Federal
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April 19, 2024
Miami Tax Prep Biz Should Be Shut Off For Fraud, DOJ Says
A Miami tax preparation business and its owner should be permanently barred from preparing returns after illegally understating customers' liabilities and causing a $500,000 tax loss to the U.S. government for 2023, the U.S. Department of Justice told a Florida federal court.
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April 19, 2024
IRS Corrects Advanced Manufacturing Credit Rules
The Internal Revenue Service issued a correction notice Friday, fixing a number of errors in final regulations concerning the elective payment election of the advanced manufacturing investment credit under a 2022 law that established the credit.
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April 19, 2024
Insurance Co's Shifting Payments Still Fixed Asset, IRS Says
A stock life insurance company's fixed annuity contract involving structured settlement transactions can still qualify as a funding asset, even though the payment amounts increase with the market, the Internal Revenue Service said in a pair of private letter rulings released Friday.
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April 19, 2024
Taxation With Representation: Kirkland, Cleary, O'Melveny
In this week's Taxation With Representation, Resideo Technologies Inc. announced plans to buy Snap One Holdings Corp., APi Group said it bought an elevator maintenance company, Prysmian said it agreed to purchase Encore Wire, and Sayari said it closed on an investment from TPG.
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April 19, 2024
Questions Loom Over China's Pillar 2 Participation
Practical and political problems surrounding the Organization for Economic Cooperation and Development's 15% global minimum corporate tax raise questions about how China and its biggest companies could undermine that regime.
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April 18, 2024
Brothers Can't Deduct $3.8M Theft Loss, Tax Court Says
Two brothers who claimed that a convicted fraudster stole from a holding company for their struggling savings and loan can't take a theft-loss deduction topping $3.8 million because they failed to prove a connection to the fraud, the U.S. Tax Court ruled Thursday.
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April 18, 2024
Donor Fund Rules Unlikely To Be Retroactive, Officials Say
Proposed regulations from the U.S. Department of the Treasury and Internal Revenue Service on donor-advised funds will likely be changed so that they don't apply retroactively, government officials said Thursday.
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April 18, 2024
AbbVie Can't Get Deduction For $1.6B Merger Fee, IRS Says
The IRS defended its denial of AbbVie's claimed deduction for a $1.6 billion payment to a biotechnology company over their failed merger, telling the U.S. Tax Court that the pharmaceutical giant is misconstruing an underlying statute to challenge the agency's decision.
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April 18, 2024
Clinic Head Gets 9 Years For Medicare Kickback, Tax Scheme
A health clinic manager was sentenced to nine years in prison and ordered to pay $40 million in restitution to the government for participating in a multimillion-dollar healthcare kickback scheme that involved tax fraud, according to documents in a New York federal court.
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April 18, 2024
AICPA Offers Support For Disaster Tax Lookback Plan
A House proposal that would allow for those affected by disasters to extend the period for claiming tax credits or refunds when granted postponements for filing tax returns received support from the American Institute of Certified Public Accountants.
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April 18, 2024
IRS Updates Rates For Foreign Insurance Company Equations
The Internal Revenue Service published updated domestic asset/liability and yields percentages Thursday that foreign life insurance companies as well as foreign property and liability insurance companies need to compute their minimum effectively connected net investment income for tax years starting in 2023.
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April 18, 2024
$32B More In Tax Yielded In Fiscal '23 Closed Audits, IRS Says
The Internal Revenue Service closed nearly 583,000 tax return audits in fiscal year 2023, resulting in $31.9 billion of recommended additional tax after examination, the agency said Thursday in its annual data book.
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April 18, 2024
Atty In Tax Fraud Must Pay Full $2.5M Per Plea Deal, Feds Say
A former Houston attorney set to be sentenced Friday for his role in an $18 million offshore tax scheme is trying to limit the government's ability to collect $2.5 million in restitution he promised to pay in a plea agreement last year, prosecutors told a Texas federal court Thursday.
