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).
End-of-Year Change to the Employee Retention Credit Waiting to Snag Some Employers with Penalties... [ read ]
The IRS recently issued Notice 2021-65, offering guidance to employer-taxpayers after the Infrastructure Investment and Jobs Act ("Infrastructure Act") ended the employee retention credit for wages paid by most employers during the fourth quarter of 2021. The Notice also describes circumstances where certain employers may have to repay advance payments of the employee retention credit or be subject to penalties.
October Tax Decisions... [ read ]
This blog post summarizes a few noteworthy court decisions released last month that pertain to federal tax matters.
Finally, IRS Ends Unhelpful Ten Transcripts Per Call Limit... [ read ]
Perhaps you have noticed that it is often impossible to get through to the IRS on its Practitioner Priority Line.
Ghost Employers, Beware!... [ read ]
While famed ghostbusters Venkman, Stantz, and Spengler may not be a threat to what the IRS is calling "ghost employers," the IRS Office of Fraud Enforcement just might be. According to the IRS, "ghost employers" are people who give their employees a W-2 but don't file employment tax returns or provide payroll information to the Social Security Administration.
Gift Tax Annual Exclusion Amount Increases for the First Time Since 2018... [ read ]
As inflation recently hit a three-decade high, the IRS announced adjustments to various tax deductions, credits, and exemptions.
Defined Valued Transfer - How the Taxpayers Got it Wrong... [ read ]
On November 3, 2021, the Fifth Circuit issued its opinion in Nelson v. Commissioner and unanimously affirmed the opinion of the Tax Court in favor of the IRS.
Employers Beware: Federal Government Continues its Laser Focus on Employment Tax Fraud... [ read ]
According to the IRS Criminal Investigation annual report, there were 2,596 criminal investigations initiated in 2020, of which 298 were employment tax cases. In January 2021, the Department of Justice Tax Division noted "employment tax enforcement is among the Tax Division's highest priorities." A recent example of the government's focus on employment tax fraud can be found in U.S. v. Christina Anglin (W.D. Okla. 2021). Ms. Anglin was the controller and CFO of a technology company in Oklahoma. As the controller, one of her responsibilities was withholding payroll taxes (Social Security and Medicare taxes and federal income taxes) and paying them to the IRS.
The Impact of Delinquent International Informational Returns on the IRS Statute of Limitations... [ read ]
Early this year the U.S. Tax Court released a decision in Kelly v. Commissioner, which, among other things, discusses how a delinquent international return impacts the IRS statute of limitations for assessment. It is a welcomed partial win for a taxpayer and contains a good discussion of reliance on a tax professional as the basis for reasonable cause.
