Federal
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March 28, 2024
Abuse Of Discretion Claims Fall Flat In $13M Tax Court Case
The federal government may proceed with collecting on a $13 million tax liability after a Colorado woman failed to prove that there was an abuse of discretion when the IRS sustained a levy against her, the U.S. Tax Court ruled Thursday.
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March 28, 2024
Musician's Trips To Japan Not Business, Tax Court Rules
A musician who said he traveled to Japan to conduct market research and learn about the country's music culture cannot claim a deduction of nearly $20,000 in travel expenses, the U.S. Tax Court ruled Thursday.
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March 28, 2024
Canadian In Wash. Owes Over $1M FBAR Penalty, US Says
A Canadian man living in Washington state owes more than $1 million in penalties for failing to report bank accounts he held in Montreal, the U.S. Department of Justice said in a complaint filed in an attempt to collect the money.
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March 28, 2024
Doctor Allowed To Withdraw NBA Fraud Plea, Gets June Trial
A Manhattan federal judge will allow a Seattle-area doctor to pull back his guilty plea and go to trial in June, against prosecutors' objections, in a case alleging he assisted a cohort of retired NBA players to create fake invoices to submit to the league's healthcare plan.
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March 28, 2024
2nd Circ. Urged To Uphold Dual Citizen's FBAR Penalties
A New York federal court correctly upheld tax penalties against a dual French citizen for hiding millions of dollars in six foreign accounts, the U.S. government told the Second Circuit, urging it to reject the woman's claims that American authorities violated the Hague Convention in pursuing her.
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March 28, 2024
IRS Floats Expanding Tax Info Disclosures To Census Bureau
The Internal Revenue Service proposed rules Thursday that would expand what tax return information can be disclosed to the U.S. Census Bureau.
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March 28, 2024
IRS Investigated $9B In Potential COVID Aid Fraud
The criminal investigation arm of the Internal Revenue Service investigated nearly $9 billion in potential fraud cases related to coronavirus relief funds, the agency said Thursday.
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March 28, 2024
Nev. Estate Owes Over $3.8M In FBAR Penalties, Court Rules
The estate of a Nevada entrepreneur must pay over $3.8 million in penalties and interest for willfully failing to report his foreign bank accounts in Belize, the Bahamas and Panama, a federal district court ruled.
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March 27, 2024
Hunter Biden Judge Doubts Tax Charges Politically Motivated
A California federal judge Wednesday appeared unpersuaded by Hunter Biden's claim that the special counsel's decision to file criminal tax charges after a plea deal collapsed was motivated by pressure from Republican lawmakers, remarking that "there really is no evidence to support that contention."
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March 27, 2024
Zaxby's Co-Founder's $43M Easement Fight Headed For Trial
A trial will be needed to determine whether a co-founder of the Zaxby's restaurant chain and his wife are entitled to a $43.3 million tax refund for donations of conservation easements, a Georgia federal judge ruled Wednesday, saying the value of the easements remains in dispute.
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March 27, 2024
NY Couple Hid $1.4M In Dividends, Tax Court Says
A New York man who pled guilty to healthcare fraud and his wife are liable for tax deficiencies after failing to report more than $1.4 million in constructive dividends, the U.S. Tax Court said Wednesday.
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March 27, 2024
Treasury Urged To Adjust Shift To Foreign Currency Rules
The U.S. Treasury Department should let corporations take an aggregate approach regarding certain affiliates that conduct business in foreign currencies when transitioning to new rules for determining taxable income or loss, the American Bar Association's Tax Section recommended.
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March 27, 2024
IRS Delays Some Hawaii Deadlines Until August After Fires
The Internal Revenue Service granted an additional extension of filing and payment deadlines for some Hawaii taxpayers affected by wildfires, the agency said Wednesday.
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March 27, 2024
Justices Grapple With Complex $3M Estate Tax Dispute
The U.S. Supreme Court confronted a complicated dispute Wednesday over whether the estate of a deceased building supply company owner should be taxed on $3 million in life insurance proceeds the company used to buy his shares after his death, with two justices seeming to take opposing sides.
