Federal
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April 10, 2024
8th Circ. Skeptical Of Bid To Reveal IRS Fraud Detection Docs
Eighth Circuit judges seemed skeptical Wednesday of a retired Harvard law professor's efforts to force the IRS to reveal its techniques for questioning fraud suspects, as two of three judges on a panel highlighted the potential to prevent identity theft by keeping the techniques hidden.
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April 10, 2024
Pension Plan Segment Rates Increase In April
Segment rates for calculating pension plan funding rose in April, the Internal Revenue Service said Wednesday.
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April 10, 2024
Family's $25M Settlement Is Income, Tax Court Says
A $25 million settlement received by a family was not tied to personal injury damages, making it taxable, the U.S. Tax Court ruled Wednesday.
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April 10, 2024
Fla. Atty Gets 8 Years For Fraudulent Tax Shelter Scheme
A Florida attorney was sentenced Wednesday to eight years in prison after pleading guilty in federal court to tax evasion and defrauding the U.S. government through a tax shelter scheme he pitched to clients that involved making purported charitable contributions so his clients could claim millions of dollars in tax deductions they weren't qualified to receive.
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April 10, 2024
IRS' DOJ Referral Rules 'A Disaster,' Sen. Whitehouse Says
The IRS protocols for referring cases to the U.S. Department of Justice are "a disaster" for enforcing laws against bankers and other actors who help U.S. taxpayers evade taxes, Sen. Sheldon Whitehouse said Wednesday during a hearing on offshore tax evasion before the Senate Budget Committee.
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April 10, 2024
Feds Cleared To Use Undercover Recording In Atty's Tax Trial
Federal prosecutors trying an attorney next week on charges he orchestrated a tax fraud scheme that spanned seven states will be allowed to play for the jury an audio recording made by an undercover agent, a North Carolina federal judge ruled.
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April 10, 2024
IRS Floats Alternative For Hydrogen Credit Emissions Value
The Internal Revenue Service released guidance Wednesday that would allow hydrogen producers to pursue another method to value their emissions output — which is critical in qualifying for the clean hydrogen production tax credit — if they can't get the information using the Argonne National Laboratory model.
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April 10, 2024
Senate Finance Panel Schedules Hearing On IRS Budget
The Senate Finance Committee will convene next week to discuss the Internal Revenue Service's budget for 2025, the committee said Wednesday.
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April 10, 2024
IRS Fixes Heading For Apprenticeship Credits, Deductions
The Internal Revenue Service issued a correction notice Wednesday to fix a heading related to increased tax relief for meeting certain wage and apprenticeship requirements.
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April 10, 2024
Ex-Trump Finance Chief Weisselberg Jailed For Perjury
A New York state judge on Wednesday sentenced former Trump Organization Chief Financial Officer Allen Weisselberg to five months in jail for lying under oath in the attorney general's civil fraud case against Donald Trump and his business associates, imprisoning a close ally of the former president on the eve of his hush-money trial.
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April 09, 2024
Treasury Proposes Long-Awaited Stock Buyback Tax Rules
The U.S. Treasury Department proposed a pair of long-awaited rules Tuesday that detail the calculation and reporting of a new excise tax assessed to publicly traded corporations that recently bought back their own shares of stock on the open market.
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April 09, 2024
Healthcare Co. Can't Sue Ex-Exec For Causing Canada Tax Hit
A Colorado federal judge shot down a pharmacy automation company's suit alleging its former chief commercial officer cost it nearly CA$1.2 million ($907,000) in Canadian taxes by not telling his employer he had moved out of the country, saying the company hasn't shown it suffered any damage as a result.
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April 09, 2024
10th Circ. Won't Allow Church To Skirt IRS Summons
The Tenth Circuit rejected a Kansas church's request to quash an Internal Revenue Service's third-party summons into the organization's bank records because the church does not hold the financial information and therefore is not subject to church tax inquiry restrictions, according to an opinion released Tuesday.
