Crypto Clarity on the Horizon? Taxpayer Rejects Complete Government Concession for Issue Clarity... [ read ]
It is not every day that the IRS agrees to pay a refund and the taxpayer declines. In Jarrett v. United States, No. 3:21-cv-00419 (M.D. Tenn.), one taxpayer did just that.
Taxpayer Loses Round One on Substantial Compliance But Still Has a "Reasonable" Chance to Save Its Easement Charitable Deduction... [ read ]
In a February 8th order in Hickory Equestrian LLC v. Commissioner, USTC No. 347-21, the U.S. Tax Court partially granted the IRS motion for summary judgment regarding the taxpayer's $6.4 million easement deduction. The court agreed with the IRS that the partnership's omission of cost basis on Form 8283, "Noncash Charitable Contributions", constituted a failure to satisfy the substantiation requirements of Reg. Section 1.170A-13(c). However, the court left open the possibility that the taxpayer could still save its charitable contribution deduction based on reasonable cause.
Taxpayer Does Some Creative Do-It-Yourself Estate and Gift Tax Planning and Then Tells the World About It... [ read ]
On January 20th, a U.S. Magistrate Judge in Illinois issued a memorandum opinion and order in R. David Yost v. Morgan Carroll, No. 20-C-5393 (N.D. Illinois), which involved a promissory note enforcement dispute between a soon-to-be former father-in-law (Yost) and his soon-to-be former son-in-law (Carroll). The lawsuit was filed after Carroll and Yost's daughter, Annie, started divorce proceedings. The promissory note case does not involve the IRS or any tax issues, but based on the court's order, the IRS, and possibly the Department of Justice, could be making inquiries of the parties soon.
Taxpayer Advocate Report to Congress-Parts 2 & 3 (Sort of)... [ read ]
Have you ever committed to do something only to later discover that someone has already done it and done it very well? Well, I had one of those moments this week. Last week I wrote a blog post regarding the Taxpayer Advocate's 2021 report entitled The National Taxpayer Advocate's 2021 Report to Congress (Part 1). Because there is a tremendous amount of interesting material in the report (interesting to tax nerds like me), my intent was to write at least one or two other blog posts regarding the Advocate's report to Congress.
IRS Slow Down in Micro Captive Enforcement? Not so Fast…... [ read ]
Late last year, the IRS made a big splash in tax news when it conceded the deductions of micro captive planning in a filed Tax Court case (Puglisi v. Commissioner, available here). Since that time there has been much commentary on whether the IRS' concession marked a shift in its heavy-handed enforcement style against micro captive insurance. Well, the jury remains out, as just last week, IRS Chief Counsel announced plans to hire up to 200 additional attorneys to help combat allegedly abusive transactions. And what does the IRS include in that category? You guessed it: micro captive insurance arrangements.
The National Taxpayer Advocate's 2021 Report to Congress (Part 1)... [ read ]
On January 12th, the IRS National Taxpayer Advocate delivered her annual report regarding the IRS to Congress. The report contains statistical information and recommendations for how the IRS could improve its service and how Congress could assist the IRS in making the suggested improvements. For those of us who assist clients with IRS matters, we were not surprised that the Advocate's report stated that 2021 was the most challenging year ever for taxpayers and the IRS. "
IRS Introduces New Pilot Program to Allow Some Taxpayers to Skip the Line for Letter Rulings... [ read ]
In an early 2019 blog post, we discussed the what and how of requesting an IRS Letter Ruling. The process for obtaining a Letter Ruling can be slow and time consuming and that has been further slowed by the pandemic. In response to "numerous informal comments from taxpayers and practitioners regarding the time required to process letter ruling requests" on January 14th, the IRS issued Revenue Procedure 2022-10 , which immediately implements an 18-month pilot program that allows taxpayers to request fast-track processing (12 weeks) for letter ruling requests.
November Tax Decisions... [ read ]
This blog post summarizes a few noteworthy court decisions released in November2021 that pertain to federal tax matters.
The Tacit Consent Rule and An Unsigned Tax Return... [ read ]
In a recent memorandum opinion, Om P. Soni v. Commissioner, T.C. Memo 2021-137, the U.S. Tax Court discussed a rule rarely seen in tax cases, the "tacit consent rule". The court held that although the taxpayer's wife had not signed the tax return at issue and other related documents, her actions invoked the tacit consent rule and she was liable for the tax deficiency.
Two Recent Tax Court Decisions Regarding Breeding Animals and Hobby Losses: The Miniature Donkey Breeder Had a "Little" Better Facts... [ read ]
The U.S. Tax Court recently issued two memorandum opinions regarding animal breeding activities and whether the taxpayers at issue could deduct expenses in excess of income from the activity. In Skolnick v. Commissioner, the Tax Court found that a pair of horse breeders were not engaged in the activity for profit, and thus the deductions were limited by IRC Section 183(b). In Huff v. Commissioner, the Tax Court found that a miniature-donkey-breeder venture was engaged in for profit, and therefore expenses in excess of income were allowable deductions under Section 162(a).
