Federal
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March 14, 2024
IRS' Signals On Economic Substance Doctrine Draw Scrutiny
The Internal Revenue Service's recent legal success asserting a doctrine to invalidate transactions in tax law enforcement matters may embolden the government to broaden that argument's reach, and lawyers are concerned it doesn't properly apply to transfer pricing matters.
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March 13, 2024
Siemens Asks Tax Court To Toss $1.2B IRS Bill
A U.S. subsidiary of German technology company Siemens is pushing the U.S. Tax Court to throw out $1.16 billion in tax deficiencies and penalties the IRS has imposed, saying the agency relied on invalid rules in denying a deduction.
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March 13, 2024
Tax Court Calls CPA's Deduction Testimony 'Contradictory'
A California certified public accountant cannot deduct nearly $600,000 in assorted expenses — including more than $437,000 in net operating losses — after providing "contradictory" testimony and failing to present credible evidence, the U.S. Tax Court ruled Wednesday.
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March 13, 2024
Actuary Board Looks To End In-Person Learning Requirement
The Joint Board for the Enrollment of Actuaries has proposed eliminating a requirement that continuing education programs be attended in person, the Internal Revenue Service said Wednesday.
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March 13, 2024
Deputy To Take Over As IRS Criminal Investigation Chief
The deputy chief of the Internal Revenue Service's Criminal Investigation division will take the helm of the division when its current chief steps down April 6, the agency said Wednesday.
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March 13, 2024
2nd Circ. Affirms Barring Of Man's Appeal In Small Tax Case
The Second Circuit rejected a taxpayer's attempt to resurrect his dispute over a tax deficiency Wednesday, affirming that a statute prohibits appeals of U.S. Tax Court decisions in certain cases involving low dollar amounts.
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March 13, 2024
6th Circ. Told Woman Helped Life Partner Avoid $3M In Taxes
The federal government justifiably sold off the property of a woman who paid for it with money from her dead long-term life partner, the U.S. government told the Sixth Circuit on Wednesday, saying the purchase helped her partner skirt more than $3 million in tax liabilities.
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March 13, 2024
JCT Indicates Pillar 1 Is Bad Deal For US, GOP Lawmakers Say
An analysis of the Organization for Economic Cooperation and Development's Pillar One taxing rights overhaul by congressional scorekeepers makes clear the plan should not receive U.S. support because it would disadvantage U.S. multinationals and federal tax revenue, Republican leaders of Congress' taxwriting committees said Wednesday.
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March 13, 2024
Longtime Stradley Ronon Tax Partner Joins Grant Thornton
Following more than a quarter-century practicing law with Stradley Ronon Stevens & Young LLP, longtime tax attorney Chris Scarpa decided to change career paths, joining accounting firm Grant Thornton LLP.
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March 13, 2024
Ex-Super Bowl Champ Owes $15M Tax After Default, US Says
A California federal court should issue a default judgment for $15.5 million in federal income taxes against four-time Super Bowl champion Bill Romanowski and his wife, the U.S. government argued, saying the couple has failed to participate in a collection case against them.
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March 13, 2024
IRS Art Appraisal Panel Schedules April Meeting
The Internal Revenue Service committee that appraises art for tax purposes will hold its next meeting April 17, the agency said Wednesday.
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March 12, 2024
IRS Mulling Partnership Foreign Currency Rules, Official Says
The Internal Revenue Service will likely propose rules that would provide additional guidance to partnerships for determining taxable income or loss with respect to certain affiliates that conduct business in a foreign currency, an agency official said Tuesday.
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March 12, 2024
NC Software Execs Convicted Of Payroll Tax Crimes
Two former software executives in North Carolina were convicted Tuesday of failing to pay hundreds of thousands of dollars in employment taxes, but were absolved of charges that they lied on their individual tax returns, bringing to a close their five-day trial in Charlotte's federal courthouse.
