Even the IRS sometimes forgets that it has the burden to prove that a taxpayer earned more income than reported. The Allman v. Commissioner case provides an example of what happens where the IRS attorney shows up to court with no evidence of additional income. Facts & Procedural History The taxpayer worked as an employee for… Continue reading The IRS Has the Burden of Proof for Items of Income
Tax Articles
No Tax Penalties for Obscure Tax Forms
Bad facts can create bad law. This describes the law for IRS penalties. The IRS abates or removes penalties at the administrative level for most taxpayers who have good facts. The rest of the cases are litigated–resulting in a lot of court cases where the government wins. It is somewhat rare for taxpayers to prevail… Continue reading No Tax Penalties for Obscure Tax Forms
5 Things to Prepare for an IRS Audit
The IRS audit rate is quite low. But lucky you, you have received an IRS audit notice. Fun stuff. So what do you do? Or what can you do to prepare? There are several things that you might start with. Before getting into those, let’s stop to think about how the IRS audit process. The… Continue reading 5 Things to Prepare for an IRS Audit
Planning for and Documenting Covenant Not To Compete Allocation
The recent Becker v. Commissioner, 92 T.C.M. 481 (2006), case shows why it is important for taxpayers to plan and document transactions at or near the time that the transactions take place. This is particularly true for larger dollar transactions. The transaction in the Becker case involved the sale of a family-owned business and a… Continue reading Planning for and Documenting Covenant Not To Compete Allocation
Should the IRS be Able to Rewrite Tax Laws that it Doesn’t Agree With?
Estate of Gerson shows how the IRS uses its ability to promulgate regulations and how the IRS positions cases for litigation in an effort to create pro-IRS tax laws. Facts & Procedural On Gerson’s Case Gerson is a generation skipping transfer tax case. Mr. Gerson created a revocable trust that became irrevocable upon his demise.… Continue reading Should the IRS be Able to Rewrite Tax Laws that it Doesn’t Agree With?
IRS “Its All or Nothing” Stance Often Helps Taxpayers
It can be difficult to determine if a person is an employee or an independent contractor. The Rabinowitz v. Commissioner case highlights the difficulties that taxpayers face in making this distinction. Facts & Procedural History Rabinowitz is an insurance salesman. Rabinowitz asked the IRS and, upon IRS refusal, the U.S. Tax Court to lift a… Continue reading IRS “Its All or Nothing” Stance Often Helps Taxpayers
The Section 44 Small Business Disabled Access Credit
The Section 44 small business disabled individuals tax credit provides a tax incentive to comply with the Americans With Disability Act of 1990 (“ADA”). There is very little guidance for the tax credit. The recent Arevalo v. Commissioner, No.?05-61129 (5th Cir. 2006), case provides an opportunity to consider this tax credit. Facts & Procedural History Arevalo “invested”… Continue reading The Section 44 Small Business Disabled Access Credit
What Are the Chances of Being Audited?
What are the chances of being audited? While the IRS does not release many of the factors that it uses to identify taxpayers for tax audits, the IRS does release general statistics that can help gauge an individual’s audit potential – or can they? The IRS Statistics Looking at the most recent IRS statistics for… Continue reading What Are the Chances of Being Audited?
IRS Statistics for Audit and Enforcement Rates
While the IRS does not release many of the factors that it uses to identify taxpayers for tax audits, the IRS does release general statistics that can help gauge a taxpayer’s audit potential. These statistics help answer the question of “what are the chances of being audited?” IRS Audit Rates Looking at the most recent IRS… Continue reading IRS Statistics for Audit and Enforcement Rates
An Example of How Our Tax Laws Favor the Wealthy
In my tax practice, I have noticed that the tax laws for issues that face my wealthy clients are often much more friendly than the tax laws for issues that face my not so wealthy clients. The most recent Vines v. Commissioner case and the Cowan v. Commissioner cases provide examples. Facts & Procedural On… Continue reading An Example of How Our Tax Laws Favor the Wealthy