Federal
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May 09, 2024
'Lobster Broker' Biz Owner Liable For Dividends Deficiency
A Florida man who owned 50% of the stock of a "lobster broker business" is on the hook for a federal income tax deficiency related to nearly $193,000 in dividends from the business, the U.S. Tax Court said Thursday, but the man isn't liable for an accuracy-related penalty.
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May 09, 2024
Biz Owner Admits Hiding $3.4M In Income To Dodge Taxes
A San Francisco Bay Area man has pled guilty to tax evasion in California federal court, admitting he dodged some of the income tax he owed over a four-year period by concealing more than $3.4 million he earned from his businesses.
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May 09, 2024
IRS Lien Against Woman Properly Sustained, Tax Court Says
The U.S. Tax Court found Thursday that an Internal Revenue Service agent didn't abuse her discretion when sustaining a federal lien against a Texas anesthesiologist who repeatedly failed to address issues flagged by the agent.
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May 09, 2024
House Bill Would Increase Penalties For Tax Info Disclosure
House Ways and Means Committee Chairman Jason Smith introduced legislation co-sponsored by all the panel's Republican members to boost penalties for unauthorized releases of taxpayer data, according to a statement Thursday.
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May 09, 2024
IRS Details Process For Suspending Tax Pro File Numbers
The IRS described a process Thursday for suspending authorization file numbers assigned to tax professionals pending further review because of possible identity theft or other fraud and said in a statement that the risks potentially compromised numbers pose for tax pros and taxpayers are a growing concern.
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May 09, 2024
Mich. Doctor Ordered To Stay In Jail Until Assets Repatriated
A Michigan doctor fighting accusations that he failed to report his foreign bank accounts will stay in jail, as a federal court declined to release him Thursday when he didn't comply with an order to deposit over $1 million to cover the judgment against him.
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May 09, 2024
Tax Interest Rates To Stay Same In 3rd Quarter
The Internal Revenue Service's interest rates for overpayments and underpayments of tax won't change in the third quarter of 2024, the agency said Thursday.
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May 09, 2024
Plumbing Co. Owner Cops To Tax Scheme Tied To Gold Bars
The co-owner of a Boston plumbing supply company pled guilty Thursday to underreporting his business and personal income, after prosecutors said he plowed some of the unreported receipts into $10 million worth of gold and silver bars.
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May 09, 2024
Treasury's Energy Tax Credit Regs Leave Room For 'Chaining'
The U.S. Department of the Treasury has said it is prohibiting the practice known as chaining that links two new ways to monetize clean energy tax credits, but recent final rules governing the two methods left the door open to possible exceptions.
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May 09, 2024
Biden Taps Housing Atty, 2 More For Tax Court
President Joe Biden nominated three attorneys Thursday to serve as judges on the U.S. Tax Court, including a housing attorney who specializes in federal low-income housing tax credits, a legislative counsel for the Joint Committee on Taxation and an IRS attorney.
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May 09, 2024
Pension Plans Want Witness Stopped In $2B Danish Dispute
U.S. pension plans accused by Denmark's tax authority of committing $2.1 billion in fraud against the European country by taking illegal refunds on dividends asked a New York federal court to reject the authority's request to depose a witness who pled guilty in Denmark.
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May 09, 2024
IRS Turning to Final PFIC Rules This Year, Official Says
The Internal Revenue Service expects to "begin in earnest" this year on final regulations for partnerships that hold stock in passive foreign investment companies, including guidance that would treat partnerships as an aggregate of their partners, an agency official said Thursday.
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May 09, 2024
Chamberlain Hrdlicka Rehires Tax Atty From Atlanta Boutique
Chamberlain Hrdlicka White Williams & Aughtry PC has rehired one of its former tax attorneys, who joins the firm in Atlanta after working at a tax law-focused boutique, the firm announced Wednesday.
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May 09, 2024
IRS Publishes Inflation-Adjusted HSA Amounts
The Internal Revenue Service issued the inflation-adjusted amounts Thursday for health savings accounts for 2025 as well as the maximum amount that may be made available for excepted benefit health reimbursement arrangements.