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March 12, 2024
IRS Fully Opens Direct E-File Pilot Program In 12 States
The Internal Revenue Service's free electronic tax-return filing pilot program is now open to all 19 million eligible taxpayers in the 12 states where people can participate, agency Commissioner Daniel Werfel told reporters Tuesday.
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March 12, 2024
Calif. Man Agrees To Pay Nearly $500K In FBAR Penalties
A California man agreed to pay almost $500,000 in penalties, late fees and interest for failing to report his bank accounts in the Bahamas on his tax forms, according to a stipulated order entered by a California federal court.
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March 12, 2024
Wis. Firm Must Comply With IRS Search, Tax Court Says
A Wisconsin engineering firm must prove it is eligible for $240,000 in research tax credits by accommodating a broadened discovery initiated by the Internal Revenue Service, not just a sampling of the firm's data, the U.S. Tax Court ruled Tuesday.
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March 12, 2024
GOP's Crapo Wants Quick Resolution Of Tax Relief Package
The Senate Finance Committee's top Republican tax writer said Tuesday that he wants to quickly resolve sticking points in pending bipartisan tax legislation that contains key incentives for families and businesses in order to advance a bill that would boost U.S. manufacturing.
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March 12, 2024
Businessman Hid $20M In Swiss Accounts, US Says
A Brazilian-American businessman hid $20 million from the Internal Revenue Service over 35 years using accounts at Swiss banks including UBS and Credit Suisse, the U.S. government said in a criminal complaint that accuses him of conspiring to defraud the U.S. and lying to authorities.
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March 12, 2024
US, Turkey Extend Digital Services Tax Deal
Turkey will continue to apply its digital services tax as negotiations over the Pillar One international profit reallocation agreement continue, the country said Tuesday in a joint statement with the U.S. government
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March 11, 2024
'I Made A Huge Mistake,' Software Exec Says In Tax Fraud Trial
Two former software executives in North Carolina took the stand Monday in the government's tax fraud trial against them, where they portrayed a company in extreme distress as hundreds of thousands of dollars in employment taxes went unpaid and their personal lives crumbled.
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March 11, 2024
FedEx Says Gov't Can't Redo $85M Foreign Tax Credit Case
The U.S. government is trying to relitigate a Tennessee federal court's decision that sided with FedEx in a foreign tax credit dispute, the company said in asking the court to rule that it's entitled to a refund of nearly $85 million.
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March 11, 2024
Electronics Co. Disputes $187M Income Tax Bill From IRS
The Internal Revenue Service erroneously increased the income tax liability of an audio electronics company by $187 million, the business argued in a U.S. Tax Court petition.
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March 11, 2024
Biden Proposes Increased Wealth Taxes In $7.3T Budget Plan
The White House unveiled its $7.3 trillion budget plan for fiscal 2025 on Monday, proposing higher taxes on wealthy corporations and individuals, expanding tax relief for Americans making under $400,000 per year and cutting the federal deficit by $3 trillion over the next decade.
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March 11, 2024
US Appeals Corporate Transparency Act Ruling To 11th Circ.
The U.S. Department of the Treasury is moving quickly to appeal an Alabama federal judge's ruling that the Corporate Transparency Act is unconstitutional, filing a notice of appeal to the Eleventh Circuit on Monday.
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March 11, 2024
Tax Court Turns Down Late-Filed Spousal Petition
The U.S. Tax Court ruled Monday that it lacked authority to hear a man's case for innocent spouse relief because he failed to file a petition within the 90-day deadline, holding that Congress clearly stated the deadline is jurisdictional.
Expert Analysis
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Tax Pitfalls To Avoid In Employment Litigation Settlements
Downsizing companies should keep certain questions in mind when settling claims with departing employees to ensure they understand associated tax withholding and reporting obligations, and avoid costly interest and penalties down the road, says Matthew Meltzer at Flaster Greenberg.
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Key Considerations For Taxpayers Deducting Crypto Losses
While a recent Internal Revenue Service memorandum is helpful in providing insight into how the agency is considering guidance related to cryptocurrency, questions remain with respect to whether a taxpayer can claim a tax deduction for cryptocurrency losses, say attorneys at McDermott.
