Federal
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August 22, 2024
Justices Disfavor External Consistency Test, Mass. Atty Says
The U.S. Supreme Court likely will decline to hear a construction company's argument that South Dakota's refusal to apportion use tax on its equipment was unconstitutional, a Massachusetts tax agency attorney predicted Thursday, saying the justices have no appetite for applying the external consistency test anymore.
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August 22, 2024
NC Hot Rod Shop Owner Admits To Not Paying $2M In Taxes
A North Carolina automotive business owner has pled guilty to failing to pay more than $2 million in employment taxes and not filing employment tax returns, the U.S. Department of Justice announced Thursday.
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August 22, 2024
Tax Co. Owner Didn't Fraudulently Fail To File, Tax Court Says
An owner of financial and tax services companies who earned about $1 million annually and failed to file returns for four years doesn't have to pay a roughly $1.2 million fraud penalty assessed by the Internal Revenue Service, the U.S. Tax Court ruled Thursday.
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August 22, 2024
Tax Court OKs IRS Rejection Of Tax Liability Compromise
An Internal Revenue Service settlement officer didn't abuse her discretion when she decided to reject an offer from a Maryland couple to settle their more than $103,000 in outstanding tax debts by paying just over $1,800, the Tax Court said Thursday.
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August 22, 2024
IRS Secretly Targeted Some ESOPs, Court Told
The Internal Revenue Service secretly promulgated rules that treat certain employee stock ownership plans as potentially abusive, an ESOP and its related parties told a Wisconsin federal court in accusing the agency of exceeding its authority and violating the Administrative Procedure Act.
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August 22, 2024
Guardrails Needed To Thwart Abuse Of Tax-Free Tips Law
Without restrictions to prevent it, including limits on incomes of eligible workers, legislation to exempt tips from taxes — something both the Democratic and Republican presidential candidates and some congressional lawmakers are proposing — could be gamed by reclassifying income as tips.
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August 22, 2024
Meet The 'Larger Than Life' Atty Defending Hunter Biden
The renowned attorney representing Hunter Biden at his upcoming criminal tax trial is a "larger than life" figure whose ability to connect with a jury, legal acumen and media savvy have made him a go-to lawyer for celebrities and high-profile cases, according to those who know him.
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August 21, 2024
Hunter Biden Can't Link Trauma, Drug Abuse To Tax Charges
Hunter Biden can't tell jurors in his criminal tax trial that traumatic events like his brother's death caused his addiction, which led to a diminished mental capacity and his failure to pay taxes, a California federal judge said Wednesday, noting the information was irrelevant and not backed by expert opinion.
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August 21, 2024
Ariz. Man Should Pay Full $2.7M FBAR Bill, Gov't Says
An Arizona man who failed to report his foreign bank accounts in Switzerland owes approximately $2.7 million in recalculated penalties and interest to the Internal Revenue Service, the U.S. told an Arizona federal court.
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August 21, 2024
9th Circ. Upholds FBAR Penalty, Imposes Contested Interest
A woman who operates a New Zealand winery must pay $238,000 in penalties and an extra $105,000 in interest and fees for failing to report her New Zealand financial accounts to the U.S. government, the Ninth Circuit ruled Wednesday.
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August 21, 2024
3 Questions Raised By Harris' Support For 28% Corp. Tax Rate
Vice President Kamala Harris has proposed increasing the corporate tax rate to 28% to boost revenue if she's elected president, but the proposed hike raises questions about changes to the corporate tax base, the future of the OECD's global tax deal and the potential impact on workers.
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August 21, 2024
Tax Interest Rates To Stay Same In 4th Quarter
The Internal Revenue Service's interest rates for overpayments and underpayments of tax won't change in the fourth quarter of 2024, the agency said Wednesday.
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August 21, 2024
Senior House Dem Tax Writer, Trump Critic Dead At 87
A long-standing Democratic member of the House Ways and Means Committee who pressed for the release of former President Donald Trump's tax returns and for the repeal of the cap on state and local tax deductions died Wednesday.
