In Elsayed v. Commissioner, T.C. Summary Opinion 2009-81, the U.S. Tax Court reviewed meal and unreimbursed expenses incurred by a truck driver. This is a common tax problem for truck drivers. This case shows the difficulties truck drivers have in capturing and substantiating their expenses for tax purposes. Facts & Procedural History Elsayed was employed… Continue reading Truck Driver Not Entitled to Deduct Meal and Supply Expenses
Category: Tax Procedure
Offer in Compromise: Documenting the Value of Assets
The IRS carefully examines the value of the taxpayer’s assets when it considers whether to accept an offer in compromise based on doubt as to collectiblity. Even a few dollars can result in a rejected offer. Substantiation is key. The Wright v. Commissioner, T.C. Memo. 2008-259, case is an example. It involves a $2,000 offer… Continue reading Offer in Compromise: Documenting the Value of Assets
Abate Tax Penalties for Anxiety & Depression for 911 Attacks
Can tax penalties be abated for anxiety and depression due to the death of a spouse to cancer and the September 11, 2001 terrorist attacks on the World Trade Center? The court addressed this in Kwosh v. Commissioner, T.C. Memo. 2008-204, in light of the 10 percent addition to tax on early retirement distributions and… Continue reading Abate Tax Penalties for Anxiety & Depression for 911 Attacks
IRS Guidance on Whistleblower Informant Program
The IRS whistleblower program allows taxpayers to obtain payment from the IRS for providing information about alleged tax wrongdoing by other taxpayers. How the IRS has administered the program has drawn criticism from politicians, taxpayers, and others. The IRS’s recent guidance aims to address these criticisms. It provides a three-step process for handling whistleblower claims: 1.… Continue reading IRS Guidance on Whistleblower Informant Program
Taxpayer Cannot Rely on Incompetent Tax Attorney
The IRS can impose a number of different types of penalties. It often does so when it should not. The recent Wilson v. Commissioner, T.C. Summary Opinion 2008-91, case considers a situation where the court concludes that the tax attorney was incompetent and could not be relied on to avoid the imposition of penalties. Facts &… Continue reading Taxpayer Cannot Rely on Incompetent Tax Attorney
Refunds After Innocent Spouse Relief Granted
If a taxpayer pays the couple’s income taxes and is then granted innocent spouse relief for the liability, is the innocent spouse entitled to a refund of the amount paid? The 9th Circuit Court of Appeals addressed this in Orlock v. Commissioner. Facts & Procedural History The IRS granted the wife innocent spouse relief. Prior to… Continue reading Refunds After Innocent Spouse Relief Granted
Reporting Requirements for ISOs and ESPPs
The IRS has released proposed Regulations to implement the recent changes in Code Sec. 6039. These Regulations require corporations to report the transfer of stock upon the exercise of incentive stock options (ISOs) and by employee stock purchase plans (ESPPs). Pursuant to the changes in Code Sec. 6039, corporations must provide this information to the… Continue reading Reporting Requirements for ISOs and ESPPs
Discharging Tax Debts in Bankruptcy: The Three Year Look-Back Period
Bankruptcy is often the best method of resolving unpaid tax debts. The U.S. Tax Court recently addressed one of the rules for discharging unpaid tax debts in bankruptcy in Lehman v. Commissioner, T.C. Summary Opinion 2008-83. Facts & Procedural History On Lehman’s Case In Lehman, the taxpayers initially sought Chapter 13 bankruptcy relief. The taxpayers filed… Continue reading Discharging Tax Debts in Bankruptcy: The Three Year Look-Back Period
Tax Disputes Involving Alimony Payments
If payments qualify as alimony pursuant to federal tax law, the payments may be tax deductible by the payor spouse and included in gross income to the payee spouse. The opposite is true if the amounts are not alimony for federal tax law. Whether an expense counts as alimony is frequently the subject of disputes… Continue reading Tax Disputes Involving Alimony Payments
The Disqualified Employment Tax Levy
The IRS is generally required to give taxpayers notice of its intent to levy (or take) their property prior to it actually levying on the property. Congress recently amended the Code to provide the IRS with a new type of tax levy. This new levy is referred to as a “disqualified employment tax levy” and… Continue reading The Disqualified Employment Tax Levy