpose. Chief Counsel Advice Memorandum 200707001 provides an example involving cash payments deposited by a salesman for a car dealership. Facts & Procedural History… Continue reading Cash Payments Deposited by Salesman & the Form 8300
Years Combined for U.S. Tax Court Small Case Limit
The U.S. Tax Court’s rules allow taxpayers to elect small case status to avoid some of the technical litigation rules that they may not be familiar with. To qualify for small case status, do you combine the amounts from all open tax years in determining whether small case status is available? The court addressed these… Continue reading Years Combined for U.S. Tax Court Small Case Limit