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April 18, 2024
IRS Seeks Advisory Council Noms, Creates Fairness Panel
The Internal Revenue Service is seeking nominations for the council that advises the agency's commissioner, the IRS said Thursday, while the council is also launching a new subcommittee on fairness in tax administration.
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April 18, 2024
Transfer Pricing And Dancing: Recalling KPMG's Sean Foley
Sean Foley, who died suddenly in September, was a devoted husband, father, brother and friend and a brilliant colleague. He was one of the world's top experts in an area of international tax known as transfer pricing, where he became the global leader of KPMG's practice.
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April 18, 2024
IRS Adds 2nd Public Hearing Day On Donor-Advised Regs
The Internal Revenue Service has added a second, telephone-only public hearing in May on proposed regulations on excise taxes on certain taxable distributions made from donor-advised funds, the agency announced Thursday.
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April 17, 2024
'I Am Mad': Client Regrets Trusting Atty Accused Of Tax Fraud
Emotions ran high Wednesday in a North Carolina federal courtroom as former clients unwittingly roped into an alleged tax fraud scheme took the stand, one of whom was openly exasperated at learning he'd been misled by the two attorneys and an insurance agent who are on trial.
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April 17, 2024
Damages Still Possible In Lease Tax Reimbursement Row
A Court of Federal Claims judge has ruled that the General Services Administration could unilaterally adjust the real estate tax reimbursement methodology under a lease for the Defense Health Agency's headquarters building, but the building owner may still be owed damages.
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April 17, 2024
EV Tax Credit Restrictions, Trade Bills Advance In House
The House Ways and Means Committee advanced several trade bills Wednesday that would impose more restrictions for new electric vehicles to qualify for a federal tax credit, assert congressional authority in agreements with foreign governments, and renew the country's largest and oldest trade preferences program.
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April 17, 2024
$22B In Earned Income Tax Credits Wrongly Handed Out
The U.S. Treasury Department improperly allowed an estimated $22 billion in earned income tax credits during fiscal year 2023, according to a report made public Wednesday by the Government Accountability Office.
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April 17, 2024
EmblemHealth Pushes IRS To Hand Over $6.7M Tax Refund
Not-for-profit insurance company EmblemHealth asked a New York federal court Wednesday to grant it a nearly $6.7 million tax refund, saying the Internal Revenue Service left a voicemail accepting its refund claim in February but still hasn't delivered the money.
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April 17, 2024
Utility Energy Subsidies Not Eligible For Credits, IRS Says
A taxpayer may not claim certain clean energy credits for the amount of a subsidy provided by a public utility for the purchase or installation of energy conservation measures, the Internal Revenue Service said Wednesday.
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April 17, 2024
Tax Court Rejects NJ Lawyer's Protest Of IRS Collection
The Internal Revenue Service didn't abuse its discretion when it denied a New Jersey lawyer's request for collection alternatives, the U.S. Tax Court ruled Wednesday.
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April 17, 2024
9th Circ. Tosses $3.9M Tax Foreclosure Appeal As Premature
The Ninth Circuit dismissed a man's challenge to a court order that he believed allowed the government to foreclose on his property to pay his son's tax liabilities of more than $3.9 million, saying Wednesday that the appeal was premature because the order wasn't final.
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April 17, 2024
Judge Delays Trial Over $20M Allegedly Hidden From IRS
A Florida federal judge agreed Wednesday to delay the trial of a Brazilian-American businessman accused of hiding $20 million from the Internal Revenue Service by using Swiss bank accounts, but told the defendant the new deadlines are firm.
Expert Analysis
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The Pop Culture Docket: Judge Espinosa On 'Lincoln Lawyer'
The murder trials in Netflix’s “The Lincoln Lawyer” illustrate the stark contrast between the ethical high ground that fosters and maintains the criminal justice system's integrity, and the ethical abyss that can undermine it, with an important reminder for all legal practitioners, say Judge Adam Espinosa and Andrew Howard at the Colorado 2nd Judicial District Court.
