Federal
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February 17, 2023
Sanctioned Ex-Broker Says He's Entitled To His IRS Tax Docs
An ex-broker who was sanctioned by the Financial Industry Regulatory Authority for hiding $1.7 million in tax liens told a North Carolina federal court that the IRS violated federal laws by withholding records on its investigation into his promotion of potentially abusive tax shelters.
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February 17, 2023
IRS Properly Cut Power Provider Payments, Fed. Circ. Affirms
A group of public-sector power providers can't be compensated for the IRS' reduction of payments made to the utilities for interest they paid on bonds, as the Federal Circuit affirmed Friday that the agency didn't improperly decrease the payments for sequestration.
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February 17, 2023
DOD Sues For Soldier's Tax Records In PPP Loan Fraud Probe
The U.S. Department of Defense is seeking to enforce a subpoena for tax information of a business owned by a U.S. Army soldier under investigation for potentially unlawful use of Paycheck Protection Program loans, according to a petition filed in Colorado federal court.
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February 17, 2023
Treasury Unveils Book Tax Guidance For Insurance Firms
Large insurers can use accounting practices in line with existing financial statements to determine what they owe under the corporate alternative minimum tax that took effect this year, the U.S. Department of the Treasury said in guidance released Friday.
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February 17, 2023
IRS To Miss Deadline To Send Spending Plan To Yellen
The Internal Revenue Service apparently will miss Friday's deadline to submit a report to Treasury Secretary Janet Yellen on how it plans to use the nearly $80 billion funding increase that the Inflation Reduction Act provides, with the agency telling Law360 only that it will have the plan in the "coming weeks."
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February 17, 2023
Taxation With Representation: Gibson, Kirkland, Vinson
In this week's Taxation With Representation, Biotage is to acquire Astrea Bioseparations, Wyatt Technology is being sold to Waters Corp., and Vast Solar and Nabors Energy announced plans for a business combination that could result in Vast becoming a public company.
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February 17, 2023
IRS Seeks Comment On E-Filing Provider Handbook
The Internal Revenue Service asked for feedback Friday on the handbook for authorized IRS e-file providers.
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February 17, 2023
Weekly Internal Revenue Bulletin
The Internal Revenue Service released its weekly bulletin, which included a notice amending the definition of vehicles such as trucks and vans for the clean vehicle credit.
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February 16, 2023
FinCEN Blasted Over Beneficial Ownership Registry Plan
The U.S. Treasury Department's financial crimes unit has received a tidal wave of criticism on its proposed rule detailing access to so-called beneficial ownership information, including a strong rebuke from a major banking trade group that urged the unit to scrap the proposal altogether and replace it.
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February 16, 2023
Man Gets 8 Years In Prison For $8M Immigration Scheme
A partner in an employment-staffing scheme who admitted hiring undocumented workers in hotels and restaurants throughout Key West, Florida, cheating the government of nearly $8 million in employment taxes, was sentenced to eight years in prison Thursday by a Florida federal judge.
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February 16, 2023
IRS Properly Withheld 3rd-Party ID Records, Court Rules
The IRS properly withheld portions of internal guidance dealing with third-party identity confirmations from a retired Harvard law professor, as the redacted materials deal with law enforcement techniques, a Minnesota federal judge found Thursday after reviewing materials sought in a public records request.
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February 16, 2023
White House Urged To Dispute Canada's Foreign Owner Tax
Canada's new tax on underused real estate owned by foreigners is hurting Americans and should be on the agenda for President Joe Biden's March meeting with Prime Minister Justin Trudeau, a congressman told Secretary of State Antony Blinken.
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February 16, 2023
IRS Lets Taxpayers Submit Certain Docs Via Upload Tool
Taxpayers can securely upload documentation related to nine notices online through the Internal Revenue Service's document upload tool, the IRS announced Thursday.
