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The issue before the court was whether the taxpayer received a taxable, deemed distribution in 2014 from an account that was treated and consistently reported by the Taxpayer as an IRA even though the account entered into a number of prohibited transactions beginning in 2011. In a designated order on January 31, 2019 , Judge…
On January 15, 2019, the IRS issued a revised IRS Lapsed Appropriations Contingency Plan. Under the revised plan dated January 15, 2019, the IRS is set to recall over 2,000 IRS collections employees, including employees to field calls from taxpayer’s that received collection notices. The recall is based upon authority that provides a limited exception…
In a recent case,[1] the Federal District Court for the District of Maryland held that the U.S.’s federal IRS tax lien did not attach to a piece real property after the transfer to the taxpayer was voided under the Maryland Uniform Fraudulent Conveyance Act (“MUFCA”).[2] Facts Transfer from Insolvent Estate Plaintiff, BG, is a nursing…
On November 20, 2018, the IRS issued a memo on “Updated Voluntary Disclosure Practice” (the “Memo”). The Memo sets forth guidance for both domestic and offshore related voluntary disclosures after the recent closure of the Offshore Voluntary Disclosure Program (“OVDP”). The Memo is available here. Why is this guidance important? OVDP was the specifically designed…
Overview In Judge v Comptroller, No. 17-IN-00-0724 (Sept. 25, 2018)(link), the Maryland Tax Court overturned the Maryland Comptroller’s finding that Petitioner was personally liable for Maryland income tax withholdings for the period after the Petitioner was no longer involved in the business operated by a Maryland limited liability company (“LLC”). Background At issue was the…
In order to avoid the flow-through of examination adjustments, the Taxpayer in Mowry v Commissioner[1] attempted to argue that an S corporation, in which he was a minority shareholder, had ceased to be a valid S Corporation. The Taxpayer argued that disproportionate distributions to the majority shareholder (i.e., not the Taxpayer) over several years created…
In Garcia v. Commissioner [1], the Taxpayers were a married couple embroiled in litigation over alleged corporate fraud by an international bank specialist. The specialist’s fraud devalued the couple’s minority interest in a “South African exploration and gold mining investment company” (“R&E”). The Taxpayers along with other investors funded most of the expensive litigation from…
Joe and Mary operate a closely held business that generates a net operating loss in 2005 and 2007. The net operating loss from 2005 and 2007 are carried forward and are used to offset business income on Joe and Mary’s 2015 tax return. Joe and Mary’s 2015 tax return is selected by the IRS for…
In Hirsch v. Commissioner (here) the Tax Court held that the taxpayer’s “tax home” for purposes of the foreign earned income exclusion (I.R.C. section 911) was in the New York metropolitan area, despite the fact that the taxpayer resided in Israel, because regulatory restrictions on his professional practice limited his ability to communicate with clients…
Flume v. Commissioner (here) revolved around one noteworthy issue: did the taxpayer’s reliance on the advice of his tax return preparer spare the taxpayer from $110,000 in penalties for the taxpayer’s failure to report foreign investments on Form 5471? The taxpayer argued that he relied on the expertise of his tax return preparer to guide…
