Federal
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August 14, 2023
Tax Court Tosses Debt Case That Triggered Passport Denial
The U.S. Tax Court on Monday granted a woman's request to dismiss a lawsuit she brought against the Internal Revenue Service challenging the agency's reporting of her tax delinquency to the U.S. Department of State, which then blocked her passport renewal in response.
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August 14, 2023
House Tax Panel Reviewing Foreign Donations To Nonprofits
Two House Ways and Means Committee Republicans said Monday that the panel is reviewing political activities of tax-exempt groups and the influence of foreign donors following reports raising questions about whether nonprofits are following the law and foreign money is flowing through nonprofits to affect U.S. elections.
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August 14, 2023
Software Co. Owed $3M Production Tax Break, 7th Circ. Told
A Wisconsin-based health care software company asked the Seventh Circuit to reverse a decision that denied it nearly $3 million in tax deductions for developing software in the U.S., saying the lower court had mischaracterized its product as an e-commerce service for nursing homes.
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August 14, 2023
Judge Won't Nix Plumbing Biz Owner's $2.4M FBAR Case
A Georgia federal judge refused to dismiss a government lawsuit seeking $2.4 million in penalties against a retired plumbing-business owner accused of willfully failing to report his foreign bank accounts, saying the government sufficiently alleged the man intentionally and recklessly broke the law.
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August 14, 2023
Judge Approves $80K Settlement In $330K FBAR Dispute
A New York federal judge approved an $80,000 settlement Monday in a $330,000 dispute between a woman and the federal government over improperly reported overseas accounts.
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August 14, 2023
IRS Lacks Workers To Fix Security Weaknesses, TIGTA Says
The Internal Revenue Service doesn't have enough workers to resolve information security deficiencies in a timely fashion, the Treasury Inspector General for Tax Administration said in a report released Monday.
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August 14, 2023
IRS Taking Digital Requests For Some Late-Filed Int'l Docs
Some taxpayers are now able to electronically request relief for certain late-filed international documents, the Internal Revenue Service announced.
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August 11, 2023
Biden Student Loan Plan May Ease Forgiven Debt 'Tax Bomb'
The Biden administration's finalized plan to waive interest remaining after income-driven payments on student loans could soften the blow of potential tax bills that borrowers will face if lawmakers don't extend the current income exclusion for student debt forgiveness, but it would not eliminate them entirely.
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August 11, 2023
Tax Treaty Doesn't Shield Man From FBAR Penalties, US Says
A U.S.-Mexico tax treaty does not relieve a Mexican national in the U.S. on a green card of foreign bank account reporting requirements, the government told a California federal court Friday in asking for a $22,000 judgment for outstanding penalties.
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August 11, 2023
11th Circ. OKs IRS Access To Peruvians' Bank Records
The Eleventh Circuit let stand Friday a Florida federal court's decision allowing the Internal Revenue Service to access the financial records of three Peruvian siblings under investigation by Peru's tax authority while they appeal the case.
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August 11, 2023
The IRA Turns 1, And Clean Energy Work Is Transformed
The Inflation Reduction Act turns 1 year old on Aug. 16, and attorneys on the front lines of clean energy development say the law has tangibly improved how clean energy projects are being developed and financed in the U.S. Here's how the energy development landscape has shifted as the IRA approaches its first birthday.
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August 11, 2023
Pension Plan Segment Rates Increase In August
Segment rates for calculating pension plan funding rose in August, the Internal Revenue Service said Friday.
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August 11, 2023
Parts Of Global Co.'s Reorganization Are Tax-Free, IRS Says
A publicly traded corporation that owns entities in the U.S. and abroad and is planning to separate two of its entities will not be taxed on some of the proposed transactions related to the deal, according to a private letter ruling released Friday by the Internal Revenue Service.
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August 11, 2023
IRA Distributions To Trust For Charity Are Income, IRS Says
Annual distributions from a retirement account to a trust for purposes of making charitable donations, as set up by a decedent's estate, should be considered gross income to the trust but can be deducted, the IRS said in a private letter ruling released Friday.
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August 11, 2023
David Weiss Named Special Counsel In Hunter Biden Probe
U.S. Attorney General Merrick B. Garland on Friday said Delaware U.S. Attorney David Weiss would be appointed special counsel in the ongoing federal investigation into Hunter Biden, the son of President Joe Biden, as the prosecutor signaled an intent to move toward trial.
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August 11, 2023
IRS Releases Guidance On Electronic Filing Exemptions
The Internal Revenue Service released a notice Friday informing tax filers about exemptions from electronically filing certain documents.
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August 11, 2023
Taxation With Representation: Cravath, Shearman
In this week's Taxation With Representation, DISH Network Corp. merges with EchoStar Corp., KKR & Co. acquires Simon & Schuster, Clayton Dubilier & Rice LLC buys Veritiv Corp., and Campbell Soup Co. purchases Sovos Brands.
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August 11, 2023
Weekly Internal Revenue Bulletin
The Internal Revenue Service released its weekly bulletin, which included details of a program for fast-tracking letter ruling requests primarily under the jurisdiction of the associate chief counsel who handles corporate matters.
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August 10, 2023
US Looks To Pause Ex-College Owner's $35M Tax Refund Suit
A California federal court should pause a $34.7 million tax refund case brought by the former owner of several for-profit colleges because a related case is making its way through the U.S. Tax Court, the government said.
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August 10, 2023
IRS Failing To Protect Taxpayer Info On Microfilm, TIGTA Says
The Internal Revenue Service is failing to adequately safeguard sensitive taxpayer information on microfilm, such as by not performing required microfilm inventories at the agency's three tax processing centers, the Treasury Inspector General for Tax Administration said in a report released Thursday.