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March 27, 2024
Groups Urge IRS To Keep Strict Hydrogen Tax Credit Rules
Some supporters of the Internal Revenue Service's proposed rules for the clean hydrogen production tax credit encouraged the agency Wednesday to maintain strict qualification criteria for the incentive to further discourage the use of fossil fuels in the manufacturing process and to reduce pollution.
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March 27, 2024
NY County Seeks To Bar NYC Congestion Prices As Illegal Tax
A New York county with limited access to the Metropolitan Transportation Authority's service system jumped into the litigation fray against New York City's congestion pricing plan, arguing that the proposed charges for driving into portions of Manhattan are illegal taxes.
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March 27, 2024
Worker Credit Cutoff Seen As Harsh But Fair Potential Fix
Tax legislation pending in the Senate would retroactively end the employee retention tax credit program and leave businesses with a legitimate need for the credit out in the cold, but lawmakers say the move is necessary given the magnitude of fraud in the program.
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March 27, 2024
Advice-Of-Counsel Defense Curbed From NC Tax Fraud Trial
Two St. Louis attorneys and a North Carolina insurance agent can't fall back on advice-of-counsel defenses during their upcoming tax fraud trial after a federal judge found that they had failed to follow court orders requiring them to hand over information about the advice they sought.
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March 26, 2024
Meta Can't Escape Suit Over Collection Of Taxpayers' Data
A California federal judge refused to release Meta from a consolidated class action accusing it of unlawfully collecting sensitive information from tax filing websites H&R Block, TaxAct and Tax Slayer, allowing state and federal wiretapping claims to move forward and permitting the plaintiffs to amend several deficient privacy allegations.
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March 26, 2024
Adjusting To Amount B's Rules May Bring Growing Pains
Countries designed a new tax framework known as Amount B to streamline the pricing of certain cross-border operations, but the criteria for determining whether transactions qualify for the regime, which negotiators recently made optional, may complicate the goal of simplicity.
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March 26, 2024
$4.5M Microcaptive Insurance Deduction Nixed By Tax Court
An eye doctor can't deduct more than $4.5 million in insurance premiums that he paid to two microcaptive companies because the payments don't qualify as valid insurance purchases for federal income tax purposes, the U.S. Tax Court ruled Tuesday.
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March 26, 2024
$23M Easement Deduction Worth Only $480K, Tax Court Says
The U.S. Tax Court significantly reduced the value of a $23 million deduction taken by the members of a Delaware partnership Tuesday, instead allowing them $480,000 for the charitable donation of an easement.
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March 26, 2024
NC Software Execs Ask To Raze Payroll Tax Fraud Conviction
Two former software executives found guilty of failing to pay hundreds of thousands of dollars in employment taxes have sought to wipe out their conviction based on what they allege was insufficient evidence presented by the government at trial.
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March 26, 2024
Producers Push IRS For Flexible Clean Hydrogen Credit Regs
The IRS should adopt flexible metrics to measure greenhouse gas emissions in proposed rules for the clean hydrogen production tax credit to accommodate energy companies' transition toward cleaner production methods, stakeholders said during a hearing on the regulations Tuesday.
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March 26, 2024
9th Circ. Judges Skeptical Senior Care Facility Owes IRS $20M
Ninth Circuit judges seemed skeptical of the Internal Revenue Service's efforts to force a California-based senior care facility to pay a $20 million tax bill, saying the facility's deferral of unamortized portions of resident fees didn't run afoul of generally accepted accounting methods.
Expert Analysis
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Using Agreements To Cover Gaps In Hydrogen Storage Regs
The Inflation Reduction Act's incentives for energy storage have spurred investment in hydrogen storage and production, but given the lack of comprehensive regulations surrounding the sector, developers should carefully craft project and financing agreements to mitigate uncertainties, say Omar Samji and Sarah George at Weil, and attorney Manushi Desai.
