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On August 16, 2021, the IRS Director of Collection Policy issued a memorandum to provide guidance when FATCA[1] information should be used in IRS Collections cases. See SBSE-05-0821-0015 (the “Memo”) (available at the IRS website here: link). The new guidance from the Memo will be added to the Internal Revenue Manual effective August 16, 2021….
Overview A recent federal magistrate’s recommendation highlights a practical battle between the U.S. Government and a Defendant that is seeking to avoid payment of a $15+ million FBAR penalty: what happens if all of the defendant’s assets are outside of the United States? In a federal suit to reduce the FBAR penalty to judgement, the…
Ruesch v. Commissioner, 154 T.C. No. 13 (2020)(link to case in Google Scholar) is the first Tax Court opinion that analyzes the IRS’s ability to certify “seriously delinquent tax debts” to the US State Department for potential “denial, revocation, or limitation of a passport” under IRC § 7345. The case was dismissed because the IRS…
Aspro, Inc. v. Commissioner, T.C. Memo 2021-8 (January 2021) is a cautionary tale for C corporations that look to zero out taxable income through post hoc management fees. In total the three shareholders received management fees in excess of a $1 million dollars a year for the years at issue (2012-2014). Although the management…
In Grajales v Commissioner, 156 T.C. No. 3 (2021), the Tax Court held the 10% tax in section 72(t) applicable to early distributions from qualified retirement plans is not subject to § 6751(b)(1). As a result, the § 72(t) 10% tax is not subject to the written supervisory approval requirement before being asserted against the…
In Ramey v Commissioner, 156 T.C. No. 1 (2021) (available in Tax Notes free resources here), the IRS mailed a final notice of intent to levy (LT11) to the taxpayer’s last known address (and actual address) via certified mail return receipt requested. The address was a shared office location (i.e., multiple businesses were located at…
Overview of IRS Rev. Proc. 2020-20 Rev. Proc. 2020-20 (link) provides certain qualifying non-resident aliens some administrative relief for certain extended stays in the U.S. caused by travel disruptions arising during the COV-19 pandemic. As discussed below, if the individual meets the revenue procedure’s criteria, then the individual may exclude up to 60 days from…
Overview In Reflectxion Resources, Inc. v. Commissioner, T.C. Memo. 2020-114 (August 3, 2020)(link), the U.S. Tax Court held that a Notice of Determination of Worker Classification (“NDWC”) was not in and of itself sufficient to provide the Tax Court with jurisdiction for all payroll tax periods raised in Reflectxion Resources, Inc.’s (“Taxpayer”) petition. In order…
In U.S. v. Bittner [1](available here: link), the U.S. District Court for the Eastern District of Texas (the “Court”) handed taxpayers a victory by declining to follow the legal analysis in Boyd v U.S. In doing so the Court rejected the IRS’s interpretation of what constitutes a “violation” for purposes of computing non-willful FBAR penalties…
Per an internal IRS memorandum prepared within the IRS SB/SE division (link to memo), the IRS has determined that it will not allow a § 199A deduction when it prepares a substitute for return (“SFR”). [mfn] SBSE-04-1219-0054 Guidance for the qualified business income deduction on a substitute for return (12/9/2019) available at https://www.irs.gov/pub/foia/ig/sbse/sbse-04-1219-0054.pdf.[/mfn] Under §…
