Federal
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June 18, 2024
Tax Court Admonishes CPA For 'Unbecoming' Tax Positions
A U.S. Tax Court judge warned a certified public accountant who challenged his $23,000 tax bill that his groundless arguments could cost him a fine, saying in an opinion Tuesday that his tax positions "are unbecoming of a CPA."
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June 18, 2024
Mere Mention Of Setbacks Can't Nix Penalties, Tax Court Says
A Washington man who said he couldn't pay his taxes because he struggled to recover from financial setbacks during the pandemic didn't provide proof of his hardships, the U.S. Tax Court said Tuesday in upholding the government's collection of penalties against him.
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June 18, 2024
IRS Drops Two Research Credit Refund Claim Requirements
Taxpayers submitting refund claims that include the research credit no longer need to furnish the names of people who conducted each research project or the information each person tried to find with claims postmarked as of Tuesday, the Internal Revenue Service announced.
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June 18, 2024
Former Tax Atty Hid Pension's $22.6M, Tax Court Says
A former attorney who promoted himself as an expert in employee stock ownership plans failed to report nearly $22.6 million in income related to his acquisition of a furniture company's overfunded pension plan, the U.S. Tax Court ruled.
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June 18, 2024
Life Insurance Fraudster Deserves Tax Penalties, 7th Circ. Told
The IRS urged the Seventh Circuit to maintain nearly $400,000 in fraud penalties assessed against an Illinois man who pled guilty to falsifying his tax returns as part of a scheme to poison his wife and collect on a $20 million life insurance policy.
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June 18, 2024
IRS Guidance Doesn't Perceive Spinoff Abuse, Official Says
Recent IRS guidance limiting the corporate spinoffs that revenue officials will approve as tax-free ahead of time was designed to reflect the drafters' current views, rather than suggest perceived abuse of these transactions, a U.S. Treasury Department official said Tuesday.
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June 18, 2024
AbbVie Says IRS Can't Treat $1.6B Break Fee As Capital Loss
The Internal Revenue Service cannot reclassify as a capital loss a $1.6 billion payment AbbVie made to an Irish biotechnology company after their failed merger and thereby raise the pharmaceutical giant's tax bill by $572 million, the company's attorneys told the U.S. Tax Court.
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June 18, 2024
Applicable Federal Interest Rates To Fall In July
Applicable federal rates for income tax purposes will decrease in July, the Internal Revenue Service said Tuesday, reporting the first month-to-month drop since February.
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June 18, 2024
Treasury Finalizes Labor Rules For Bonus Energy Tax Credits
The U.S. Treasury Department released final labor rules Tuesday for clean energy projects seeking to significantly boost the value of their tax credits, emphasizing due diligence by developers and announcing that more IRS resources will go toward enforcement of the rules.
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June 17, 2024
$2.1B Danish Tax Fraud Defendant Pushes For Separate Trials
An attorney facing trial alongside his clients on allegations of filing $2.1 billion in fraudulent tax refund claims in Denmark urged a New York federal court to hear his case separately, saying disparate legal arguments could confuse a jury if only one trial is held.
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June 17, 2024
IRS Asks Court To Leave Alone Worker Retention Credit Pause
An Arizona federal court should reject a tax advisory firm's request to lift the IRS' moratorium on processing claims for the pandemic-era employee retention credit, the agency argued, saying the agency should be allowed to continue to run the program as it sees fit.
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June 17, 2024
IRS Correctly Assessed Md. Man's Deficiency, Tax Court Says
There were no genuine disputes of facts with the Internal Revenue Service's determination that a Maryland man had failed to file a return reporting nearly $255,000 in gross income, leading to a tax deficiency of more than $61,000, the U.S. Tax Court ruled Monday.
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June 17, 2024
IRS Issues Corp. Bond Monthly Yield Curve Guidance
The Internal Revenue Service published guidance Monday on the corporate bond monthly yield curve used in calculations for defined benefit plans as well as corresponding segment rates and other related provisions.