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February 16, 2023
Clean Vehicle Credit Puts Foreign Joint Ventures In Limbo
Joint ventures with Chinese firms might be risky for automakers seeking to qualify their new clean energy vehicles for a restructured consumer tax credit unless the U.S. government writes flexible rules for new sourcing requirements.
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February 16, 2023
Proposed Conservation Easement Regs Overbroad, IRS Told
Land trusts, lawyers and other stakeholders have pushed back against a proposed IRS rule meant to crack down on potentially abusive syndicated conservation easement deals, saying in advance of a hearing next month that the proposal is overbroad and vague.
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February 16, 2023
Court Urged To Dismiss Challenge To IRS Benefits Notice
An Arizona federal court should reject a recruiting agency's bid to invalidate IRS guidance requiring the disclosure of certain potentially abusive employee benefit plans, the U.S. government said, arguing that a recent court decision setting aside the guidance doesn't have any bearing on the company's case.
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February 16, 2023
Senate GOP Bill Seeks Oversight Of IRS Funding Boost
Congress would be given a direct say in how the Inflation Reduction Act's nearly $80 billion funding boost for the Internal Revenue Service will be spent under legislation reintroduced in the Senate by Finance Committee Republicans, according to a statement released Thursday.
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February 16, 2023
IRS Seeks Input On Rules For Including Trusts In An Estate
The Internal Revenue Service asked Thursday for feedback on regulations that lay out how to elect to include some trusts in an estate.
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February 15, 2023
Executors Offer To Settle Canadian Estate's US Tax Case
The U.S. government and the estate of a Canadian woman have asked a Florida federal court to put their $500,000 tax case on hold so the U.S. government can evaluate a settlement offer from the estate.
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February 15, 2023
ABA Asks Treasury For Biz Info Disclosure Protections
Treasury should issue guidance that would apply protections currently used to safeguard tax return information to corporate ownership information that's required to be disclosed to the government under money laundering legislation, the American Bar Association's Tax Section said in comments.
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February 15, 2023
IRS Chief Nominee Commits To Improving Customer Service
President Joe Biden's pick for Internal Revenue Service commissioner vowed Wednesday to address the agency's lagging customer service and not to use Inflation Reduction Act funding for the IRS to increase audits on taxpayers making less than $400,000.
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February 15, 2023
Hiring Push Could Address Issues In IRS Appeals, Chief Says
The head of the Internal Revenue Service's Independent Office of Appeals told Law360 that he will make hiring a high priority in the 2023 fiscal year and increased staffing could address some concerns about the office's operations that were raised in a recent report.
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February 15, 2023
Man Owes More than $12,000, Tax Court Rules
A taxpayer who sued the IRS over deficiency notices going back to 2013 must pay more than $12,000, plus penalties and additions, after his trial in Tampa, Florida, the U.S. Tax Court said Wednesday.
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February 15, 2023
Tax Court Seeks New Arguments In Coke's $3.3B Dispute
The U.S. Tax Court has asked Coca-Cola Co. and the IRS for briefs examining how Brazilian legal restrictions on royalty payments should be considered in the company's $3.3 billion transfer pricing dispute following the court's ruling in a profit-reallocation case involving 3M.
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February 15, 2023
Clarity Needed In Proposed Foreign Tax Credit Rules, IRS Told
The Internal Revenue Service should clarify the requirements to qualify for a proposed exception to foreign tax credit regulations that would otherwise deny credits for certain offshore withholding taxes on royalty payments, practitioners said Wednesday during an agency hearing.
Expert Analysis
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Justices Open The Door Wider For Donor Info Law Challenges
The U.S. Supreme Court’s recent decision in Americans for Prosperity Foundation v. Bonta, striking down California's requirement that charities disclose the identity of major donors, will make similar state and federal statutes more vulnerable to constitutional challenge, says Lloyd Mayer at Notre Dame Law School.
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IRS Extension Is Partial Relief For Renewable Energy Projects
The Internal Revenue Service’s recent extension of the start-of-construction safe harbor for renewable-energy projects is welcome relief for solar companies unable to benefit from previous extensions, but it is still unclear whether a project that exceeds the deemed continuity period qualifies for a tax credit if it cannot prove continuous work, says David Burton at Norton Rose.