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Justices' MoneyGram Opinion Could Spur State Legislation
The U.S. Supreme Court’s recent decision that federal law governs the escheatment of over $250 million in unclaimed MoneyGram checks provides clarity for some issuers, but aspects of related common law remain uncertain and states may take the opportunity to pass multistate escheatment legislation, say attorneys at Alston & Bird.
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Justices Leave Questions Open On Dual-Purpose Atty Advice
The U.S. Supreme Court's recent dismissal of In re: Grand Jury on grounds that certiorari was improvidently granted leaves unresolved a circuit split over the proper test for deciding when attorney-client privilege protects a lawyer's advice that has multiple purposes, say Susan Combs and Richard Kiely at Holland & Hart.
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Employee Retention Tax Credit: Gray Areas And Red Flags
The subjective nature of the pandemic-prompted employee retention credit, coupled with a lack of Internal Revenue Service guidance, have created fertile ground for opportunists, so businesses seeking this tax benefit should be mindful of tax advisers who would involve them in fraudulent ERC claims, say attorneys at Holland & Knight.
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High Court Ax Of Atty-Client Privilege Case Deepens Split
The U.S. Supreme Court's recent dismissal of In re: Grand Jury as improvidently granted maintains a three-way circuit split on the application of attorney-client privilege to multipurpose communications, although the justices have at least shown a desire to address it, say Trey Bourn and Thomas DiStanislao at Butler Snow.
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Clean Energy Tax Credits' Wage, Apprentice Rules: Key Points
The Inflation Reduction Act's complicated prevailing wage and apprenticeship requirements for clean energy facility construction tax credits recently took effect — and the learning curve will be more difficult for taxpayers who are not already familiar with such programs, say attorneys at Shearman.
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Crypto Coverage After FTX Fall: Crime And Custody Coverage
Cryptocurrency firm FTX's recent implosion provides a case study for potential crypto exposure under traditional insurance policies, and suggests carriers should ask some basic underwriting questions, including whether a company engages in transactions involving cryptocurrencies or holds digital assets in custody, says Anjali Das at Wilson Elser.
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US-India Advance Pricing Resolutions Should Reassure Cos.
The United States' and India's tax authorities' recent resolution of a significant number of pending advance pricing agreements should reduce taxpayer uncertainty, reassure companies of the nations' good working relationship and improve India's investment environment, say Miller Williams and Caroline Setliffe at Eversheds Sutherland.
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Reimagining Benefits For A World Without Noncompetes
Though the Federal Trade Commission's recently proposed noncompete ban is still in its infancy, companies should begin considering whether they would need to retool their payment and benefits packages to comply, while still protecting their competitive edge, say Melissa Ostrower and Alec Nealon at Jackson Lewis.
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A Closer Look At Rep. Santos' Claims And Potential Charges
Skadden partner and former federal prosecutor Maria Cruz Melendez discusses Rep. George Santos' legal exposure following his alleged misrepresentations and the possible scope of investigations into his conduct — noting that if history is any indication, the congressman could face prison time if convicted.
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Stock Buyback Excise Tax Guidance A Mixed Bag For SPACs
Recent IRS guidance on the new stock repurchase excise tax includes a welcome exception for publicly traded special-purpose acquisition companies but does not exclude redemptions in connection with a de-SPAC transaction, and further guidance is needed to clarify ambiguities around the exception's application, say Olga Bogush and Evgeny Magidenko at ArentFox Schiff.
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Crypto Coverage After FTX Fall: Accountant And Atty Liability
The recent fall of cryptocurrency firm FTX highlights complexities regarding accounting and tax reporting for digital assets, and reveals lawyers’ potential liability exposure when providing services to crypto firms — as a result, insurers may face unintended vulnerabilities related to this nebulous landscape, say Anjali Das and Farzana Ahmed at Wilson Elser.