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May 08, 2024
Fla. Man Owes $2.3M Tax For Late Mother's Estate, US Says
A Florida man spent millions of dollars on mortgage payments on his and his family members' properties using funds from his late mother's estate instead of paying the more than $2.3 million in taxes that the estate owed, the government said in its bid for an early win.
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May 08, 2024
Bill To Undo SEC Crypto Accounting Bulletin Passes House
Lawmakers in the U.S. House of Representatives on Wednesday voted to overturn the U.S. Securities and Exchange Commission's controversial cryptocurrency accounting guidance despite protests from Democrats to take a more targeted approach to amend the directive and a White House pledge to veto the bill.
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May 08, 2024
IRS May Float Disguised Sale Partnership Rules, Official Says
The Internal Revenue Service is considering "re-proposing" regulations that it withdrew in 2019 regarding the disguised sale of property to or by a partnership, an agency official said Wednesday.
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May 08, 2024
Top House Tax Writer Pushing Schumer For Tax Bill Vote
House Ways and Means Committee Chairman Jason Smith has urged Senate Majority Leader Chuck Schumer to bring up the tax bill passed by the House in January, Smith said Wednesday, adding that the delay is jeopardizing the proposal's support.
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May 08, 2024
TCJA Extension Would Cost $4.6T, CBO Report Says
Extending the provisions of the Tax Cuts and Jobs Act for 10 years under a proposal from Republicans would increase the U.S. deficit by $4.6 trillion, according to a report issued Wednesday by the Congressional Budget Office after a request from Democratic senators.
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May 08, 2024
DOJ Says Man Owes $6.2M After Failing To Report Foreign Biz
A man owes tax penalties of $6.2 million to the U.S. after failing to disclose his ownership interests in two foreign entities from 1997 to 2004, the government told a California federal court Wednesday.
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May 08, 2024
Biz Groups Tell 10th Circ. Economic Substance Doesn't Apply
The economic substance doctrine doesn't apply when a business considers tax in making a choice between two legally permissible alternatives, two organizations told the Tenth Circuit in their briefs supporting Liberty Global's position in its $109 million tax refund bid.
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May 08, 2024
4th Circ. Asks If High Court Ruling Bars Credit Suisse Tipster
A Fourth Circuit panel questioned Wednesday whether a U.S. Supreme Court ruling prevented it from reviving a whistleblower case by a former Credit Suisse employee alleging the bank helped U.S. citizens evade taxes after paying a $2.6 billion criminal penalty.
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May 08, 2024
Auto Cos. Brace For EV Battery Compliance Hurdles
New federal regulations aimed at shoring up the domestic electric vehicle manufacturing supply chain give automakers a much-needed two-year cushion to navigate a compliance minefield, and to figure out how to reinvigorate the recent waning consumer demand for electric vehicles.
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May 08, 2024
Minn. Man Sentenced To Prison For Role In $6.7M Fraud
A Minnesota man was sentenced in federal court to 108 months in prison and told to pay more than $4.7 million in restitution for running a scheme that led to the filing of false tax returns that caused roughly $6.7 million in tax losses, the U.S. Department of Justice said.
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May 08, 2024
Ambulance Co.'s Former Owner Gets 6 Years For Tax Evasion
The former owner of an ambulance company was sentenced to more than six years in federal prison for failing to pay employment taxes to the federal government and obstructing the Internal Revenue Service as it tried to collect, according to Virginia federal court documents.
Expert Analysis
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Cannabis Cos. Must Heed Growing Federal Investigatory Risks
As state-regulated cannabis markets expand rapidly, so too does government oversight, and industry participants must plan ahead to avoid potential liabilities related to workplace health and safety requirements, tax audits, securities regulations and foreign bribery laws, say Alicia Corona and Amy Rubenstein at Dentons.