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April 09, 2024
Man's Unusual Filing Methods Led To Liability, 4th Circ. Told
The Fourth Circuit should uphold a U.S. Tax Court decision allowing the IRS to collect the tax liability of a technology consultant who for years used unusual filing methods, the government argued Tuesday, saying the court correctly noted he contributed to any confusion over his bill.
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April 09, 2024
Tax Court Rejects Pa. Man's Worked-For-Free Claim
A Pennsylvania man who claimed he worked for free is liable to pay more than $15,000 in unpaid income taxes, according to a ruling transcript published Tuesday by the U.S. Tax Court.
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April 09, 2024
Fund Managers Want Ga. Attys' Tax Shelter Fraud Suit Tossed
A fund manager accused of misleading investors into an illegal tax shelter want a Georgia federal court to throw out the proposed class action against them, claiming the facts alleged in an updated complaint still aren't specific enough for court.
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April 08, 2024
Tax Court Upholds $11M In Foreign Reporting Penalties
The U.S. Tax Court on Monday mostly upheld $11 million in foreign reporting penalties against a man who admitted he hid money overseas, but the court declined to overturn its ruling that the IRS lacks authority to assess certain foreign reporting penalties.
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April 08, 2024
Tax Court OKs Accuracy Penalties After 11th Circ. Reversal
A Florida man found to owe more than $9 million in taxes is liable to pay accuracy-related penalties, the U.S. Tax Court ruled Monday, after the Eleventh Circuit reversed a previous decision shielding him from the fines.
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April 08, 2024
CPAs Want Treasury To Delay Beneficial Ownership Registry
The U.S. Department of the Treasury should delay enforcement of beneficial ownership information reporting requirements while courts hear cases challenging the Corporate Transparency Act, the American Institute of Certified Public Accountants and 54 state CPA societies said.
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April 08, 2024
IRS Aptly Denied Man's Payment Proposal, Tax Court Says
The U.S. Tax Court sided with the Internal Revenue Service on Monday in finding there had been no abuse of discretion when the agency rejected a "partial pay" installment agreement from a Pennsylvania man.
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April 08, 2024
Tax Court Declines To Stop Clock For Woman's Petition
A Virginia woman who failed to timely dispute a collection action could not prove she was entitled to equitable tolling, the U.S. Tax Court ruled Monday.
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April 08, 2024
Ex-IRS Criminal Investigations Head Joins Crypto Data Firm
A newly retired chief of the Internal Revenue Service's law enforcement arm is taking his skills to blockchain analytics firm Chainalysis, where he'll help federal agencies and crypto firms leverage Chainalysis' data and solutions to combat financial crime.
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April 08, 2024
FTC Defends In-House Judges' Role In H&R Block Case
H&R Block wrongly claimed that the Federal Trade Commission's administrative law judges should be disqualified from overseeing an administrative proceeding accusing the tax preparation company of deceptive advertising, FTC lawyers told the agency, arguing the judges don't have illegal job protections.
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April 08, 2024
Mo. Atty Loses Last-Ditch Bid To Dodge NC Tax Fraud Trial
A St. Louis attorney lost a last-minute attempt to escape his upcoming tax fraud trial based on claims that the prosecution was never properly authorized, with a North Carolina federal judge finding that the government did mislead the court but nonetheless had the right stamp of approval.
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April 08, 2024
Jackson Hewitt Preparers Want First OK On $10.8M Deal
Former Jackson Hewitt Inc. workers have reached a $10.8 million settlement with their former employer over claims the company's franchisees entered into an anti-competitive no-poach agreement despite the provision being removed from the company's franchise agreements, according to a Friday motion.
Expert Analysis
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Kentucky Tax Talk: Taking Up The Dormant Commerce Clause
Attorneys at Frost Brown examine whether the U.S. Supreme Court is likely to review Foresight Coal Sales v. Kent Chandler to consider whether a Kentucky utility rate law discriminates against interstate commerce, and how the decision may affect dormant commerce clause jurisprudence.
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Prevailing Wage Rules Complicate Inflation Act Tax Incentives
Nicole Elliott and Timothy Taylor at Holland & Knight discuss the intersection between tax and labor newly created by the Inflation Reduction Act, and focus on aspects of recent U.S. Department of Labor and U.S. Department of the Treasury rules that may catch tax-incentive seekers off guard.