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June 17, 2024
Treasury Says Partnership Crackdown Could Raise Over $50B
A regulatory project to stop large, complex partnerships from using murky business structures to boost deductions and dodge taxes, an effort launched Monday by the U.S. Department of the Treasury and the IRS, could ultimately raise over $50 billion in a decade, Treasury said.
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June 17, 2024
IRS Didn't Fully Solve All IT Issues, TIGTA Says
A review of planned corrective actions reported as closed by the Internal Revenue Service's information technology organization found one not fully implemented while another was not fully effective, the Treasury Inspector General for Tax Administration said Monday.
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June 17, 2024
Feds Take Hard Line On Tycoon's Pilots After He Goes Free
Manhattan federal prosecutors asked a sentencing judge to consider aggravating circumstances for two pilots who allegedly traded on stock tips from U.K. billionaire Joe Lewis, despite not seeking a prison term for the private equity honcho and former soccer club owner.
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June 17, 2024
House Bill Seeks Tax Credit For Med Student Supervisors
Some licensed medical professionals who supervise medical and nursing students during clinical rotations would be entitled to a $1,000 tax credit under a bipartisan bill introduced in the U.S. House.
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June 17, 2024
Marathon Ineligible For $247M Fuel Tax Refund, IRS Says
Energy giant Marathon Petroleum isn't entitled to $247 million in tax refunds for its alternative fuel mixtures because its eligibility for the credits hadn't yet been approved by the Internal Revenue Service when it made the refund request, the agency told an Ohio federal court.
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June 14, 2024
Ga. CPA Admits To Role In $1.3B Tax Fraud Scheme
After a federal jury convicted two of his co-conspirators in a landmark conservation easement tax shelter trial last year, a Georgia accountant who'd previously denied culpability elected to change course Friday and plead guilty to two felony charges.
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June 14, 2024
5th Circ. Says Jury Instructions Deeply 'Flawed' In Tax Suit
A Fifth Circuit panel has found that the jury instructions for a $580,000 tax dispute were "irredeemably flawed," vacating the verdict and handing a loss to a partnership that claimed it had reasonable cause for its tax filing problems due to an employee's mental health issues.
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June 14, 2024
US Urges 5th Circ. To Back $2M Tax Bill For Tire Imports
The Fifth Circuit should overturn a lower court's ruling that a Houston truck company was not an importer responsible for nearly $2 million in excise taxes on tires it bought from a Chinese manufacturer, the U.S. told the Fifth Circuit on Friday.
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June 14, 2024
Eaton Says Court Improperly Required Int'l Employee Evals
An Ohio federal court should reconsider its decision that multinational power management company Eaton must disclose the personnel records of its foreign employees that were requested by the Internal Revenue Service in a transfer pricing investigation, the company told the court.
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June 14, 2024
The Tax Angle: More GOP TCJA Teams, Nonprofit Hospitals
From a look at efforts by the Republicans on the Senate Finance Committee to prepare for next year's expiration of the 2017 tax overhaul law to a new call for nonprofit hospitals to provide more charity care, here's a peek into a reporter's notebook on a few of the week's developing tax stories.
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June 14, 2024
IRS Says Ariz. Lacks Standing To Fight Taxation Of Rebates
Arizona did not have standing to lodge its claim that its 2023 income tax rebates should be exempt from federal tax, the Internal Revenue Service told a federal court, arguing the taxes paid by Arizonans did not amount to harm to the state itself.
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June 14, 2024
Tax Preparer Blames Customers For Errors In $42.5M Dispute
A tax preparer who once worked for the IRS said the government wrongly accused him of underestimating clients' tax liabilities, telling a Washington federal court in response to allegations that he caused $42.5 million in tax losses that his customers had made the errors.
Expert Analysis
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To Make Your Legal Writing Clear, Emulate A Master Chef
To deliver clear and effective written advocacy, lawyers should follow the model of a fine dining chef — seasoning a foundation of pure facts with punchy descriptors, spicing it up with analogies, refining the recipe and trimming the fat — thus catering to a sophisticated audience of decision-makers, says Reuben Guttman at Guttman Buschner.
