Federal
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April 23, 2024
Tax Court OKs IRS Notice After Petitioner Spews 'Gibberish'
The U.S. Tax Court ruled in favor of the Internal Revenue Service on Tuesday after a Nevada woman used "tax protester gibberish," the court said, in an attempt to circumvent more than $37,000 in unreported income.
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April 23, 2024
Biz Ownership Law Constitutional, Lawmakers Tell 11th Circ.
The Corporate Transparency Act is a garden-variety exercise of Congress' powers to address threats to national security, foreign affairs, commerce and tax collection, five Democratic lawmakers told the Eleventh Circuit, disputing a ruling that the law is unconstitutional.
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April 23, 2024
DC Circ. Backs Tax Penalties Against Swiss Couple
A Swiss couple who incurred $500,000 in penalties for failing to report millions of dollars they held in Swiss bank accounts can't get out of paying, the D.C. Circuit ruled Tuesday, rejecting their argument that the IRS didn't properly approve the fines.
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April 23, 2024
Int'l Pricing Pact Guidance Is Coming Soon, IRS Official Says
Updated Internal Revenue Service guidance that would help multinational corporations pursue advance pricing agreements will likely be released in a few months, an agency official said Tuesday.
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April 23, 2024
Migrant-Hiring Crimes And Tax Evasion Get Pair Prison, $1.8M Fine
A Florida federal judge has ordered two men to pay $1.8 million to the U.S. government and sentenced them to three years in prison after they confessed to recruiting migrants without employment authorization and failing to report workers' wages for tax purposes.
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April 23, 2024
Tomato Cos. Ask 9th Circ. To Allow Immediate Cost Deduction
Two companies that supply 40% of U.S. tomato paste and diced tomatoes asked the Ninth Circuit to allow deduction of their facilities' restoration costs during the tax year in which the tomatoes are processed, even though the companies don't pay the restoration costs until later.
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April 23, 2024
Atty Can Deduct $303K In Racing Ad Costs, 10th Circ. Told
A Colorado attorney asked the Tenth Circuit to reverse a U.S. Tax Court decision that prevented him from deducting $303,000 in advertising expenses tied to his automobile racing, saying the lower court incorrectly ruled that the costs were related to a hobby rather than his litigation practice.
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April 23, 2024
Feds Want About 3 Years In Prison For LA Bank Embezzler
The former chief financial officer at a community bank in Los Angeles should spend nearly three years in prison after admitting he embezzled more than $700,000 and used employee identities in a life insurance scheme, the government told a California federal court.
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April 23, 2024
Indicted 'Magician' Tax Preparer's Clients Under Scrutiny
Clients of a New York City-based tax preparer who earned the nickname "the magician," allegedly making $15 million while fraudulently depriving the IRS of $100 million, may also face charges, a prosecutor told the federal judge in charge of the case on Tuesday.
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April 23, 2024
IRS Opens Low Income Clinic Grant Period For 2025
The Internal Revenue Service has begun accepting applications from Low Income Taxpayer Clinics for matching funds in 2025, the agency announced Tuesday.
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April 23, 2024
DOL's Final Investment Advice Regs Expand ERISA's Reach
The U.S. Department of Labor issued final regulations Tuesday broadening who qualifies as a fiduciary under the Employee Retirement Income Security Act, backing off some changes included in a proposal the agency released in October.
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April 22, 2024
Hedge Funder's IRS Suit Over Leaked Tax Info Gets Trimmed
A Florida federal judge on Monday dismissed part of a hedge fund executive's case seeking to hold the Internal Revenue Service accountable for a leak of his private tax data to the media, saying he failed to show he suffered any damages.
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April 22, 2024
Congress Can Enact Corp. Transparency, Orgs Tell 11th Circ.
Congress is empowered to require American companies to report their beneficial owners to the federal government because there is ample evidence they've previously been used to fund hostile foreign actors, evade sanctions and traffic drugs, two think tanks told the Eleventh Circuit in an amici brief.
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April 22, 2024
Partnership Can't Claim $22.7M Loss, Tax Court Says
The U.S. Tax Court on Monday upheld the IRS' decision to deny a $22.7 million loss deduction claimed by a Connecticut partnership, finding that underlying transactions involving a bankrupt Brazilian company's debt obligations amounted to a disguised property sale.
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April 22, 2024
Fla. Man Fined After Failing To Report 11 Years Of Income
A Florida man is liable for penalties after failing to report approximately $7 million in income across 11 tax years, the U.S. Tax Court ruled Monday.
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April 22, 2024
Ga. Teacher Frivolously Disputed Deficiency, Tax Court Says
A Georgia man is required to pay a $15,000 penalty for maintaining a frivolous position in his challenge of an income tax deficiency, the U.S. Tax Court ruled Monday.
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April 22, 2024
IRS Failed To Act After Supervisor Groped Worker, Court Told
An IRS employee told an Iowa federal court Monday that her supervisor groped her and made a sexually degrading comment about her during a meeting but that the agency "has done nothing" to protect her, despite an investigation concluding the harassment had likely occurred.
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April 22, 2024
Va. Man Too Late, On Hook For $86K, Tax Court Rules
A Virginia man petitioned the U.S. Tax Court too late to contest his $86,000 liability, the court ruled Monday as it backed the Internal Revenue Service in the dispute.
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April 22, 2024
Conn. Couple Appealing $2.9M Tax Bill To 2nd Circ.
A Connecticut couple ordered to pay $2.9 million in back taxes, interest and penalties are asking the Second Circuit to reconsider the determination.
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April 22, 2024
Ex-US Atty's Stepson Says He Has None Of Docs Gov't Seeks
The stepson of a former Nevada U.S. attorney convicted of failing to pay taxes told a Nevada federal court that he doesn't have the financial documents the federal government has demanded in its $1.3 million tax suit against his stepfather.
