Federal
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January 23, 2023
Shop Owner Can't Take Mortgage Deduction, Tax Court Says
The co-owner of jewelry and auto shops cannot deduct mortgage interest of $66,000 for 2012 for Arizona condominiums he claimed to own with his brother because he didn't present evidence he owned the property, the U.S. Tax Court decided Monday.
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January 23, 2023
Floridian Urges Court To Deny Gov'ts $18M Repatriation Bid
A Floridian should be allowed to keep about $18 million overseas while the Eleventh Circuit weighs his appeal against the IRS' penalty calculation for undisclosed Swiss bank accounts, he told a Florida federal court, arguing against the U.S. government's repatriation bid.
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January 23, 2023
Appraisal Behind $1.6M Deduction Improper, Tax Court Says
The appraisal backing up a California couple's $1.6 million deduction for a donation of company units to a charity doesn't meet a statutory requirement for claiming charitable contribution deductions, the U.S. Tax Court said Monday.
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January 23, 2023
Court Dismisses Oil Co.'s $1.3B Tax Suit At Co.'s Request
A Texas federal court dismissed a $1.3 billion tax dispute at the request of the oil company that brought it after ExxonMobil lost a similar case in the Fifth Circuit last year.
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January 23, 2023
Tax Court Says Ex-Spouse's Fiscal Control Excuses Woman
The U.S. Tax Court decided Monday to grant a Californian partial relief from tax debt she incurred with her ex-husband, saying she was entitled to innocent spouse relief because he exerted control over their finances.
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January 23, 2023
Unions Urge Biden To Defy EU Threats On EV Tax Credit
Several unions and nonprofits have urged President Joe Biden to defy the European Union's threats over the Inflation Reduction Act's electric vehicle tax credit by strictly interpreting provisions favoring domestically sourced batteries.
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January 23, 2023
IRS Gives Intermediaries Another Month To Renew Agreements
Qualified intermediaries that want to renew their agreements for 2023 have until May, rather than April, to do so, the Internal Revenue Service said.
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January 23, 2023
Gorsuch Dissents Over Justices' Nix Of $3M FBAR Challenge
The U.S. Supreme Court declined Monday to review a Boston woman's challenge to $3 million in penalties for failing to report her Swiss bank account, but Justice Neil Gorsuch disagreed, saying the U.S. government may have violated the woman's constitutional protection against excessive fines.
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January 23, 2023
High Court Won't Take On Texas Atty's Tax Fraud Suit
The U.S. Supreme Court refused to hear a Texas attorney's fight to escape a conspiracy conviction connected to a client's $1.1 million in unpaid taxes despite his claims that the federal jury didn't receive instructions on how the Internal Revenue Service goes about collections, according to a denial issued Monday.
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January 23, 2023
Tax Group Of The Year: Mayer Brown
Mayer Brown LLP's successful appeal for Fidelity Investments in a closely watched $26 million tax credit dispute was one of several high-profile wins over the past year that earned the firm a spot among Law360's 2022 Tax Groups of the Year.
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January 23, 2023
High Court Drops Tax Law Firm's Privilege Case
The U.S. Supreme Court on Monday dismissed an unnamed law firm's bid for the court to adopt a broad approach in determining whether dual-purpose client communications containing both legal and nonlegal advice are protected under attorney-client privilege.
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January 20, 2023
New GOP House Rules Would Make Raising Taxes Harder
New rules from House Republicans that govern floor debate on tax bills, such as restricting measures that raise income tax rates or requiring more specific cost estimates, reflect new GOP priorities intended to clamp down on spending hikes, tax increases and IRS audits.
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January 20, 2023
11th Circ. Affirms Limit On State Tax Cuts Is Unconstitutional
Thirteen states challenging a provision barring them from using federal coronavirus relief funds to offset revenue reductions such as tax cuts have standing and are correct in claiming the provision is unconstitutional, the Eleventh Circuit said Friday, upholding a district court decision.
