Federal
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February 29, 2024
Biz Owner's $2.4M FBAR Dispute Paused For Mediation
The U.S. government and a retired plumbing business owner mutually agreed to a 90-day stay of their $2.4 million tax dispute over foreign bank account reporting while they try to mediate a solution, a Georgia federal judge said Thursday.
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February 29, 2024
IRS Funding Cuts Would Raise Deficit $24B, CBO Says
A congressional agreement to rescind $20 billion in appropriated funding for the Internal Revenue Service this year would add $24 billion to the federal deficit through the next 10 years, according to Congressional Budget Office projections published Thursday.
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February 29, 2024
Ga. Man Convicted In $11M PPP Fraud Case Wants New Trial
An Atlanta man convicted on dozens of charges stemming from an $11 million pandemic loan fraud scheme has asked a Georgia federal judge for a new trial.
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February 29, 2024
IRS Amends Treatment Of Public Utility Debt
The Internal Revenue Service will not define certain public utilities as not recognizing gross income until the public utility receives the proceeds of a debt issued by the qualifying state financing entity, the agency said Thursday.
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February 29, 2024
NJ Towns Can't Sue Netflix, Hulu For Fees, 3rd Circ. Says
Two New Jersey municipalities cannot sue Netflix and Hulu for franchise fees under the state's Cable Television Act, the Third Circuit held Thursday in a precedential opinion, saying the state statute reserves enforcement of the law to the state Board of Public Utilities.
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February 29, 2024
IRS Enforcement Push Will Target 125K Wealthy Nonfilers
The Internal Revenue Service is ramping up enforcement against 125,000 high-income taxpayers who haven't filed returns since 2017 as a part of its ongoing efforts to increase tax compliance, the agency's chief told reporters Thursday.
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February 29, 2024
Senate Confirms First Woman To Top IRS Attorney Post
The U.S. Senate on Thursday confirmed a former director at EY who previously served as associate chief counsel, international, at the Internal Revenue Service to be the agency's chief counsel, making her the first woman to be confirmed for the role.
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February 29, 2024
Medtronic Says 3 Years Of Tax Returns Under IRS Audit
Three years of medical device company Medtronic's federal income tax returns are being audited by the Internal Revenue Service, the company said in a U.S. Securities and Exchange Commission filing.
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February 29, 2024
Bankrupt Endo To Pay $465M To Resolve Opioid Claims
Drugmaker Endo International has agreed to pay as much as $465 million to resolve criminal and civil claims stemming from its sale and marketing of a powerful opioid, and will turn over its assets to a group of secured lenders who will operate the company under a new corporate structure.
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February 28, 2024
Crapo Seeks Changes To Child Tax Credit Provisions In Bill
The top-ranking Republican on the Senate Finance Committee said Wednesday that he cannot support the bipartisan tax bill pending in the Senate as long as a provision that allows taxpayers to receive a refundable child tax credit based on their prior year's earnings is included.
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February 28, 2024
Amgen Seeks Dismissal Of Investor Action Over $11B Tax Bill
Amgen had no obligation to disclose specific amounts of proposed adjustments to its taxes, the company told a New York federal court as it again demanded dismissal of a proposed class action alleging the company hid a $10.7 billion tax bill from investors.
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February 28, 2024
Embattled Philly Loan Biz Principals Hit With RICO Charges
Legal troubles for the principals of Philadelphia's Par Funding cash advance company are mounting as federal prosecutors hit them with a new indictment adding Racketeer Influenced and Corrupt Organizations Act allegations on top of existing charges that the principals bilked investors out of hundreds of millions of dollars and threatened violence against borrowers.
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February 28, 2024
COVID Fraud Jury Can't Hear Of Gov't's Loan Error, Feds Say
A jury shouldn't be shown evidence of the U.S. government's error in approving a Michigan business owner's application for a Paycheck Protection Program loan while he was under indictment, federal prosecutors have argued.