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Payroll Tax Evasion Notice Suggests FinCEN's New Focus
The Financial Crimes Enforcement Network’s recent notice advising U.S. financial institutions to report payroll tax evasion and workers' compensation schemes in the construction industry suggests a growing interest in tax enforcement and IRS collaboration, as well as increased scrutiny in the construction sector, say Andrew Weiner and Jay Nanavati at Kostelanetz.
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How Taxpayers Can Prep As Justices Weigh Repatriation Tax
The U.S. Supreme Court might strike down the 2017 federal tax overhaul's corporate repatriation tax in Moore v. U.S., so taxpayers should file protective tax refund claims before the case is decided and repatriate previously taxed earnings that could become entangled in dubious potential Section 965 refunds, say Jenny Austin and Gary Wilcox at Mayer Brown.
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IRS Foreign Tax Credit Pause Is Welcome Course Correction
A recent IRS notice temporarily suspending application of 2022 foreign tax credit regulations provides wanted relief for the many U.S. multinational companies and other taxpayers that otherwise face the risk of significant double taxation in their international operations, say attorneys at Mayer Brown.
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If Justices End Chevron Deference, Auer Could Be Next Target
If the U.S. Supreme Court decides next term to overrule its Chevron v. NRDC decision, it may open the door for a similar review of the Auer deference — the principle that a government agency can interpret, through application, ambiguous agency regulations, says Sohan Dasgupta at Taft Stettinius.
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Tax Court Ruling Provides Helpful Profits Interest Guidance
A recent U.S. Tax Court decision holding that a partnership may exclude interests in a company that it indirectly received sheds light on related IRS guidance, including the proper valuation method for such interests, though the court's application of the method to the facts of this case appears flawed, say attorneys at Kramer Levin.
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Mallory Ruling Doesn't Undermine NC Sales Tax Holding
Contrary to the conclusion reached in a recent Law360 guest article, the U.S. Supreme Court’s recent Mallory ruling shouldn't be read as implicitly repudiating the North Carolina Supreme Court’s sales tax ruling in Quad Graphics v. North Carolina Department of Revenue — the U.S. Supreme Court could have rejected Quad by directly overturning it, says Jonathan Entin at Case Western Reserve.
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IRS Criminal Probe Spells Uncertainty For Malta Pension Plans
The IRS’ recent scrutiny of Malta pension plan arrangements — and its unusual issuance of criminal administrative summonses — confirms that it views many of these plans as illegal tax evasion schemes, and the road ahead will not be smooth and steady for anyone involved, say attorneys at Kostelanetz.
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IRS Announcement Will Aid Cos. In Buyback Tax Planning
Recent IRS transitional guidance regarding current requirements for reporting and payment of the stock repurchase excise tax will help corporate taxpayers make decisions about records retention and establishing reserves for future tax payments, say Xenia Garofalo and Kyle Colonna at Eversheds Sutherland.
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Mallory Opinion Implicitly Overturned NC Sales Tax Ruling
The U.S. Supreme Court recently declined to review Quad Graphics v. North Carolina Department of Revenue, but importantly kicked the legs from under Quad's outcome a week later, stating in its Mallory decision that the high court has the prerogative to overrule its own decisions, says Richard Pomp at the University of Connecticut.
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How NIL Collectives Could Be Tax-Exempt After IRS Curveball
Since the Internal Revenue Service recently announced that numerous collectives creating paid name, image and likeness deals for collegiate student-athletes do not qualify for tax exemption, for-profit entities and alternative collective structures with incidental student-athlete benefits may be considered to fund NIL ventures, says David Kaufman at Thompson Coburn.
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Is This Pastime A Side-Gig? Or Is It A Hobby?
The recent U.S. Tax Court decision in Sherman v. Commissioner offers important reminders for taxpayers about the documentation and business practices needed to successfully argue that expenses can be deducted as losses from nonhobby income, says Bryan Camp at Texas Tech.