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Newman Suspension Shows Need For Judicial Reform
The recent suspension of U.S. Circuit Judge Pauline Newman following her alleged refusal to participate in a disability inquiry reveals the need for judicial misconduct reforms to ensure that judges step down when they can no longer serve effectively, says Aliza Shatzman at The Legal Accountability Project.
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How And Why Your Firm Should Implement Fixed-Fee Billing
Amid rising burnout in the legal industry and client efforts to curtail spending, pivoting to a fixed-fee billing model may improve client-attorney relationships and offer lawyers financial, logistical and stress relief — while still maintaining profit margins, say Kevin Henderson and Eric Pacifici at SMB Law Group.
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How Law Firms Can Use Account-Based Marketing Strategies
Amid several evolving legal industry trends, account-based marketing can help law firms uncover additional revenue-generating opportunities with existing clients, with key considerations ranging from data analytics to relationship building, say Jennifer Ramsey at stage LLC and consultant Gina Sponzilli.
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While Risks Exist, AI Could Transform IRS Enforcement
The Internal Revenue Service's recently announced use of artificial intelligence could revolutionize the agency's enforcement efforts, and transparency about its use and a forum for challenging AI findings could help mitigate fears that the technology will increase bias, say attorneys at Lewis Brisbois.
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Strategic Succession Planning At Law Firms Is Crucial
Senior partners' reluctance to retire, the rise of the nonequity partner tier and generational differences in expectations are all contributing to an increasing number of departures from BigLaw, making it imperative for firms to encourage retirement among senior ranks and provide clearer leadership pathways to junior attorneys, says Laura Leopard at Leopard Solutions.
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Maximizing Law Firm Profitability In Uncertain Times
As threats of an economic downturn loom, firms can boost profits by embracing the power of bottom-line management and creating an ecosystem where strategic financial oversight and robust timekeeping practices meet evolved client relations, says Shireen Hilal at Maior Strategic Consulting.
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Enforcement Of International Tax Reporting Is Heating Up
Since the U.S. Supreme Court’s February decision in Bittner v. U.S. changed how penalties for failure to report offshore accounts are calculated, recent developments suggest the government is preparing to step up enforcement and vigorously pursue the collection of resulting penalties, say Daniel Silva and Agustin Ceballos at Buchalter.
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How Gov't Agencies Will Fare In The Event Of A Shutdown
With a federal shutdown potentially set to begin at the end of this month, it may be useful to consider the approximate timelines that agencies such as the Federal Trade Commission and IRS have announced for curtailing operations, and potential strategies for mitigating challenges that may arise while agency functions are limited, say attorneys at Cleary.
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IRS Notice Clarifies R&E Amortization, But Questions Remain
The IRS and Treasury Department’s recent notice clarifying the treatment of specified research and experimental expenditures under Section 174 provides taxpayers and practitioners with substantive guidance, but it misses the mark in delineating which expenditures are amortizable, say attorneys at Eversheds Sutherland.
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Preparing Your Legal Department For Pillar 2 Compliance
Multinational entities should familiarize themselves with Pillar Two of the Organization for Economic Cooperation and Development’s BEPs 2.0 project and prepare their internal legal tracking systems for related reporting requirements that may go into effect as early as January, says Daniel Robyn at Ernst & Young.
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What Large Language Models Mean For Document Review
Courts often subject parties using technology assisted review to greater scrutiny than parties conducting linear, manual document review, so parties using large language models for document review should expect even more attention, along with a corresponding need for quality control and validation, say attorneys at Sidley.
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Participating In Living History Makes Me A Better Lawyer
My role as a baron in a living history group, and my work as volunteer corporate counsel for a book series fan association, has provided me several opportunities to practice in unexpected areas of law — opening doors to experiences that have nurtured invaluable personal and professional skills, says Matthew Parker at the Nebraska Department of Health and Human Services.