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February 28, 2024
Timeline Rule For Assessing Tax Not Retroactive, Court Says
A former corporate executive who received a $26 million buyout and then rolled the proceeds over to a retirement account incorrectly claimed that an amended statute of limitations exempted him from paying a penalty, the U.S. Tax Court ruled Wednesday.
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February 28, 2024
GOP Reps. Press IRS On Backdating Forms In Easement Case
Two House Republican tax writers pressed the Internal Revenue Service for details on how it would prevent agency employees from inappropriately backdating official tax documents after the agency admitted last year to doing so in a high-profiled suit involving conservation easement penalty forms.
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February 28, 2024
Divorced Woman Can Get Spousal Relief, Tax Court Says
A divorced woman has satisfied the requirements for innocent spousal relief despite an attempt by her ex-husband to refute her claim, the U.S. Tax Court ruled Wednesday.
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February 28, 2024
IRS Delays Tax Deadlines After Wash. Wildfires
Certain taxpayers in Washington state will have extra time to file tax returns and make payments following wildfires last year, the Internal Revenue Service said Wednesday.
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February 28, 2024
Court Should Block IRS 'Fishing Expedition,' Company Says
A company that claims it has been the victim of an Internal Revenue Service "fishing expedition" after being hit with a raft of document requests urged a Georgia federal judge Tuesday to keep alive its bid to quash the summonses, telling the court the government overstepped its bounds in seeking "a wide variety of duplicative, irrelevant, and unrelated information."
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February 28, 2024
Stalled Pillar 1 Raises Specter Of EU Digital Tax
The stalling at the international level of a redistribution of taxing rights known as Pillar One is raising questions about whether the European Union would revive a digital tax, which it had put aside hoping Pillar One would succeed.
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February 28, 2024
IRS To Hold Hearing On Donor-Advised Fund Excise Tax Regs
The Internal Revenue Service will hold a public hearing in May on proposed regulations regarding excise taxes on certain taxable distributions made from donor-advised funds, the agency announced Wednesday.
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February 28, 2024
IRS Adds 36 Tax Court Sessions To Calendar
The Internal Revenue Service named calendar administrators for 36 U.S. Tax Court sessions in March, April and May on Wednesday, bringing the total number of upcoming sessions to 72.
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February 27, 2024
TaxAct Filers Ink $23M Deal Over Meta, Google Info Sharing
TaxAct Inc. customers have asked a California federal judge to greenlight a settlement they say is worth more than $23 million and would resolve class claims accusing the tax preparation company of secretly sharing confidential taxpayer information with Meta Platforms Inc. and Google.
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February 27, 2024
US Biz Group Urges Treasury Against Basis Denial Rule
The U.S. Treasury Department should rethink its proposed upcoming rule that would deny the basis that U.S. companies have in particular foreign affiliates involved in certain inbound transactions, the National Foreign Trade Council said in a letter made public Tuesday.
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February 27, 2024
IRS Opens Free E-File Pilot To More New Users
The Internal Revenue Service temporarily reopened its free electronic filing pilot program to more new users Tuesday in the 12 states where taxpayers can participate, an agency official said in a statement.
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February 27, 2024
IRS Hires 2 To Lead Digital Asset Efforts
The Internal Revenue Service hired two staffers to assist with forming the agency's approach to cryptocurrency and other digital assets, the agency announced Tuesday.
Expert Analysis
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Clean Hydrogen Developers Should Track Incentives, Risks
Clean hydrogen project developers and investors should be aware of new funding opportunities from the U.S. Department of Energy and tax benefits under the Inflation Reduction Act, but must also guard against risks associated with new and evolving technologies, say Pamela Wu and Kirstin Gibbs at Morgan Lewis.
