The U.S. Bankruptcy Court recently considered whether amounts withheld from wages in excess of the amount of the income tax liability owed is a refund of tax or a refund of wages. The case is In re Crutch, No. 15-44523-cec. (E.D.N.Y. 2017). The case is a reminder to those taxpayers who are considering bankruptcy that… Continue reading Does Withholding on Wages Convert the Wages to a Tax?
Tax Articles
Taxpayer May Deduct Taxes for Defunct S Corp Paid in Current Year
In Brown v. Commissioner, T.C. Memo. 2017-18, the court addresses whether taxpayers can claim a deduction for taxes paid by a defunct S corporation in the current year when the taxes are owed by the corporation for prior tax years. Many taxpayers do not realize they can claim a deduction for taxes in this situation. […]
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Deducting Back Taxes in Current Year for Defunct Business
Can an S corporation shareholder for a defunct business pay unpaid taxes in the current year, and have the defunct business deduct the payment in the current year? The court addresses this in Brown v. Commissioner, T.C. Memo. 2017-18. Most business owners may miss this deduction given that the business is no longer operating. Facts &… Continue reading Deducting Back Taxes in Current Year for Defunct Business
Court Agrees to Judgment Sample for R&D Credit Claim
In CRA Holdings U.S., Inc. v. United States, No. 15-CV-239W(F) (W.D.N.Y. 2017), the court considered whether sampling was appropriate for a research tax credit claim based on 6,100 projects. The taxpayer asked the court to consider a judgment sample of 10 to 15…
Eight Things You Need to Know About the IRS Offer in Compromise Program
An offer in compromise is a legal agreement between you and the IRS that settles your tax debt for less than the full amount you owe. It provides you with a path for paying off your tax debt and getting a “fresh start.”…
Court Says No Reasonable Cause Defense for Trust Fund Penalty
In United States v. Liddle, Case No. 14-cv-04761-BLF (N.D. Cali. 2017), the court considered a trust fund recovery penalty case. The penalty was imposed on a CEO who admitted that his company failed to pay its employment taxes. The only question was whether reasonable cause is a defense to trust fund recovery penalties. Businesses must […]
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Government Lawsuit to Recoup Research Tax Credits
The U.S. District Court for the Southern District of Ohio issued an opinion in U.S. v. Quebe. The case is an erroneous refund claim suit in which the government is seeking to recoup refunds paid based on R&D tax credits. The opinion does…
No Reasonable Cause Defense for Some Trust Fund Penalties
The IRS is serious about unpaid employment taxes. The trust fund recovery penalty can be used to collect these taxes. This penalty makes a business tax liability a personal liability. With most penalties, the penalty can be abated for reasonable cause. But what about the trust fund penalty? Can it be abated for reasonable cause?… Continue reading No Reasonable Cause Defense for Some Trust Fund Penalties
Post Office Tracking Data Can Result in Tax Disputes
There have been a number of tax cases involving disputes as to when tax documents are mailed to the government. In Tildon v. Commissioner, No. 15-3838 (7th Cir. 2017), the court considered a dispute that turned on whether U.S. Postal Service tracking data…
Post Office Tracking Data Can Result in Tax Disputes
There have been a number of tax cases involving disputes as to when tax documents are mailed to the government. In Tildon v. Commissioner, No. 15-3838 (7th Cir. 2017), the court considered a dispute that turned on whether U.S. Postal Service tracking data is a “postmark made by the U.S. Postal Service.” The Facts and… Continue reading Post Office Tracking Data Can Result in Tax Disputes