Federal
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April 16, 2024
Ex-Prisoner Not Properly Notified Of Tax Bill, Court Says
A man who was awarded a $201,000 settlement for a prison injury that left him nearly blind in one eye was not properly notified by the IRS that he had failed to pay taxes on the award, the U.S. Tax Court ruled Tuesday.
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April 16, 2024
Estate Asks 9th Circ. For Rehearing Over Tax Bill
The estate of a woman whose trust transferred $1.06 million to her son before she died is asking the Ninth Circuit to rethink its decision upholding $38,000 in federal estate taxes, arguing that the U.S. Tax Court lacked authority to determine the deficiency in the first place.
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April 16, 2024
Retrial For Feds' Conduct Denied In $12M Tax Fraud Case
An Atlanta man convicted of running a $12 million tax refund fraud scheme isn't entitled to a new trial even though federal prosecutors withheld evidence that the man said minimized his role in the crime, a federal judge ruled.
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April 16, 2024
Moving Co. Execs Found Guilty In $7.7M Payroll Tax Scheme
The former president of a moving company and its head bookkeeper conspired to evade more than $7.7 million in federal payroll taxes, a New York federal jury has found.
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April 16, 2024
Work-Life Referral Services Don't Count As Income, IRS Says
Work-life referral services, which employers provide to help employees with personal, family or work challenges, shouldn't be included in workers' gross income, the Internal Revenue Service said Tuesday.
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April 16, 2024
Applicable Federal Interest Rates To Rise In May
Applicable federal rates for income tax purposes will rise in May, the Internal Revenue Service said Tuesday.
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April 15, 2024
Tax Attys, Broker Peddled 'Financial Fantasy,' NC Jury Told
A North Carolina federal jury on Monday heard a series of secret recordings at the start of a tax fraud trial in which an insurance agent and a St. Louis attorney unwittingly pitched an undercover IRS agent on a way to decrease taxable income — or what the government characterized as a "financial fantasy."
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April 15, 2024
Exxon Seeks $1.8B Tax Refund As Qatar Deal Trial Opens
Exxon Mobil Corp. argued Monday in Texas federal court that its deal with Qatar to extract natural gas from the country's coast was a partnership, rather than a lease agreement, saying at the start of a trial that it's entitled to get $1.8 billion in tax benefits back from the IRS.
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April 15, 2024
House OKs Ending Exemption For Terrorist-Supporting Orgs
The House passed legislation Monday that would authorize the Internal Revenue Service to suspend the tax-exempt status of any nonprofit organization found by the U.S. Treasury secretary to support foreign terrorism.
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April 15, 2024
8th Circ. Urged To Revive IRS' Pricing For Medtronic
The U.S. government urged the Eighth Circuit on Monday to side with the IRS' method for pricing the intangible property that medical device maker Medtronic licensed to a Puerto Rican affiliate, arguing it's the only way to determine arm's-length royalty rates.
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April 15, 2024
Donor Fund Regs Could Imperil Nonprofit-Sponsored Projects
So-called fiscal sponsorship funds set up at established nonprofits to help new projects start charitable work could be unexpectedly threatened by proposed IRS and Treasury rules on donor-advised funds that could subject such arrangements to burdensome taxes, experts say.
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April 15, 2024
IRS Boasts Better Service, Direct File Progress On Tax Day
The IRS achieved an 88% level of service this year on its phone lines and maintained an average call wait time of three minutes while answering more than a million more calls than last year's filing season, the U.S. Department of the Treasury announced Monday.
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April 15, 2024
Tax Court Finds Woman Liable Despite Divorce Decree
A Connecticut woman is jointly and severably liable for tax liabilities despite a divorce decree that calls for them to be her ex-husband's responsibility, according to a transcript released Monday by the U.S. Tax Court.
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April 15, 2024
AICPA Calls For Clearer Forms For Tax-Exempt Orgs
The Internal Revenue Service ought to clarify filing requirements for forms in order to simplify the filing process for tax-exempt organizations, the American Institute of Certified Public Accountants said in a letter made public Monday.
