Federal

Help Us Forget

Having been swept along for nine days “by the force of the hostile winds on the fishy sea,” Odysseus and his crew came to a strange land. After securing their ships, Odysseus sent some of his “companions ahead, telling them to find out what men . . . might live here in this country.” They came upon the Lotus Eaters, a people “who live upon . . . the honey-sweet fruit of the lotus.”[i] Those crew members who ate of the fruit were left in a state of bliss, forgetting all else, including an urgency to return home to Ithaca.[ii]Continue Reading Tax Considerations and the Reclassification of Marijuana – We’re Not There Yet

Almost That Time

In less than four months, the citizens of the United States[i] will be electing their next President to a four-year term.[ii] They will also be deciding which of the two major political parties will “control” the Senate, the House, or both, for at least the next two years.[iii]

In other words, the composition of two of the three branches of the federal government – specifically, those responsible for determining the direction of the country, and perhaps the world – will soon be up for grabs.Continue Reading The Supreme Court’s Non-Opinion On The “Realization” of Income – A Lost Opportunity?

You Mess With The Bull . . .

An anonymous thinker, lost to history, is credited with having said that the unofficial motto of the IRS is, “We have what it takes to take what you have.”

In some instances, the truth of the above statement is manifested in what may be described by certain observers as an abuse of governmental power. In other cases, however, like that of the Taxpayers described below,[i] many members of the public will feel vindicated by the outcome, while probably many more will categorically approve of a bad actor’s having received their just deserts.[ii]Continue Reading Collecting an Individual’s Unpaid Taxes from Their Controlled Entities

“Let’s make sure if they move, they have nowhere else to go because we’re all taxing them together.”[i]

Around the Globe

Earlier this year, the OECD observed there has been a significant increase in global wealth inequality over the last two decades. It also acknowledged that “taxation is a key instrument . . . that governments have at their disposal to address inequalities.” It added that, as “countries are looking for additional revenue sources to meet their long-term public spending needs,” it will be important to ensure “that everyone contributes their fair share,” specifically mentioning those individuals with “offshore wealth.”[ii]Continue Reading Tax Authorities of the World Unite? Not Quite, But the IRS Joins the Movement to Tax the Rich

Notice of Deficiency

Over the years, I have observed there is only one thing that a taxpayer fears more than being notified by the IRS that their income tax return for a particular taxable year has been selected for audit, and that is being notified that the IRS has determined the taxpayer owes additional tax,[i] plus interest[ii] and penalties,[iii]  for such year.

A taxpayer who has received a timely[iv] notice of deficiency[v] is generally presented with three basic options:Continue Reading Missing the Tax Court’s 90-Day Deficiency Deadline – Now What?

Use Your Imagination

Imagine the IRS notifies Taxpayer that they have an outstanding tax liability with respect to Tax Year, and that the agency intends to levy on Taxpayer’s property to collect the allegedly unpaid tax. Taxpayer challenges the levy, arguing they had already paid the tax. The IRS Office of Appeals sustains the levy, and Taxpayer petitions the U.S. Tax Court to review that decision.

Imagine also, while the issue of the levy is pending before the Court, the IRS withholds from Taxpayer a refund for a later tax period, to which Taxpayer is concededly entitled, and that is unrelated to the levy.  Continue Reading IRS Cannot Offset Taxpayer’s Refund With A Disputed Tax Liability

Tax Season

As we approach the deadline for paying federal individual income taxes and, generally, for filing the returns on which such taxes are determined, some of you may be recalling how the Inflation Reduction Act of 2022 appropriated billions of dollars[i] to the IRS to bolster enforcement of the Code, including hiring more enforcement agents, providing legal support, and investing in “investigative technology.”Continue Reading An Inveterate Golfer At the IRS

Related Party Transactions

Few individual owners of a closely held business would be surprised if you explained to them that the IRS and the Federal courts generally will subject many transactions between certain “related” persons to heightened scrutiny (a) to ensure that the related persons have not structured a transaction to gain a tax advantage without also having a bona fide business purpose, or (b) to ascertain whether the intended economic consequences of the transaction are consistent with its form and with how it is reported by the parties for tax purposes.   

However, those same individuals may be taken aback if you described to them some of the measures that Congress has enacted over the years to prevent related persons from realizing certain tax benefits that Congress has determined would be inappropriate in the context of a transaction between related parties.  Continue Reading Partnership Losses on Related Party Sales – The IRS Provides Some Clarification

This is The End[i]  

I have dreaded the year end for as long as I can remember. As a teenager and then as a young adult I associated the final quarter of the year, and especially the period beginning on Thanksgiving and ending on New Year’s Eve, with completing final exams and papers.[ii] After graduating from law school, but being inexperienced with the business of business, I naively hoped that the blues and the anxiety that I had experienced every year during that time of year were finally behind me. Not so.Continue Reading Taxes and the 2024 Election: ‘Tis the Season to Plan and Act

WTF

It appears that many of the country’s colleges and universities[i] believe they have not already contributed enough to the decline of American education and to the erosion of our society, generally.

These institutions of so-called higher learning are not satisfied with having introduced major studies in subjects that can only be described as laughable, diluted academic standards, misrepresented history, encouraged identity politics, adopted cancel culture, stifled free speech, vilified Judeo-Christian values, and demonized Western civilization.Continue Reading Activities Contrary to Public Policy – Revoking the Tax Exempt Status of Universities