The best laid tax plans often go awry as tax laws and life circumstances change. In other cases tax plans go awry because they were improperly conceived. I have been encountering a number of NIMCRUTs that should not have been undertaken. The NIMCRUT, otherwise known as the net income with makeup charitable remainder unitrust, is… Continue reading Sometimes It is Best Not to NIMCRUT
Tax Articles
Taxes & Gay and Lesbian Marital Rights
Various states have enacted laws to stop recent attempts by gay and lesbian groups to achieve full marital equality. While these laws address marital rights, they do not address rights when it comes to fair treatment for Federal income tax purposes. The Dispute: Filing Status What would a challenge to fair treatment for Federal income… Continue reading Taxes & Gay and Lesbian Marital Rights
Can the IRS be Friendlier and More Efficient at the Same Time?
The Treasury has been working on stepping up its exam and collections efforts. As a result the IRS appears to be moving back its pre-Revenue Restructuring Act (RRA) of 1998 posture, which was enacted as a result of numerous IRS abuses. Yet, the IRS is still bound by the RRA. Are We Asking Too Much… Continue reading Can the IRS be Friendlier and More Efficient at the Same Time?
The Bankruptcy Abuse Prevention and Consumer Protection Act
For the most part the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 comes into full force on October 17, 2005. The Act contains a number of tax-related provisions, almost all of which are controversial. I will focus on a few of the tax-related provisions. The Bankruptcy Code & How It Works The Bankruptcy… Continue reading The Bankruptcy Abuse Prevention and Consumer Protection Act
Trust as the IRA Beneficiary
I continue to hear a number of financial planners, accountants and even attorneys say, “Don’t name a trust as the beneficiary of an IRA. ” The rationale is that naming individuals as the IRA beneficiary is preferable because the individual can take the IRA distributions over the course of the beneficiaries lifetime; whereas, a trust… Continue reading Trust as the IRA Beneficiary
Audit Reveals Deficiencies in IRS Procedures
In the Revenue Restructuring Act of 1998, Congress provided that taxpayers were to be provided a hearing before the IRS filed a lien or levy on taxpayer property. If filed timely, this involves a collection due process (CDP) hearing; if not filed timely, this involves an equivalency hearing. Typically both hearings are held before the… Continue reading Audit Reveals Deficiencies in IRS Procedures
Judicial Misstatement: Intentional, Error or Oversight?
Judicial opinions often include sentences that misstate the law. Often these sentences will be picked up by the IRS (and sometimes even taxpayers) years later to support arguments that courts should depart from the law. For example, this quote comes from the District Court for the Eastern District of New York in Johnson Home Care… Continue reading Judicial Misstatement: Intentional, Error or Oversight?
IRS Says Taxpayer’s Payments Were Too High
If the taxpayer submits an installment agreement request that full pays the liability, can the IRS reject the request as the payment amount is too high? The court addresses this in Lites v. Commissioner, T.C. Memo. 2005-206. Facts & Procedural History The taxpayers were a husband and wife. The taxpayer-husband was a financial products salesman… Continue reading IRS Says Taxpayer’s Payments Were Too High
IRS Disclosure of Confidential Information
The IRS is prohibited from disclosing taxpayer information to third parties. There are a number of exceptions. But when the laws are violated, the courts can and do award damages to taxpayers. The Ward v. United States, 973 F. Supp. 996 (Dist. Colo. 1997) court case provides a prime example. Facts & Procedural History The taxpayer owned… Continue reading IRS Disclosure of Confidential Information
The (D)Evolution of our Tax Law
Our tax laws seem to evolve (devolve?) over time. This evolution seems to follow a pretty predictable pattern. I will use Action on Decision 2005-001, which is an interesting decision in and of itself, to describe this process. In this AOD the IRS announces that it will not follow the Ninth Circuit Court of Appeal… Continue reading The (D)Evolution of our Tax Law