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April 15, 2024
'Magician' Tax Preparer Arrested On $100M Fraud Charges
The owner of a New York tax preparation business who was known as "the magician" was arrested Monday on charges that he caused more than $100 million in tax losses to the government over a decade, according to the U.S. Department of Justice.
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April 15, 2024
Madoff Victims Can't Claim Theft Deduction, Tax Court Rules
A New York couple who fell victim to Bernie Madoff's Ponzi scheme were properly denied a theft loss deduction because they did not own the assets that were stolen, the U.S. Tax Court ruled Monday.
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April 15, 2024
9th Circ. To Hear Hunter Biden Appeal In Criminal Tax Case
The Ninth Circuit will hear Hunter Biden's argument that a California federal judge wrongly rejected requests by his defense team to toss a criminal tax case that Biden has claimed is politically motivated and vindictive, according to a notice filed Monday.
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April 15, 2024
IRS Waives Penalties For Not Paying Corp. Minimum Tax
The Internal Revenue Service is waiving penalties for failure to make estimated quarterly payments of the corporate alternative minimum tax through at least April 15, the agency said Monday.
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April 15, 2024
IRS Improves Adherence To FOIA Rules, TIGTA Says
The Internal Revenue Service "generally followed" Freedom of Information Act protocols for redacting taxpayer information from October 2022 to March 2023 — a considerable improvement from past reports, the Treasury Inspector General for Tax Administration said Monday.
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April 12, 2024
Petition Watch: Judge DQs, 'Excessive' Damages & Price Wars
A former al-Qaida member has asked the U.S. Supreme Court to clarify disqualification protocol for judges overseeing a case related to their prior work as a government attorney, and energy drink manufacturers want the court to develop a modern-day test to determine if companies qualify as price-discrimination competitors. Here's four high court petitions filed recently that you might've missed.
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April 12, 2024
FedEx Not Entitled To $84.6M In Tax Credit Dispute, US Says
FedEx is not entitled to a judgment of nearly $84.6 million that the company requested in March for its foreign tax credit dispute, the federal government said Friday in a Tennessee federal court filing.
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April 12, 2024
4 Takeaways From Tax Court Nix Of Easement Perpetuity Rule
The U.S. Tax Court's scrapping of an IRS rule on the perpetuity requirements for conservation easements could draw yet more judicial scrutiny to the agency's rulemaking and shift the focus of easement disputes to how the transactions are valued. Here, Law360 examines four key takeaways from the decision.
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April 12, 2024
OECD Base Erosion Project Still Percolating, Think Tank Says
Policymakers should recognize that the Organization for Economic Cooperation and Development's tax project from roughly a decade ago to reduce base erosion and profit shifting may still be affecting companies' behavior, according to a publication released Friday from the fiscally conservative-leaning Tax Foundation.
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April 12, 2024
Woman Pleads Guilty To $1.3M COVID Tax Credit Fraud
A California woman pled guilty to fraudulently obtaining $2 million in COVID-19 government loans and falsely claiming $1.3 million in tax credits, crimes that could result in a 20-year prison sentence, the U.S. Department of Justice said.
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April 12, 2024
Final 'Look-Through' Rules Coming Soon, IRS Official Says
The IRS is about to release final regulations that would, in a manner of speaking, look through the corporate owners of real estate investment entities to determine whether they are domestically controlled, an agency official said Friday.
Expert Analysis
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Seeking IRS Accountability For Faulty Microcaptive Notice
Like the taxpayers in Standard Insurances v. U.S. seeking to expand earlier wins in microcaptive insurance cases that limit IRS use of improperly obtained information, others should consider ways to hold the agency accountable and provide incentive for it to follow the law going forward, says Joshua Smeltzer at Gray Reed.
