One would think that the IRS using paid informants to identify compliance-challenged taxpayers would generate some controversy. But it really hasn’t. As a new TIGTA audit report reveals, the IRS Informants Rewards Program hasn’t generated much controversy because the program has been so poorly administered. About the IRS Whistleblower Program The informant process begins when… Continue reading IRS Looks At Improving Informants Rewards Program
Tax Articles
New Offer in Compromise Legislation
As discussed in a previous post, Congress has been toying with making changes to the IRS offer-in-compromise program. These changes were included in the “Tax Increase Prevention and Reconciliation Act”, which was signed by President Bush on May 17th. New Changes – Offer In Compromise As such, offers in compromise filed after the magic date,… Continue reading New Offer in Compromise Legislation
Prisoner Entitled to Collection Due Process Hearing
There are quite a few rights taxpayers have, that are disregarded by the IRS, and there is no remedy when it happens. As noted in Butti v. Commissioner, TC Memo. 2008-82, the IRS collection due process hearing is not one of those circumstances. The Facts & Procedural History Butti is a former chiropractor that is serving… Continue reading Prisoner Entitled to Collection Due Process Hearing
Tax on Military Benefits for Disabled Soldiers
Few would argue that soldiers and military personnel, especially veterans, should be afforded certain privileges. In American society as of late these benefits have included free or reduced cost education, health benefits, and in some cases, retirement benefits. Yet, the courts, and ultimately Congress, have been less giving with regard to the tax treatment of… Continue reading Tax on Military Benefits for Disabled Soldiers
Abatement of Tax Penalties and Interest
Many unfortunate taxpayers find themselves in the position of owing a tax debt that consists of a small tax liability and a large assessment of tax penalties and interest. In many of these cases the penalties and interest can be substantially larger than the original tax debt. This situation often forces taxpayers to seek the… Continue reading Abatement of Tax Penalties and Interest
Tax Treatment of Settlement Agreements (Again)
The classification of settlement payments for purposes of federal income taxes continues to be a problem for taxpayers and for their legal advisers. The Ninth Circuit, in Rivera v. Baker West, Inc., recently upheld a lower court’s determination that an employer correctly withheld federal taxes from a settlement agreement paid to a former employee. FACTS… Continue reading Tax Treatment of Settlement Agreements (Again)
Estate Plans in Uncertain Times
With 2006 fast approaching I can’t help but pause to think about our estate and gift tax regime. The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 changed the rules of the game. Following the enactment of EGTRRA estate planners and tax attorneys went to work defining and clarifying how estate plans should… Continue reading Estate Plans in Uncertain Times
Entrepreneur Rollover Stock Purchase Plans
Financing a business start-up can be a challenge. Most traditional lenders require that a business be operational for at least a year before they will provide small business loans. Moreover, venture capitalists are quick to reject most start-up proposals and if the venture capitalist is willing to fund the start-up they typically demand a significant… Continue reading Entrepreneur Rollover Stock Purchase Plans
Basic Estate Administration and Taxes: Elections & Timing
This post is written to remind non-tax attorneys who administer estates of a few basic tax issues that must be considered in administering estates. From a tax perspective, estate administration is all about making elections and timing distributions, income and expenses. IRC 441 The first group of elections involves selecting tax years. IRC § 441… Continue reading Basic Estate Administration and Taxes: Elections & Timing
Drug Addiction Excuse for Filing Tax Return Late?
Can drug addiction or migraines be an excuse for filing a tax return late? The court addresses this in Jordan v. Commissioner, T.C. Memo. 2005-266, for a life insurance salesman who became addicted to OxyContin prescribed for his severe headaches. Facts & Procedural History Mr. Jordan was a life insurance salesman. Mr. Jordan had a… Continue reading Drug Addiction Excuse for Filing Tax Return Late?