The IRS has the authority to abate or remove interest on tax liabilities; however, the process for getting the IRS to exercise this discretion can be challenging. The U.S. Tax Court describes this process in Select Steel, Inc. v. Commissioner, T.C. Summary Opinion 2008-79. Facts & procedural History In Select Steel, the taxpayer was required… Continue reading Getting Interest Abated Can be Challenging
Category: Tax Procedure
Unpaid Taxes & Assets Held by Third Parties
The IRS has broad powers to collect unpaid tax debts. This power is not unlimited. In Dalton v. Commissioner, T.C. Memo. 2008-165, the U.S. Tax Court looks at one limitation on the IRS’s collection powers, namely, the IRS’s ability to take property that is held by a third party to satisfy the taxpayer’s tax debt.… Continue reading Unpaid Taxes & Assets Held by Third Parties
U.S. International Tax Withholding and Reporting Requirements
Payments made by U.S. citizens and resident aliens (“U.S. persons”) to non-U.S. persons are typically subject to U.S. tax withholding and result in U.S. tax reporting requirements. These requirements can be difficult to understand and a misstep can prove to be very costly. U.S. Tax Withholding Whether a U.S. person is required to withhold tax… Continue reading U.S. International Tax Withholding and Reporting Requirements
The New Tax Return Preparer Penalty
The IRS has the ability to impose penalties on income tax return preparers for certain conduct. These rules changed last year, which makes it due time to provide an overview of the new rules. A Little Background As mentioned above, Congress amended the Code just over a year ago to beef up the tax return… Continue reading The New Tax Return Preparer Penalty
Sluggish Economy May Help Taxpayers With Unpaid Tax Debts
The sluggish economy is impacting all of us in one way or another. This is a scary time. Taxpayers who owe unpaid tax debts may feel even more helpless. This is especially true given the IRS’s focus on tax assessment and collection efforts. Coincidentally, taxpayers who find themselves subject to IRS collection action may also… Continue reading Sluggish Economy May Help Taxpayers With Unpaid Tax Debts
Innocent Spouse Relief for Ex-Spouse’s Income
Innocent spouse relief can provide a much-needed remedy for divorced or separated taxpayers who filed a joint income tax return. This relief is commonly granted where the income that gave rise to the tax liability was earned by one spouse. The recent Mapp v. Commissioner, T.C. Summary Opinion 2008-76, case provides an opportunity to consider these… Continue reading Innocent Spouse Relief for Ex-Spouse’s Income
Truck Driver Not Entitled to Deductions When Records Destroyed
In Clark v. Commissioner, T.C. Memo. 2007-172, the U.S. Tax Court held that a truck driver who did not file tax returns was not entitled to deduct expenses where his records were destroyed in a fire. Facts & Procedural History Mr. Clark was a truck driver. He was employed by Jimmy Harris Trucking, Inc., Vandy… Continue reading Truck Driver Not Entitled to Deductions When Records Destroyed
Tax Refund Fraud Committed by Prisoners
The government has limited resources available to detect and prosecute tax fraud. Fraudulent tax refund schemes by prisoners continue to present a compliance burden for the IRS. The United States v. Turturro, 06-12033 (11th Cir. 2007) case provides a good example of this type of fraudulent scheme. Facts & Procedural History Turturro was in prison… Continue reading Tax Refund Fraud Committed by Prisoners
Courts Says No Criminal Fraud, IRS Imposes Civil Fraud Penalty
Say you are convicted of a tax crime and the criminal judge finds that your conduct has not risen to the level of tax fraud. Should a civil court later say that this same conduct does in fact rise to the level of tax fraud? In Maciel v. Commissioner, the Ninth Circuit Court of Appeals… Continue reading Courts Says No Criminal Fraud, IRS Imposes Civil Fraud Penalty
Tax Evasion Twist
One way to avoid a tax evasion conviction is to show that the underlying tax is not owed. The recent United States v. Kayser case provides a slightly different twist on this defense. The Court Sets Out The Following Facts From November 1998 to May 2000, A2Z USA, Inc. employed Kayser first as a salesperson… Continue reading Tax Evasion Twist