Federal
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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.
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March 26, 2024
Nev. Foreclosed Property To Be Sold To Pay Co.'s Tax Debt
A Nevada federal court approved the sale of a foreclosed Las Vegas property in the federal government's efforts to recoup nearly $943,000 in taxes owed by a security company.
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March 26, 2024
IRS Fixes Typo In Contribution Rules
The Internal Revenue Service issued a correction notice Tuesday fixing a typographical error within regulations about contributions to certain organizations.
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March 25, 2024
Clean Hydrogen Tax Credit Regs' Pillars Too Strict, IRS Told
The so-called three pillars in proposed clean hydrogen production tax credit rules used to determine the incentive's value would prevent the rapid scaling of a nascent sector that aims to produce zero-carbon emissions fuel, stakeholders told the Internal Revenue Service on Monday.
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March 25, 2024
Tax Groups Urge Justices To Review Philly Tax Credit System
The U.S. Supreme Court should hear a woman's claims that Philadelphia unconstitutionally declined to credit her Delaware state income taxes paid against her city wage tax liabilities, a taxpayer advocacy organization and a group of tax lawyers told the justices Monday.
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March 25, 2024
Alaskans Hit By Storms Can Delay IRS Tax Filings, Payments
Taxpayers in Alaska impacted by severe storms, landslides and mudslides that started Nov. 20 now have until July 15 to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service said Monday.
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March 25, 2024
Tax Court Upholds Med Spa Owner's Fraud Penalties
A registered nurse and her medical spa that offered botox and liposuction treatments in Kansas owe more than $700,000 in civil fraud penalties related to the nurse's conviction for tax evasion for misusing cash payments from clients, the U.S. Tax Court ruled Monday.
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March 25, 2024
Unpaid Taxes Fall On CEO's Shoulders, Tax Court Says
The CEO of a company is responsible for settling any unpaid liabilities despite his hiring of an accountant who embezzled a portion of the company's employment taxes, the U.S. Tax Court ruled Monday.
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March 25, 2024
Student Loan Refinancing Doesn't Affect Borrower Eligibility
Students as well as parents are considered eligible borrowers of a refinancing qualified student loan under a state supplemental loan program, regardless of who was the original borrower, the Internal Revenue Service said Monday.
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March 25, 2024
7th Circ. Affirms Co. Can't Get $3.5M Software Deduction
A healthcare company that helps nursing homes buy equipment is not entitled to $3.5 million in tax deductions meant for domestic software production, the Seventh Circuit ruled, saying the company failed to meet the threshold for the break because it didn't actually provide software to customers.
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March 22, 2024
Up Next At High Court: Abortion, Jury Trials And Estate Tax
The U.S. Supreme Court will hear oral arguments this week over the U.S. Food and Drug Administration's decision expanding access to popular abortion pill mifepristone as well as whether juries should determine a defendants' eligibility for repeat offender enhanced sentencing under the Armed Career Criminal Act and how long federal employees have to appeal adverse employment decisions.
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March 22, 2024
Ill. Atty Tampered With Witness In Own Fraud Case, Feds Say
A Chicago-area lawyer facing criminal tax fraud charges has been slapped with a superseding indictment accusing him of witness tampering by trying to script a bookkeeper's testimony, according to an announcement made Friday.
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March 22, 2024
IRS Proposes Annuity Trusts As Listed Transactions
The Internal Revenue Service unveiled proposed rules Friday that would list certain charitable remainder annuity trusts as transactions that can potentially be abusive tax shelters, requiring additional disclosures under the threat of penalty for participants involved in such arrangements.
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March 22, 2024
Businessman Indicted Over Hiding Of $20M In Swiss Accounts
A Brazilian-American businessman accused by the government in a criminal complaint of hiding $20 million from the Internal Revenue Service over 35 years by using Swiss bank accounts was indicted by a federal grand jury in Miami and charged with tax evasion, according to a Florida federal court.
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March 22, 2024
Stock Buyback Tax Regs Imminent, Treasury Official Says
Proposed regulations on the federal stock buyback tax will be released imminently and will address feedback on a rule designed to prevent foreign companies from avoiding the tax using U.S. affiliates, a Treasury official said Friday.
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March 22, 2024
IRS Opens Bonus Energy Credits To More Offshore Wind Sites
The Internal Revenue Service unveiled guidance Friday that would allow more parts of offshore wind facilities to qualify for the bonus production and investment tax credits that provide incentives for clean energy projects being built in so-called energy communities.
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March 22, 2024
LA Atty Who Repped Rodney King Charged With Tax Evasion
A Los Angeles attorney who represented Rodney King in a civil case against the city of Los Angeles after King was severely beaten by police has been hit with federal tax evasion charges.
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March 22, 2024
3rd Circ. Says Tax Court Has Power To Tackle Debt Offset Case
A woman whose tax refunds were withheld by the Internal Revenue Service for five years to satisfy what the agency said was her underlying tax liability will get another chance to convince the U.S. Tax Court that the government was wrong, the Third Circuit ruled Friday.
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March 22, 2024
IRS Pauses Worker Retention Credit Disclosure Program
The Internal Revenue Service is suspending its voluntary disclosure program for improperly claimed employee retention credits, the agency announced Friday.
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March 22, 2024
Married Doctors Owe Feds $2.9M In Taxes
A Connecticut physician couple must pay $2.9 million in back taxes, interest and penalties plus statutory additions after a federal court ruled they failed to produce enough evidence to challenge the accuracy of the U.S. government's tax assessments against them.
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March 22, 2024
Ariz. Says Federal Tax On Rebates Contradicts IRS Guidance
A decision by the Internal Revenue Service to impose federal income tax on rebates issued last year by Arizona violates the agency's own recent guidance, the state told a federal court, saying a preliminary injunction against the tax would not unduly burden the agency.
Expert Analysis
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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.
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How Foreign Info Return Penalty Case May Benefit Taxpayers
The U.S. Tax Court's recent decision that the Internal Revenue Service cannot penalize taxpayers for failing to file foreign corporation information returns may give similarly situated taxpayers an opportunity to also avoid penalties, provided they protect their rights before the decision is overturned or mooted by legislation, say attorneys at Arnold & Porter.