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Justices Should Find California Donor Law Unconstitutional
The U.S. Supreme Court's decision in Americans for Prosperity Foundation v. Bonta should strike down a California law requiring charities to disclose their donors because the state’s interest in this information is not sufficiently compelling to overcome constitutional rights to free speech and peaceful assembly, says James Skyles at Skyles Law Group and M2M Legal.
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US Must Boost Solar Industry To Protect Human Rights, Jobs
Recent revelations that many solar panels are made using polysilicon from the Xinjiang province of China, allegedly the site of mass forced labor and other abuses, make it all the more urgent that Congress and the Biden administration enact policies that promote American solar manufacturing in place of dumped and artificially cheap Chinese products, says Tim Brightbill at Wiley Rein.
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What Crypto Holders Can Learn From Early-2000s Tax Scandal
The Internal Revenue Service’s recent push to gather information about cryptocurrency accounts is similar to its Swiss bank account investigations of the early 2000s, which should prompt taxpayers to consider voluntarily disclosing transactions before they are individually targeted for enforcement, say Timothy Wagner and Thomas Barnard at Baker Donelson.
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Bipartisan Support Shows Bright Future For Carbon Capture
Recent policy proposals — from the Biden administration as well as members of Congress from both parties — promoting carbon capture, utilization and sequestration suggest that this technology has a key role to play in reducing carbon dioxide emissions, says Kevin Poloncarz at Covington.
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International Tax Reform's Implications For Transfer Pricing
As the Organization for Economic Cooperation and Development overhauls the global tax rules on base erosion and profit shifting, and the Biden administration rolls out new U.S. tax proposals, multinational enterprises need to prepare for the effects of these tax changes on their transfer pricing structures, say Mandy Li and Shuang Feng at MGO.
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Justices' Preemptive Tax Challenge Ruling Shows Divisions
The U.S. Supreme Court's recent decision in CIC Services v. Internal Revenue Service reveals divisions among the justices about when potentially burdensome tax regulations can be challenged, making the holding less clear and less valuable, say George Isaacson and David Swetnam-Burland at Brann & Isaacson.
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Takeaways From 2 New FBAR Rulings
In light of two recent California federal court decisions, capping penalties for nonwillful violations of foreign bank account reporting but broadening the willfulness standard, U.S. taxpayers must be vigilant about understanding their reporting obligations, and prepare for the Internal Revenue Service to target willful conduct, which yields much higher penalties, say Friedemann Thomma and Marianna Felshtiner at Venable.
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How Biden Tax Plans Would Boost Renewable Energy
The Biden administration's recently released revenue proposals for fiscal year 2022 include major enhancements and extensions to various green energy tax credits, and show that the administration is aligned with Congress in supporting renewable development, even if they differ on details, say attorneys at Eversheds Sutherland.
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What Tax Court's Mylan Legal Fee Ruling Means For IP Suits
The U.S. Tax Court's recent ruling that Mylan Inc. could deduct as regular business expenses the legal fees it incurred defending itself against patent infringement suits from brand-name drug manufacturers has the potential to increase patent litigation and may make settlement less appealing, say attorneys at Snell & Wilmer.
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Biden's Clean Energy Goals Require Big Hydrogen Push
To realize its ambitious renewable energy goals, the Biden administration, along with Congress, must promote the growth of the hydrogen industry using every available tool, including regulations, grants, tax incentives and direct purchases, say Abdon Rangel at Andersen Tax and John Taylor at King & Spalding.
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IRS Summons Ruling Isn't A Total Loss For Investors
A California federal court’s recent order allowing an IRS information summons on cryptocurrency exchange Kraken paradoxically provides hope for investors concerned about their privacy by limiting the scope of the agency’s inquiry, says Joshua Smeltzer at Gray Reed.