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Circuit Judge Writes An Opinion, AI Helps: What Now?
Last week's Eleventh Circuit opinion in Snell v. United Specialty Insurance, notable for a concurrence outlining the use of artificial intelligence to evaluate a term's common meaning, is hopefully the first step toward developing a coherent basis for the judiciary's generative AI use, says David Zaslowsky at Baker McKenzie.
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BF Borgers Clients Should Review Compliance, Liability
After the U.S. Securities and Exchange Commission's recently announced enforcement proceedings against audit firm BF Borgers for fabricating audit documentation for hundreds of public companies, those companies will need to follow special procedures for disclosure and reporting — and may need to prepare for litigation from the plaintiffs bar, say attorneys at Debevoise.
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Trauma-Informed Legal Approaches For Pro Bono Attorneys
As National Trauma Awareness Month ends, pro bono attorneys should nevertheless continue to acknowledge the mental and physical effects of trauma, allowing them to better represent clients, and protect themselves from compassion fatigue and burnout, say Katherine Cronin at Stinson and Katharine Manning at Blackbird.
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What Updated PLR Procedure May Mean For Stock Spin-Offs
A recently published Internal Revenue Service revenue procedure departs from commonly understood interpretations of the spinoff rules by imposing more stringent standards on companies seeking private letter rulings regarding tax-free stock spinoff and split-off transactions, and may presage regulatory changes that would have the force of law, say attorneys at Skadden.
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Proposed Cannabis Reschedule Sidesteps State Law Effects
The U.S. Department of Justice's recent proposal to move cannabis to Schedule III of the Controlled Substances Act provides certain benefits, but its failure to address how the rescheduling would interact with existing state cannabis laws disappointed industry participants hoping for clarity on this crucial question, says Ian Stewart at Wilson Elser.
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How Attys Can Avoid Pitfalls When Withdrawing From A Case
The Trump campaign's recent scuffle over its bid to replace its counsel in a pregnancy retaliation suit offers a chance to remind attorneys that many troubles inherent in withdrawing from a case can be mitigated or entirely avoided by communicating with clients openly and frequently, says Christopher Konneker at Orsinger Nelson.
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Using A Children's Book Approach In Firm Marketing Content
From “The Giving Tree” to “Where the Wild Things Are,” most children’s books are easy to remember because they use simple words and numbers to tell stories with a human impact — a formula law firms should emulate in their marketing content to stay front of mind for potential clients, says Seema Desai Maglio at The Found Word.
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New Crypto Reporting Will Require Rigorous Recordkeeping
The release of a form for reporting digital asset transactions is a pivotal moment in the Internal Revenue Service's efforts to track cryptocurrency activities that increases oversight by requiring brokers to report investor sales and exchanges, say Shaina Kamen and Max Angel at Holland & Knight.
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Geothermal Energy Has Growing Potential In The US
Bipartisan support for the geothermal industry shows that geothermal energy can be an elegant solution toward global decarbonization efforts because of its small footprint, low supply chain risk, and potential to draw on the skills of existing highly specialized oil and gas workers and renewable specialists, say attorneys at Weil.
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Exploring An Alternative Model Of Litigation Finance
A new model of litigation finance, most aptly described as insurance-backed litigation funding, differs from traditional funding in two key ways, and the process of securing it involves three primary steps, say Bob Koneck, Christopher Le Neve Foster and Richard Butters at Atlantic Global Risk LLC.
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Trump Hush Money Case Offers Master Class In Trial Strategy
The New York criminal hush money trial of former President Donald Trump typifies some of the greatest challenges that lawyers face in crafting persuasive presentations, providing lessons on how to handle bad facts, craft a simple story that withstands attack, and cross-examine with that story in mind, says Luke Andrews at Poole Huffman.
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A Vision For Economic Clerkships In The Legal System
As courts handle increasingly complex damages analyses involving vast amounts of data, an economic clerkship program — integrating early-career economists into the judicial system — could improve legal outcomes and provide essential training to clerks, say Mona Birjandi at Data for Decisions and Matt Farber at Secretariat.