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August 21, 2024
Wisconsin Latest State To Join Direct File For 2025
The Internal Revenue Service's free electronic tax filing program, Direct File, will be available in Wisconsin for the 2025 tax filing season, the IRS and U.S. Treasury Department announced Wednesday.
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August 21, 2024
Scrap Metal Dealer Cops To Converter Theft Conspiracy
A North Carolina scrap metal dealer has pled guilty to theft and tax charges associated with a catalytic converter theft conspiracy spanning several states, the Department of Justice announced Tuesday.
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August 21, 2024
Pros Tell IRS To Ease Off Foreign Gift Reporting Penalties
The Internal Revenue Service should take a more lenient approach when considering penalty abatements for certain individuals who fail to report large foreign gifts under proposed disclosure regulations, practitioners told the agency Wednesday.
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August 21, 2024
Tax Biz Owner Says Any Errant Returns Were Honest Mistakes
The owner of a Miami tax preparation business rejected the government's claim that she deliberately falsified client returns, telling a Florida federal court that she relied in good faith on the information provided to her by her customers.
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August 21, 2024
IRS Issues Corrections For Credit Transfer Rules
The Internal Revenue Service issued corrections Wednesday to final regulations concerning the election under the Inflation Reduction Act of 2022 to transfer certain tax credits.
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August 20, 2024
Mich. Man To Face Loan, Wire Fraud Charges Despite Mistrial
A Michigan business owner already accused of COVID-19 loan fraud cannot have a superseding wire fraud charge tossed even though a mistrial was declared in the loan fraud case, a Michigan federal judge has ruled.
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August 20, 2024
IRS Fee Hikes Threaten Tax Justice For Small Businesses
The Internal Revenue Service is expected to continue raising the cost for private letter rulings that clarify tax matters and provide taxpayer certainty, prompting concerns among tax professionals that economic justice may become unattainable for small businesses unable to bear these escalating costs.
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August 20, 2024
Insider Trading Won't Impact Pilot's Tax Sentencing Guidelines
A Manhattan federal judge found Tuesday that insider trading allegations won't bump up the guidelines sentencing range for a pilot for U.K. billionaire Joe Lewis who pled guilty to tax evasion.
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August 20, 2024
Temple Law Prof, Kostelanetz Atty To Lead ABA Tax Section
A longtime professor at the Temple University Beasley School of Law and a seasoned tax controversy partner at Kostelanetz LLP will together helm the American Bar Association Section of Taxation for the 2025-2026 term, the firm announced Tuesday.
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August 20, 2024
Tax Prep Biz Falsified Credits, Caused $41M Loss, US Says
A cosmetologist who started her own tax-preparation business in Houston caused $40.7 million in tax losses with the help of her husband by falsifying returns, including improperly claiming pandemic-era credits, the U.S. government told a Texas federal court Tuesday.
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August 20, 2024
Allen Matkins Tax Group Leader Jumps To Covington In LA
Covington & Burling LLP has added to its Los Angeles office a partner with more than 20 years of experience who most recently led Allen Matkins Leck Gamble Mallory & Natsis LLP's tax group, describing the new hire as "one of the country's leading authorities on partnership tax."
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August 20, 2024
Trade Group Urges Consistency In Pillar 2 Reporting Standard
The Organization for Economic Cooperation and Development should focus on making sure there is a standardized approach to acquiring the cross-jurisdiction information required for Pillar Two global minimum tax returns while also minimizing the compliance burden, the National Foreign Trade Council said Tuesday.
Expert Analysis
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The Nuts And Bolts Of IRS Domestic Content Tax Credit
Recent IRS guidance provides specifics on how renewable energy projects can qualify for bonus tax credits by meeting U.S. domestic content rules, but also creates a qualification framework that will be complicated for project developers to navigate, say Scott Cockerham and Wolfram Pohl at Orrick.
