Tax Residency: Key Differences Between the U.S. Income and Transfer Tax Rules... [ read ]
The application of U.S. tax laws often turns on the meaning of "residency." Although U.S. citizens and residents are subject to federal income taxes on their worldwide income, non-residents who are not U.S. citizens ("Foreign Persons") are generally not unless the income has a nexus to the U.S. Under the U.S. income tax regime, individuals may establish residency through their physical presence in the U.S.
A Sample of Tax Cases in Federal District Court: Criminal vs. Civil... [ read ]
Most federal tax disputes are resolved administratively or in the United States Tax Court, where taxpayers might challenge IRS determinations in a specialized forum that requires no prepayment of the disputed tax. But not all tax cases follow that path.
Late-Filing Penalties, Reasonable Cause, & Boyle... [ read ]
There are more than 100 penalties in the Internal Revenue Code. Each penalty varies in scope, but a common defense for almost all of them is "reasonable cause." Where this defense applies, the IRS can't impose penalties.
Taxpayer Advocate Publishes Update on ERC... [ read ]
The IRS continues to struggle with processing and adjudicating ERC claims. Earlier today, Taxpayer Advocate published a Blog post with an update on the IRS' progress (or lack thereof) and a call to the IRS to bring much needed closure.
Refund Litigation Continued: District Court vs. Court of Federal Claims... [ read ]
Once administrative prerequisites are satisfied—namely payment of the liability, the filing of a valid refund claim, and the passage of requisite time—a taxpayer may initiate a refund lawsuit. But where and how that lawsuit is filed involves careful consideration about the benefits and drawbacks of each forum.
Hidden Risks of Not Filing IRS Foreign Information Returns: What You Need to Know... [ read ]
Generally, the IRS has three years to select an income tax return for audit. But if the taxpayer never files an income tax return, the three-year statute of limitations period never starts, providing the agency with unlimited time to make additional tax adjustments. Although many taxpayers are familiar with this rule, few taxpayers recognize that a similar rule applies to unfiled foreign information tax returns.
Pleading the Fifth in the Grand Jury Room... [ read ]
The Fifth Amendment to the United States Constitution provides that no person "shall be compelled in any criminal case to be a witness against himself." Popularized in courtroom dramas—"I plead the Fifth!"—this protection is widely understood at a surface level: it prohibits compelled self-incrimination. But depending on the case, its application may be increasingly nuanced and far from ubiquitous.
The Grand Jury Wants to Hear From You—Here's What That Means... [ read ]
For many professionals, the receipt of a federal grand jury subpoena may be the person's first encounter with the federal government. If you've received a federal grand jury subpoena, take a breath—but don't dismiss it. These subpoenas are not ordinary. Indeed, the service of a federal grand jury subpoena typically means the federal government—in many instances, the United States Department of Justice—is investigating a potential crime for which the recipient of the subpoena may have relevant information. Whether the federal government sees the recipient as a witness or a potential subject or target of that investigation, the recipient's response—or lack thereof—can significantly influence the government's next move.
Administrative Prerequisites to Suit in Federal Tax Refund Litigation... [ read ]
This is the second in a series of refund litigation blog posts. In this post, I focus on requirements that must be satisfied before a taxpayer can file a refund lawsuit.
A Texas Contractor's Key Issue: Is it an Improvement to Real Property or Not?... [ read ]
One of the most important questions a taxpayer must necessarily ask itself when performing work on real property is whether the work is an improvement to real property. The rules that apply to real property improvements for Texas tax purposes can differ significantly from those that apply to other transactions. As in many areas, getting this wrong can create significant exposure to liability.
