There are a number of cases where taxpayers have had to pay more tax than they should due to technical foot faults. These cases often come up when the IRS auditors believe that their job is to look for strict compliance (100%) rather than substantial compliance (something more akin to 80%). This brings us to… Continue reading Charitable Deduction With a Defective Valuation
Tax Articles
Payments to Ex-Spouse Were Alimony Despite Missing Language in Agreement
Tax issues are often the last thing that spouses consider when going through a divorce. In other cases, one spouse plans for the tax issues and the other does not. This appears to have been the situation in Leslie v. Commissioner, T.C. Memo. 2016-171. Facts and Procedural History The taxpayer’s husband was an attorney. He […]
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Payments Were Alimony Despite Missing Language Agreement
Payments Made to Ex-Spouse Were Alimony Despite Missing Language in Divorce Agreement Tax issues are often the last thing that spouses consider when going through a divorce. In other cases, one spouse plans for the tax issues and the other does not. This appears to have been the situation in Leslie v. Commissioner, T.C. Memo.… Continue reading Payments Were Alimony Despite Missing Language Agreement
Taxes Remitted to the U.S. Virgin Islands in Error Were Not Compulsory Payments
One of the common issues that comes up on audit is whether payments to foreign governments are creditable for purposes of the U.S. foreign tax credit (“FTC”). This often hinges on whether the payments were “compulsory.” There is little guidance as to what payments are compulsory. The court recently addressed this issue in Vento v. […]
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Taxes from IRS Audit Remitted to U.S. Virgin Islands
Taxes Remitted to the U.S. Virgin Islands in Error were Not Compulsory Payments in an Audit One of the common issues that comes up on audit is whether payments to foreign governments are creditable for purposes of the U.S. foreign tax credit (“FTC”). This often hinges on whether the payments were “compulsory.” There is little… Continue reading Taxes from IRS Audit Remitted to U.S. Virgin Islands
Termination Payment for Failed Real Estate Deal Was Ordinary Gain
In CRI-Leslie, LLC v. Commissioner, 147 T.C. 8, the court addressed the tax treatment of a termination payment received from a real estate deal that fell through. The court concluded that the termination payment was ordinary gain, not capital gain, for the taxpayer. This is an important topic and an important case, as this is […]
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Payment for Failed Real Estate Deal, Capital or Ordinary Gain?
How is a termination payment for a failed real estate deal taxed? Does it trigger capital or ordinary gain? The court recently addressed this in CRI-Leslie, LLC v. Commissioner, 147 T.C. 8. Facts & Procedural History The taxpayer owned a Radison-branded hotel in Florida. It entered into a contract to sell the hotel to a third… Continue reading Payment for Failed Real Estate Deal, Capital or Ordinary Gain?
Finding Opportunities to Contest Tax Liabilities
The IRS puts taxpayers on notice by mailing letters and notices. It is common for these letters and notices to not be delivered or to be delivered late. This can present a serious problem for taxpayers, particularly when the letter or notice is one tha…
Options to Contest Taxes
The IRS puts taxpayers on notice by mailing letters and notices. It is common for these letters and notices to not be delivered or to be delivered late. This can present a serious problem for taxpayers, particularly when the letter or notice is one that proposes to increase the about of tax that is due.… Continue reading Options to Contest Taxes
Agreeing to Extend the Time for an IRS Audit–or Not
Congress provided a limited time for the IRS to audit tax returns. This time can be extended if the taxpayer agrees. While some taxpayers require the IRS to stick to the time provided by Congress, other taxpayers choose to extend the time period. This is a difficult issue that taxpayers face on audit. The Assessment[…]
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