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How Cities Can Tackle Post-Pandemic Budgeting Dilemmas
Due to increasing office vacancies around the country, cities may consider politically unpopular actions to avoid bankruptcy, but they could also look to the capital markets to ride out the current real estate crisis and achieve debt service savings to help balance their budgets, say attorneys at Cadwalader.
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Guidance Adds Clarity To Energy Communities Bonus Credits
Recent IRS guidance on the Inflation Reduction Act's changes to tax credits for renewable energy projects offers much-needed pointers for developers and financing parties, and should allow them to more comfortably incorporate special bonus credits for projects in energy communities into their transactions, say Jorge Medina and Ira Aghai at Shearman.
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Taxing The Digital Economy: The Good, The Bad And The Ugly
U.S. tech companies should watch for important developments in international taxation, including the resolution of Apple's decade-old state aid case, growing frustration with the Organization for Economic Cooperation and Development's global tax plan and adoption of the digital services tax instead, says Joyce Beebe at Rice University's Baker Institute for Public Policy.
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Big Tax Changes For Multinational Cos. In Budget Proposal
The Biden administration’s fiscal year 2024 budget proposes changes that would materially alter decades-old Internal Revenue Code provisions, requiring a shift in multinational corporations' tax planning strategies comparable to that required after enactment of the Tax Cuts and Jobs Act, say Xenia Garofalo and Kyle Colonna at Eversheds Sutherland.
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SVB Collapse Reinvigorates Bank Accounting Debate
Silicon Valley Bank's sudden collapse revives questions over whether fair value or amortized cost accounting is the most appropriate for banks' financial reporting — a controversy that's crucial for understanding what information could have helped market participants better understand SVB's financial condition, say consultants at Analysis Group.
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Brownfield Renewables Guidance Leaves Site Eligibility Murky
Recent IRS guidance sheds some light on the Inflation Reduction Act's incentives for renewable energy development on contaminated sites — but the eligibility of certain sites for brownfield status remains uncertain, say Megan Caldwell and Jon Micah Goeller at Husch Blackwell.
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Get Ready For IRS Criminal Crackdown On Crypto
Recent developments at the IRS, from a new operating plan to the announcement of a centralized data center, signal that the agency is ramping up criminal enforcement against those using digital assets to evade tax liabilities — and given its high conviction rate, companies and individuals must prioritize compliance, say attorneys at BakerHostetler.
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NFT Tax Guidance Shows IRS Interest In Crypto Enforcement
The IRS' first ever guidance addressing the federal income tax treatment of NFTs indicates the agency could take a potentially aggressive stance in enforcing U.S. tax laws in the NFT and crypto spaces, which could have a significant impact on the self-directed IRA market, say attorneys at BakerHostetler.
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Substantiation Is Key When Gifting Crypto To Charity
A recent Internal Revenue Service memorandum makes clear that the agency will require substantiation when gifting cryptocurrency to charity, even for relatively small amounts, so donors need to be aware of the important differences between crypto and typical cash donations, says Sheryl Morrison at Lathrop GPM.
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Senate Credit Suisse Report Puts Attention On Banks, Trusts
The Senate Finance Committee's recent finding that Credit Suisse violated a plea agreement struck over its role in enabling offshore tax evasion has important ramifications for banks and trusts, including how they onboard, document and report on transactions relevant to U.S. reporting requirements, say Will Barry and Ian Herbert at Miller & Chevalier.
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Seeking IRS Accountability For Faulty Microcaptive Notice
Like the taxpayers in Standard Insurances v. U.S. seeking to expand earlier wins in microcaptive insurance cases that limit IRS use of improperly obtained information, others should consider ways to hold the agency accountable and provide incentive for it to follow the law going forward, says Joshua Smeltzer at Gray Reed.
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Biden Admin. Proposals Both Encourage And Thwart EV Adoption
While the Biden administration has been aggressively focused on promoting electric vehicles from the start, its recently issued guidance on EV tax credits and its restrictive new auto emissions proposal create a sense of implementation whiplash that may frustrate manufacturers and consumers, says Levi McAllister at Morgan Lewis.