As published in the Winter Park/Maitland Observer, Thursday Jan. 3, 2012 Edition Offers... Read More »
IRS Relaxes Innocent Spouse Rules
WebCPA reports that the IRS has extended innocent spouse relief to a greater number of taxpayers under newly proposed guidelines. The new proposed guidelines are designed to offer relief to more innocent spouses who request equitable relief from income tax liability caused by unpaid taxes of their estranged spouses. A Notice proposing a new revenue procedure, posted…
Read Full Article Categorized in: Innocent Spouse ReliefIRS Lawyer Ethics
From Paul Caron: Kwon: Four Difficult Ethical Questions for IRS Lawyers Michelle Kwon (Texas Tech), The Tax Man’s Ethics: Four of the Hardest Ethical Questions for an IRS Lawyer, 9 Cardozo Pub. L. Pol’y & Ethics J. 371 (2011): The article explores the disagreement, particularly among academics, about whether government lawyers have greater obligations to…
Read Full Article Categorized in: Court Cases, IRS ProcedureIncome is Taxable if it’s not Specifically Excluded
James Maule of Mauled Again has written an excellent post titled Expending Tax Dollars to Litigate Settled Tax Questions. In it he discusses the Eleventh Circuit’s affirmance, in Campbell v. Comr., No. 10-13677 (11th Cir. 2011), of an earlier Tax Court decision (134 T.C. No. 3 (2010)). The Tax Court concluded, following an earlier decision, that a…
Read Full Article Categorized in: Court Cases, Gross IncomeTax Court Grants Innocent Spouse
I just read an excellent post by Kay Bell on innocent spouse relief. Here’s how Kay frames the issue, but to see how it all ends you’ll have to read the entire post: Leonard Harbin filed a petition with the Tax Court seeking relief from joint and several liability for his and his now ex-wife’s…
Read Full Article Categorized in: Court Cases, Innocent Spouse ReliefTax Court Says No Theft Loss for Foreclosure
There is an epidemic of blame shifting in the housing crisis. People who knew or should have known that they would not be able to honor the terms of the mortgage notes they signed when they expected housing values to rise are, now that housing prices have declined, attempting to shift the blame to their lenders for giving…
Read Full Article Categorized in: Court Cases, Deductible Expenses, Taxes 101Accountant Tries to Deduct Value of His Own Services
Are you sure we don’t need to regulate unenrolled tax preparers? Here’s the story of an accountant named Mondello who tried, with a straight face, to take a deduction on his income tax return for the value of his services (Mondello v. Commissioner, T.C. Summ. Op. 2011-97 (July 25, 2011)): Petitioner operated his Web site business…
Read Full Article Categorized in: Court Cases, Deductible Expenses, Taxes 101But We Need More Auditors
Joe Kristan tells of the case of Estate of Louise Paxton Gallagher, T.C. Memo. 2011-148 where the Tax Court made a valuation ruling more favorable to the taxpayer than what it had originally claimed on its tax return: The executor files an estate tax return valuing a 15% interest in an LLC at $34,936,000. The IRS audits the…
Read Full Article Categorized in: Court Cases, Estate Tax, IRS ProcedureTax Court: Unrepaid Loan to Business Associate is Business Bad Debt
CPAs Alice Upshaw and Darlene Pulliam analyze a recent Tax Court ruling that found that “a taxpayer’s loan to a business associate was made in connection with the taxpayer’s trade or business, and therefore, the forgiveness of that loan was a bad-debt loss under IRC § 166(a). The IRS had argued that the loan was personal and…
Read Full Article Categorized in: Court Cases, Deductible Expenses, NewsTax Court Orders Now Available Online
The United States Tax Court today issued the following press release announcing changes to its website, including the online publication of the Court’s orders: PRESS RELEASE Chief Judge John O. Colvin announced today that, to assist the public in identifying and locating orders issued by Judges, Senior Judges, and Special Trial Judges, the United States Tax …
Read Full Article Categorized in: Announcements, Tax CourtAnother Innocent Spouse Win for IRS
From the Journal of Accountancy: The United States Fourth Circuit Court of Appeals overturned a Tax Court decision and upheld a Treasury regulation that sets a two-year statute of limitation on claims for innocent spouse relief (Jones v. Commissioner, docket no. 10-1985 (4th Cir. 6/13/11)). This marks the third time the Tax Court has been…
Read Full Article Categorized in: Court Cases, Innocent Spouse ReliefOmitted Income, Accuracy Related Penalty and Reasonable Cause
Russ Fox over at Taxable Talk says that the Tax Court upheld an accuracy related penalty against a taxpayer even though the deficiency arose because his tax preparer failed to report a 1099 on his tax return: Everyone is human. Sometimes we forget that 1099 on the tax return. Today, the Tax Court looked at a case where a…
Read Full Article Categorized in: Court Cases, IRS PenaltiesIRS’s Home Mortgage Indebtedness Ruling Much Ado About a Little Bit
I got unduly excited when I read the following headline in the Journal of Accountancy: IRS Rules That Mortgages Over $1 Million Can Be Deductible Great, I thought. Now my heart surgeon client with a $2 million dollar home mortgage can deduct all of his interest. The taxosphere seems to have shared my excitement. See James Maule’s…
Read Full Article Categorized in: Court Cases, Deductible Expenses, Individual Taxation, IRS Procedure, NewsFBAR Penalties Absurd, Unfair
Joe Kristan has a nice little post about the absurd FBAR penalties: Another inspiring tale of international tax enforcement from Phil Hodgen: I’m 33 and single, I’ve been living in France for 13 years, am naturalized French (and born American). I had NO idea about these reports until I started searching on tax information for stock…
Read Full Article Categorized in: International Taxation, IRS PenaltiesTax Court Update: An IRS Agent Fails to Corroborate her eBay Expenses
In a summary opinion issued yesterday the Tax Court held that an IRS revenue officer failed to substantiate expenses she claimed in her eBay business.¹ Below is an excerpt from the Court’s opinion in Orellana v. Commissioner, T.C. Summ. Op. 2010-51 (Apr. 20, 2010). The IRS agent/taxpayer’s admissions are stunning (emphasis added): Petitioner argues that she was…
Read Full Article Categorized in: Gross Income, Self-Employed Taxpayers, Tax CourtSex-Change Operations are Tax Deductible, Tax Court Says
It’s a crazy world we live in. Denise Lavoie of the Associated Press writes that the Tax Court has ruled that the costs of a sex change operation are tax deductible: The U.S. Tax Court ruled yesterday that a Massachusetts woman should be allowed to deduct the costs of her sex-change operation, a decision that…
Read Full Article Categorized in: Court Cases, Deductible Expenses