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April 22, 2024
Chamberlain Hrdlicka Picks Firm Veteran As San Antonio Head
Chamberlain Hrdlicka White Williams & Aughtry announced Monday that it had tapped a shareholder with more than a decade at the tax-focused firm to helm its growing San Antonio location in the Lone Star State.
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April 22, 2024
Senate Bill Would Clarify IRS Process For Math Corrections
A bill introduced Monday in the U.S. Senate would clarify the process in which the Internal Revenue Service corrects math errors in tax returns.
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April 19, 2024
PE Exec Can Recoup $1M 'Varsity Blues' Forfeiture
A private equity executive whose conviction in the "Varsity Blues" college admissions case was almost entirely wiped out by the First Circuit is entitled to a refund of $1 million he paid to the scheme's ringleader, a federal judge ruled Friday.
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April 19, 2024
Utah Charity Leader Gets Year In Prison For $1.3M Tax Evasion
The former head of a Utah charity was sentenced to a year and a day in prison for evading taxes on $1.3 million he was paid as part of a covert arrangement with a purported donor, according to documents filed in a Utah federal court.
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April 19, 2024
IRS Previews New Digital Assets Reporting Form
The Internal Revenue Service released a draft of a form brokers will have to use for the first time to disclose their digital asset sales to the agency, including instructions for taxpayers whose transactions are subject to the reporting requirements.
Expert Analysis
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Justices Poised To Reject Narrowing Unclaimed Property Law
After U.S. Supreme Court oral arguments in the so-called MoneyGram case — a dispute between Delaware and several other states over which has the right to about $300 million in unclaimed property — the court seems ready to rule against Delaware, but nuances of the court's reasoning will have a broader sweep, say attorneys at Alston & Bird.
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How High Court Could Change FBAR Penalty Landscape
On Wednesday, the U.S. Supreme Court will hear Bittner v. U.S., a case that will affect many people penalized for failing to file a Report of Foreign Bank and Financial Accounts, and there are important procedural implications should the government's position be reversed, say Reuben Muller and Andreas Apostolides at Cole Schotz.
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IRS Memo May Change IP Royalty Tax Prepayment Planning
A recent Internal Revenue Service advice memorandum finding a taxpayer was not permitted to prepay tax on contingent royalties after contributing intellectual property offshore is a noteworthy departure from earlier guidance that highlights potential differences between actual and deemed licenses, says William Skinner at Fenwick.
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What IRS Funding Increase Means For Taxpayers
The Internal Revenue Service will first use the influx of funding from the Inflation Reduction Act to address customer support and personnel issues, but with over half the money allocated to enforcement, corporations and high-net-worth individuals will face increased scrutiny, say Patrick McCann Jr. and Jasen Hanson at Chamberlain Hrdlicka.
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6 Tax Considerations For Life Sciences Collaboration Deals
Given recent IRS guidance and changes to certain tax rates and deductions, biotech and life sciences companies entering into collaboration agreements should assess several unique taxation issues affecting matters ranging from research and development expenditures to profit-sharing terms, say attorneys at Orrick and Andersen Tax.
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Rushed Multilateral Negotiations Caused Two-Pillar Tax Mess
Cracks appearing in the two pillars of the 2021 global tax plan stem from a multilateral tax policy process that rushed to issue rules without first resolving fundamental differences between countries or ensuring that the U.S., a key player, could implement them, says Jefferson VanderWolk at Squire Patton.
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Post-Litigation Refund Strategies To Defeat Class Certification
The Third Circuit's recent revival of the Duncan v. Governor of the Virgin Islands class action shows that defendants should strongly consider tendering refunds to class representatives — even after they file suit — to create a substantial obstacle to certification, say attorneys at Covington.
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Key Considerations For Seeking Relief From Double Taxation
Caroline Setliffe and E. Miller Williams at Eversheds Sutherland lay out the Organization for International Cooperation and Development’s mutual agreement procedure for settling double-taxation disputes, and discuss six factors U.S. taxpayers doing business in multiple countries should consider when determining the most advantageous form of relief.
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High Court Could Resolve Thorny Atty-Client Privilege Issue
The U.S. Supreme Court recently granted review in a federal grand jury proceeding that presents a rare opportunity to clarify — and possibly significantly expand — the scope of the attorney-client privilege for complex mixed-purpose communications with counsel, says David Greenwald at Jenner & Block.
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2 Tax Decisions Hold Key Transfer Pricing Takeaways
Richard Slowinski and Stefanie Kavanagh at Alston & Bird discuss two recent decisions in cases against the IRS — Eaton Corp. from the Sixth Circuit and Medtronic from the Tax Court — that may help clarify when the agency can cancel an advance pricing agreement, but leave unanswered questions about which pricing method applies to high-value intercompany licensing transactions.
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Patagonia's Succession Plan Is A Blueprint For Biz Owners
While not every business owner is interested in giving their company away to a charitable purpose like Patagonia's founder recently did, the outdoor apparel company's unique situation highlights the considerations that should go into any succession plan, says Abosede Odunsi at Freeborn & Peters.
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The CHIPS Act: Key Takeaways For Semiconductor Industry
The Biden administration’s recently signed CHIPS Act signals that the U.S. is making progress toward bolstering the domestic semiconductor industry, and manufacturers must prepare by understanding the requirements of the act and associated Department of Commerce guidance, say attorneys at Miller & Chevalier.
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Digital Taxation Is Necessary, But Tough To Manage
The U.S. government has started to tackle complex new tax laws as the digital economy continues to grow, but this demands guidelines that will facilitate the growth while protecting investors and the government's finances, say attorneys at Cadwalader.