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January 20, 2023
Court Tosses Microcaptive Summons Suit After IRS Gets Docs
A Florida federal court dismissed a case Friday seeking to enforce an IRS request for documents from corporate officers for several insurance businesses relating to an agency investigation into microcaptive insurance arrangements after the individuals provided the requested records and emails.
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January 20, 2023
Nutrition Co. Drops $10M Accounting Negligence Suit
A Maryland federal judge approved the dismissal Friday of a nutritional supplements company's lawsuit against its former accounting firm, a complaint the company dropped after having accused the firm of bungling its taxes and causing it to overpay taxes to South Carolina by $10 million.
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January 20, 2023
Plumbing Co. Asks Court To Block IRS Microcaptive Notice
A 2016 IRS notice that requires the disclosure of microcaptive insurance arrangements to the agency should be invalidated because its implementation failed to follow the federal rulemaking process, the owner of a Utah-based plumbing company and several related entities told a federal court.
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January 20, 2023
Court Strikes IRS Benefit Guidance Over Admin. Law Violation
A Michigan federal judge invalidated IRS guidance that required the disclosure of certain potentially abusive employee benefit plans, saying that setting aside the guidance was justified given the Sixth Circuit's decision that found the agency hadn't complied with public comment requirements in issuing it.
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January 20, 2023
7th Circ. Judges Scrutinize $11M Tax Ruling In NBA Team Sale
Seventh Circuit judges questioned a U.S. Tax Court decision blocking a company's $10.6 million ordinary business deduction for the sale of the NBA's Memphis Grizzlies, saying reclassifying the break as a deferred compensation deduction risks eliminating the company's ability to ever claim it.
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January 20, 2023
Taxation With Representation: Slaughter and May, Shearman
In this week's Taxation With Representation, INEOS said it will buy MBCC Group's chemical admixtures business, Spectaire said it agreed to go public by merging with Perception Capital Corp. II, and Shell reached an agreement to acquire Volta.
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January 20, 2023
Tax Group Of The Year: Latham
Latham & Watkins LLP's tax practice guided medical records giant Cerner in its $28.3 billion acquisition by Oracle and helped secure a U.S. Supreme Court win in a law firm's day-late challenge to an Internal Revenue Service levy, exemplifying its strengths in both transactional tax and tax controversy, and earning it a spot on Law360's 2022 Tax Groups of the Year.
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January 20, 2023
IRS Seeks Comments On Split Interest Trust Reporting Form
The Internal Revenue Service said Friday that it is seeking comments on a form for reporting a split interest trust's financial activities.
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January 20, 2023
Weekly Internal Revenue Bulletin
The Internal Revenue Service released its weekly bulletin, which included proposed rules for the witnessing of spousal consent elections which allow it to be done remotely.
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January 19, 2023
11th Circ. Affirms 18 Years For Bank Fraud, False Tax Return
The Eleventh Circuit affirmed the reduced 18-year prison sentence of a man who claimed to be a Hindu priest and was convicted of dozens of crimes including filing a false tax return, saying Thursday that a lower court correctly followed its remand instructions.
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January 19, 2023
4th Circ. Says ACA Payment Is Tax For Bankruptcy Purposes
The Affordable Care Act's charge levied on people who lacked minimum health coverage counts as a tax that takes priority over other claims in the bankruptcy process, a split Fourth Circuit panel said Thursday, reversing a decision by a North Carolina federal court.
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January 19, 2023
Taiwan Continues To Press For Tax Treaty With US
The president of Taiwan reiterated the self-governing island's desire for a tax treaty with the U.S. at a meeting with U.S. lawmakers, according to her office.
Expert Analysis
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Inside The IRS' Final First-Year Depreciation Tax Regulations
Daniel Kiely and Minju Kim at Mayer Brown discuss key issues and clarifications associated with the Internal Revenue Service's recently finalized regulations allowing companies to deduct depreciable assets the year the business puts them in place.