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IRS Starts Clock On Energy Projects' Labor Rule Exemption
A U.S. Department of the Treasury notice published this week started the 60-day clock for clean energy projects seeking to be grandfathered from having to meet new labor requirements to qualify for enhanced tax credits, and uncertainty about how the provisions will apply should be incentive for some investors to begin construction soon, say attorneys at Eversheds Sutherland.
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Foreign Tax Credit Proposal Is Some Help, But More Is Needed
New foreign tax credit regulations proposed by the U.S. Treasury Department provided some measure of relief on cost recovery and royalty withholding, two of the most troublesome aspects of the 2021 final foreign tax credit regulations, but the final regulations are still harmful to many taxpayers, making litigation inevitable, say attorneys at Fenwick.
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Anticipating The New Congress' Private Sector Investigations
With Republicans claiming a new majority in the House of Representatives in the upcoming Congress, corporates and individuals should expect a sea change in Congress' investigative priorities and areas of focus — and private sector entities can take prudential steps in the near term to best prepare for and mitigate risk, say attorneys at Latham.
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Tax Equity Requires Reinstating The Home Office Deduction
Congress should restore the home office deduction for W-2 workers in the interest of tax equity because permanently remote workers now bear the cost of creating quiet, dedicated work spaces, a pandemic-related shift unforeseen when the deduction was eliminated by 2017's Tax Cuts and Jobs Act, say James Mahon and Samantha Lesser at Becker.
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Keys To IRA Tax Breaks For US Green Energy, EV Production
The Inflation Reduction Act includes three powerful tax incentives for domestic production of renewable energy projects and electric vehicles — but there are key questions that investors and manufacturers must ask when evaluating whether they can take advantage of these incentives, say attorneys at Troutman Pepper.
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Crypto Case Failed To Clarify Taxation Of Staking Rewards
A Tennessee federal court's recent dismissal of Jarrett v. U.S. — after the IRS issued a refund for taxes paid on cryptocurrency and mooted a greater question about the tax treatment of staking rewards — leaves the crypto industry in need of guidance on the IRS’ position, say attorneys at Cadwalader.
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How The IRS May Define 'Clean Hydrogen'
The Internal Revenue Service is still taking comments on how to define "clean hydrogen" for purposes of Inflation Reduction Act tax credits, but developers can look to the IRA's legislative history — as well as the European Union's struggle to define "green hydrogen" — as guideposts, says Ben Reiter at Nixon Peabody.
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What To Expect From The Post-Midterms Lame-Duck Session
Depending on the results of the midterm elections, the upcoming lame-duck session may be the last chance for Congress to enact meaningful legislation for the next several years, so organizations must push through legislative priorities now, lest they are forced to restart their efforts in a much different environment next year, says James Brandell at Dykema.
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IRS' Tax Gap Statistics Don't Paint A Full Compliance Picture
The Internal Revenue Service's recent report indicating a widening tax gap sheds important light on tax compliance, underlines key pressure points and provides insights into how tax administration could be improved; but tax gap estimates also have their limits, says Joyce Beebe at Rice University.
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Labor Rules Will Unlock IRA Tax Credits' Full Value
Companies that make sure to follow the Inflation Reduction Act's unique labor rules will be in the best position to unlock the law's tremendous tax incentives aimed at promoting renewable energy, lowering greenhouse gas emissions and encouraging carbon sequestration, say Nicole Elliott and Timothy Taylor at Holland & Knight.
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Making The Most Of New Tax Credits For EV Charging Stations
The Inflation Reduction Act recently extended, expanded and renewed the tax credits available for electric vehicle charging station projects — but developers must navigate new challenges, including geographic and prevailing wage requirements, to take full advantage of the updated credits, says James English at Clark Hill.
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Key Income Tax Issues Triggered By Remote Employees
A host of fact-specific tax determinations arise in connection with remote work arrangements, from defining working-condition fringe benefit exclusions to nexus-dependent state withholding obligations, complicating compliance for corporate tax counsel and human resources professionals, say Thomas Cryan and Spencer Walters at Ivins Phillips.