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August 10, 2023
IRS Drops France-Backed Summons For Financial Records
A Bulgarian who sued to stop the Internal Revenue Service from carrying out a summons of his financial records sought by France filed an unopposed motion Thursday asking a Nebraska federal court to dismiss the case because the IRS had withdrawn its petition.
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August 10, 2023
FTC Wants Intuit Chair DQ Bid Tossed In TurboTax Case
The Federal Trade Commission hit back against allegations by Intuit that agency head Lina M. Khan should be disqualified from presiding over an in-house case on whether the company duped consumers into believing they could file their taxes free of charge for using its TurboTax product.
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August 10, 2023
Tax Court Says Man's Payments Weren't For Tax Year At Issue
A taxpayer failed to show that payments he made to the IRS were creditable toward his 2018 tax liability, the U.S. Tax Court ruled Thursday, finding the payments were for liabilities from other years.
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August 10, 2023
IRS Review Finds 20K Taxpayer Accounts Wrongly Locked
The Treasury Inspector General for Tax Administration flagged almost 78,000 taxpayer accounts locked on the possibly mistaken premise that the taxpayer was dead, and the IRS confirmed that 26%, more than 20,000, had been wrongly locked, according a report released Thursday.
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August 10, 2023
Tax Court Denies Pa. Man's Late Refund Request
A Pennsylvania man will not receive a refund for a tax overpayment after filing a claim beyond the statute of limitations, the U.S. Tax Court ruled Thursday.
Expert Analysis
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Money Laundering Regs Too Unwieldy To Police Art Market
As the arts and antiquities trade awaits the U.S. Department of the Treasury's new money laundering regulations — which apply the Bank Secrecy Act to the arts for the first time — whether they are reasonable, optimal or practical remains in question, says Alexandra Darraby at The Art Law Firm.
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Why US Businesses May Stop Accepting Cryptocurrency
New reporting requirements from the IRS and Financial Crimes Enforcement Network could be game changers that dramatically curtail U.S. businesses that accept cryptocurrency, says cybersecurity consultant John Reed Stark.
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The Highs And Lows Of Tax Controversy In 2021
Lawrence Hill at Steptoe & Johnson reviews the ups and downs of tax controversy practice in 2021, including the continued effects of the pandemic, troubling decisions on attorney-client privilege and an IRS comeback on transfer pricing.
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A Look At Tax Treatment Of Noncompetes In M&A: Part 2
Excerpt from Practical Guidance
Covenants that restrict a seller of business assets from competing against the purchasing party can be prone to challenges because the allocation of value to intangible assets is a subjective exercise with significant tax implications that may affect the merits of the deal, says Peter Miller at LexisNexis.
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A Look At Tax Treatment Of Noncompetes In M&A: Part 1
Excerpt from Practical Guidance
In negotiating to consummate a deal, parties must pay attention to the tax consequences of covenants that restrict a seller of business assets from competing against the purchasing party, says Peter Miller at LexisNexis.
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How Budget Bill Could Affect Employer Health, Benefit Plans
Following the House's recent passage of President Joe Biden’s $1.75 trillion spending bill — the Build Back Better Act — employers should carefully consider several of the proposal’s health care and benefits provisions, which could pose immediate compliance challenges if the act is signed into law this year, say Anne Hall and Tim Kennedy at Hall Benefits Law.
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3 Forces That Will Define Sales Tax Compliance In 2022
As we head into 2022, it's likely that many of the legal and cultural shifts we saw this year — such as increased adoption of economic nexus and marketplace facilitator laws, growth in state budgets and continuation of remote work — will define sales tax compliance in the new year, says Liz Armbruester at Avalara.
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When And How To Depose Fact Witnesses Remotely In 2022
Tim Tryniecki and Thomas Mudd at MG+M offer a series of practice tips for successfully conducting remote depositions of often-inexperienced fact witnesses, as the virtual court proceedings sparked by COVID-19 look set to become a part of the legal landscape next year.
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EU, US Carbon Import Tax Proposals: What Cos. Must Know
With the European Union working on a carbon border adjustment mechanism, and congressional Democrats formulating their own carbon import tax plans, U.S. businesses — especially those in emissions-intensive, trade-exposed industry sectors — could face adverse trade effects, supply chain problems and increased transactional costs, say attorneys at Hogan Lovells.
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Navigating CARES Act Social Security Tax Deferral Payments
Attorneys at Morgan Lewis examine Internal Revenue Service guidance on payment of employer-share social security tax deferrals due Jan. 3 under the Coronavirus Aid Relief and Economic Security Act, and offer tips for avoiding costly underpayment and late deposit penalties.
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Tech Improvements That Can Help Gov't Tackle FOIA Backlog
Government agencies can implement effective technological solutions that will help them address the growing backlog of Freedom of Information Act requests, and avoid costly noncompliance litigation, by taking steps to identify agency-specific needs, develop cohesive strategies and obtain leadership buy-in, say Ken Koch and Erica Spector at KPMG.
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IRS Memo Helps Clarify Research Credit Filing Requirements
A recently published Internal Revenue Service chief counsel memorandum offers long-awaited guidance about information requirements for taxpayers seeking research credit refunds and provides helpful notice of the agency’s litigating position where credits are denied, say Deborah Roth and Brian Coddington at Source Advisors.
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Questions To Ask If Doing Business In A Corruption Hot Spot
Businesses facing new scrutiny after the U.S. Department of Justice's recently announced task force for combating human trafficking in Central America, the release of the Pandora Papers and continuing fallout from 2019's Panama Papers, should address compliance risks by having employees ask three questions about every transaction, say attorneys at White & Case.