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CFTC Climate Change Report Highlights Costs Of Inaction
The Commodity Futures Trading Commission's recent report on climate change and financial markets makes it clear that while government regulation of carbon dioxide pollution may have negative consequences, letting greenhouse gas emissions go unaddressed could harm investors, asset managers and financial institutions, says Nicholas Fox at Goldberg Segalla.
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Dems' Int'l Tax Policy Comes With Unintended Consequences
Former Vice President Joe Biden and Sen. Kamala Harris’ "Made in America" tax policy overstates the importance of revenue raising, which may encourage foreign ownership of global activity and disadvantage U.S.-based companies, says George Callas at Steptoe & Johnson.
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How Cos. Can Respond To Growing Crypto Tax Enforcement
As the U.S. Department of Justice and the Internal Revenue Service remain laser-focused on abusive cryptocurrency schemes, companies operating in this high-risk industry should review their compliance measures in areas such as data analysis, employee oversight and industry benchmarking, say attorneys at Norton Rose.
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Cos. Should Have To Notify Workers Of Whistleblower Rights
The U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, U.S. Department of Justice and Internal Revenue Service should require employment confidentiality and separation agreements to make clear workers may talk to the agencies and retain any whistleblower award without retaliation or approval, says Ezra Bronstein at Mehri & Skalet.
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What A Biden Win Could Mean For Employer Health Insurance
Eric Schillinger and Anne Hall at Hall Benefits discuss how a Biden administration's potential legislative and regulatory changes to employer-sponsored health insurance — such as expansion of the Affordable Care Act's nondiscrimination rules and withdrawal of the Trump administration's association health plan regulations — would impact employers.
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Trump's Tax Tactics May Be Criminal
Apologists who defend President Donald Trump as having shrewdly exploited legal loopholes by deducting dubious consulting fees from his taxes are ignoring major badges of fraud that would have led the Internal Revenue Service to investigate any other taxpayer, says Daren Firestone at Levy Firestone.
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A Tax Case Key To Justice Ginsburg's Equal Protection Fight
In the 1970 case Moritz v. Commissioner, future Justice Ruth Bader Ginsburg's legal reasoning that the Internal Revenue Code discriminated against a male taxpayer on the basis of sex provided the foundation for a lineage of constitutional jurisprudence, says Olivia Renensland at Kostelanetz & Fink.
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CARES Act Compliance Reminders For 401(k) Plans
Employers that used the Coronavirus Aid, Relief and Economic Security Act to offer 401(k) participants greater access to their savings should revisit compliance obligations for distribution rights, loan limit increases and repayment suspensions as the year-end approaches, says Timothy Collins at Duane Morris.
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Managing New IRS Global High-Wealth Audits
Global high-wealth individuals on the receiving end of an audit letter under the Internal Revenue Service Large Business and International Division's new program should prepare for a thorough examination process that includes their entire network of persons and affiliated entities, say attorneys at MoFo.
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COVID-19 Crisis May Make M&A Earnouts More Attractive
Earnouts are poised for a resurgence in the pandemic-churned M&A market, making it important to weigh the structure’s advantages as a way to close valuation gaps between buyers and sellers, as well as consider potential federal income tax disadvantages, say Efren Acosta and Ron Scharnberg at Baker Botts.
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IRS Notice Helps Unpack Part-Time Worker 401(k) Eligibility
As sponsors struggle to evaluate whether and how to include employer contributions when 401(k) plan eligibility is extended to long-term, part-time workers on Jan. 1, newly released IRS guidance may clarify some of the administrative burdens, say Anne Hall and Katharine Finley at Hall Benefits.
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Class Arbitration May Meet Its Demise At High Court This Term
While the Second Circuit’s 2019 opinion in Jock v. Sterling Jewelers and the Ninth Circuit’s recent decision in Shivkov v. Artex exemplify how two interrelated inquiries have rescued class arbitration, the U.S. Supreme Court will likely address the issues this term and extinguish the practice, say attorneys at McGuireWoods.