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Secure 2.0 Takeaways From DOL's 2024 Budget Proposal
The U.S. Department of Labor’s fiscal year 2024 budget proposal provides insight into the most pressing Secure 2.0 implementation issues, including establishment of a search database for finding lost retirement savings and developing guidance on the execution of newly authorized emergency savings accounts, say attorneys at Maynard Nexsen.
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Avoiding Negative Tax Consequences In Loan Modifications
Borrowers who may be caught in the dramatic uptick in nonperforming commercial real estate loans should consider strategies to avoid income and capital gains tax that may be triggered by loan modifications, says Aman Badyal at Glaser Weil.
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Benefits And Beyond: Fixing Employee Contribution Failures
Employers must address employee contribution failures promptly in order to avoid losing significant tax benefits of 401(k) or 403(b) plans, but the exact correction procedures vary depending on whether contributions were less than or greater than intended, say attorneys at Seyfarth Shaw.
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Now Is The Time For State And Local Sales Tax Simplification
In the five years since the U.S. Supreme Court’s landmark decision in South Dakota v. Wayfair, state and local governments increasingly rely on sales tax, but simple changes are needed to make compliance more manageable for taxpayers, wherever located, without unduly burdening interstate commerce, says Charles Maniace at Sovos.
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Recent Bills Show Congress' Growing Maturity On Cannabis
Though two recently introduced cannabis reform bills, the Prepare Act and the Small Business Tax Equity Act, are unlikely to pass in this Congress, they demonstrate a new level of focus and sophistication on the part of lawmakers as it relates to cannabis at the federal level, says Irina Dashevsky at Greenspoon Marder.
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What To Make Of IRS' New Advance Pricing Guidance
Recent guidance on the IRS' goals for its advance pricing agreement system provides helpful insight into review and decision-making procedures for advance pricing agreement requests, but it also raises questions about the IRS' objectives, say Richard Slowinski and Stefanie Kavanagh at Alston & Bird.
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Compliance Obligations Still Murky For Superfund Excise Tax
Comments on the IRS' reinstatement of the Superfund chemicals excise tax show that, given taxpayers' lack of institutional knowledge and the government's previous failure to finalize clarifying guidance, further regulatory action is needed to help taxpayers understand their obligations, say Nicole Elliott and Mary Kate Nicholson at Holland & Knight.
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The Reciprocal Tax Bill Is A Warning Shot At Pillar 2
A bill recently introduced in the House of Representatives to reciprocally tax countries deemed to have imposed discriminatory taxes on U.S. citizens and businesses takes aim at countries implementing the global minimum tax treaty known as Pillar Two, with which the U.S. has not complied, says Alan Cole at the Tax Foundation.
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3 Developments That May Usher In A Nuclear Energy Revival
A recent advancement in nuclear energy technology, targeted provisions in the Inflation Reduction Act and a new G7 agreement on nuclear fuel supply chains may give nuclear power a seat at the table as a viable, zero-carbon energy source, say attorneys at Vinson & Elkins.
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What Tax-Exempt Orgs. Need From Energy Credit Guidance
Guidance clarifying the Inflation Reduction Act’s credit regime, expected from the U.S. Department of the Treasury this summer, should help tax-exempt organizations determine the benefits of clean energy projects and integrate alternative energy investments into their activities, say attorneys at Morgan Lewis.
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Unconventional Profits Interest Structures Find New Support
A recent U.S. Tax Court ruling should provide comfort that less-than-plain-vanilla profits interest structures, created to achieve complicated economic arrangements, can succeed in generating more optimal tax outcomes, provided the terms are properly drafted, says Daren Shaver at Hanson Bridgett.
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Roadblocks For Cannabis Employers Setting Up 401(k) Plans
Though the Internal Revenue Code and the Employee Retirement Income Security Act generally allow cannabis businesses to establish 401(k) plans for their employees, companies must still pick their way through uncertainties around tax deductions and recruiting reliable vendors, say attorneys at Shipman & Goodwin.