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Biden Admin. Proposals Both Encourage And Thwart EV Adoption
While the Biden administration has been aggressively focused on promoting electric vehicles from the start, its recently issued guidance on EV tax credits and its restrictive new auto emissions proposal create a sense of implementation whiplash that may frustrate manufacturers and consumers, says Levi McAllister at Morgan Lewis.
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Heed PCAOB's Warning On Proof-Of-Reserves Reports
While directed at investors, the Public Company Accounting Oversight Board's recent advisory on proof-of-reserves reports is a timely and stark warning to crypto entities, as well as their customers and accounting firms, to tread carefully in their reliance on these reports as proof of financial stability, say Patrick Bryan and Deborah Meshulam at DLA Piper.
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Cos. Should Heed IRS Warnings About Employee Tax Credit
The IRS has recently been cautioning employers claiming the pandemic-related employee retention credit to carefully review all the eligibility requirements and be wary of relying on third-party advisers regarding their qualification for the credit, say Eric Pearson and Timothy Voigtman at Foley & Lardner.
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Renewable Energy M&A Is Still Strong, Despite Challenges
The recent history of renewable energy has included ongoing supply chain issues, legislative challenges and rising interest rates — but mergers and acquisitions in the sector are expected to remain robust this year, fueled by growing demand and Inflation Reduction Act incentives, say consultants at FTI Consulting.
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Issues And Opportunities In Hydrogen Fuel Cell Development
A variety of tax incentives, funding opportunities and state programs have the potential to provide value across the hydrogen fuel cell business chain and alleviate existing hurdles, establishing a stronger business case for the continued development of hydrogen infrastructure, says Pamela Wu at Morgan Lewis.
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IRS Green Energy Tax Credit Notice Provides Needed Clarity
Recent IRS guidance clarifying how the government will determine energy community locations for purposes of bonus clean energy tax credits should help resolve risk allocation disagreements among financing parties and parties to merger and acquisition transactions, say Casey August and Paul Gordon at Morgan Lewis.
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SVB Collapse Highlights Ch. 11 Issues With Bank Holding Cos.
Amid recent banking turmoil, including Silicon Valley Bank's collapse and subsequent Chapter 11 filing of its parent company, distressed debt investors and board members must understand the distinct rules in bank holding company bankruptcies, including Bankruptcy Code provisions granting significant advantages to federal regulatory agencies like the FDIC, say attorneys at Skadden.
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9th Circ. Ruling Legitimizes Classwide Injury In Predominance
The Ninth Circuit's recent ruling that vacated class certification in Van v. LLR makes clear that the question of injury is highly relevant to the predominance analysis, and underscores the importance of making a persuasive argument that injury is individualized within the class, say attorneys at Skadden.
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IRS' Cost Method Update Is Favorable For RE Developers
The Internal Revenue Service's recent update to its alternative cost method will allow real estate developers to accelerate their cost recovery of improvements in certain circumstances and make it easier for practitioners to satisfy the method's tax compliance requirements, says Benjamin Oklan at Weil.
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The Key Issues Keeping Transfer Pricing A Top Tax Concern
Several challenges preventing a global economic reemergence from the pandemic era are making practitioners reevaluate commonly used transfer pricing models, and embrace new technologies and ways of doing business, say Farnaz Amini and Sophia Castro Jurado at Marcum.
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Cannabis Cos. Must Heed Growing Federal Investigatory Risks
As state-regulated cannabis markets expand rapidly, so too does government oversight, and industry participants must plan ahead to avoid potential liabilities related to workplace health and safety requirements, tax audits, securities regulations and foreign bribery laws, say Alicia Corona and Amy Rubenstein at Dentons.
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5 Ways Taxpayers Can Spot Employee Retention Credit Scams
On Monday, the Internal Revenue Service added the employee retention credit to its list of prevalent tax scams because of ERC promoters seeking to take advantage of employers, but taxpayers who may qualify for the credit can protect themselves by recognizing certain red flags, say attorneys at Potomac Law and Stout Risius.