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5 Ways Taxpayers Can Spot Employee Retention Credit Scams
On Monday, the Internal Revenue Service added the employee retention credit to its list of prevalent tax scams because of ERC promoters seeking to take advantage of employers, but taxpayers who may qualify for the credit can protect themselves by recognizing certain red flags, say attorneys at Potomac Law and Stout Risius.
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Could The Supreme Court Legalize Marijuana Federally?
Amid slow legislative and executive movement on cannabis reform, it’s worth examining whether the U.S. Supreme Court could provide a pathway to federal cannabis legalization — a decision that would surely require strange bedfellows given the court’s current ideological makeup, say Whitt Steineker and Mason Kruse at Bradley Arant.
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Tax Pitfalls To Avoid In Employment Litigation Settlements
Downsizing companies should keep certain questions in mind when settling claims with departing employees to ensure they understand associated tax withholding and reporting obligations, and avoid costly interest and penalties down the road, says Matthew Meltzer at Flaster Greenberg.
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Key Considerations For Taxpayers Deducting Crypto Losses
While a recent Internal Revenue Service memorandum is helpful in providing insight into how the agency is considering guidance related to cryptocurrency, questions remain with respect to whether a taxpayer can claim a tax deduction for cryptocurrency losses, say attorneys at McDermott.
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Justices' MoneyGram Opinion Could Spur State Legislation
The U.S. Supreme Court’s recent decision that federal law governs the escheatment of over $250 million in unclaimed MoneyGram checks provides clarity for some issuers, but aspects of related common law remain uncertain and states may take the opportunity to pass multistate escheatment legislation, say attorneys at Alston & Bird.
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Justices Leave Questions Open On Dual-Purpose Atty Advice
The U.S. Supreme Court's recent dismissal of In re: Grand Jury on grounds that certiorari was improvidently granted leaves unresolved a circuit split over the proper test for deciding when attorney-client privilege protects a lawyer's advice that has multiple purposes, say Susan Combs and Richard Kiely at Holland & Hart.
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Employee Retention Tax Credit: Gray Areas And Red Flags
The subjective nature of the pandemic-prompted employee retention credit, coupled with a lack of Internal Revenue Service guidance, have created fertile ground for opportunists, so businesses seeking this tax benefit should be mindful of tax advisers who would involve them in fraudulent ERC claims, say attorneys at Holland & Knight.
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High Court Ax Of Atty-Client Privilege Case Deepens Split
The U.S. Supreme Court's recent dismissal of In re: Grand Jury as improvidently granted maintains a three-way circuit split on the application of attorney-client privilege to multipurpose communications, although the justices have at least shown a desire to address it, say Trey Bourn and Thomas DiStanislao at Butler Snow.
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Clean Energy Tax Credits' Wage, Apprentice Rules: Key Points
The Inflation Reduction Act's complicated prevailing wage and apprenticeship requirements for clean energy facility construction tax credits recently took effect — and the learning curve will be more difficult for taxpayers who are not already familiar with such programs, say attorneys at Shearman.
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Crypto Coverage After FTX Fall: Crime And Custody Coverage
Cryptocurrency firm FTX's recent implosion provides a case study for potential crypto exposure under traditional insurance policies, and suggests carriers should ask some basic underwriting questions, including whether a company engages in transactions involving cryptocurrencies or holds digital assets in custody, says Anjali Das at Wilson Elser.
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US-India Advance Pricing Resolutions Should Reassure Cos.
The United States' and India's tax authorities' recent resolution of a significant number of pending advance pricing agreements should reduce taxpayer uncertainty, reassure companies of the nations' good working relationship and improve India's investment environment, say Miller Williams and Caroline Setliffe at Eversheds Sutherland.
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Reimagining Benefits For A World Without Noncompetes
Though the Federal Trade Commission's recently proposed noncompete ban is still in its infancy, companies should begin considering whether they would need to retool their payment and benefits packages to comply, while still protecting their competitive edge, say Melissa Ostrower and Alec Nealon at Jackson Lewis.