As previously reported by Miller Canfield, unscrupulous promotors caused many taxpayers to file claims for the Employee Retention Credit even when they did not qualify. As a result, the IRS views claims for this credit with...more
Altria Group, Inc. v. United States, a federal income tax case pending in federal district court in Virginia, shows the importance of laying groundwork for litigation long before a complaint is filed. At issue is a difficult...more
In Private Letter Ruling 202352011 (December 30, 2023), the taxpayer asked the IRS to determine the amount that it will realize in a property transaction. The taxpayer will receive the property in an arm’s length exchange...more
As previously reported by Miller Canfield, in October 2023 the IRS launched a withdrawal program for Employee Retention Credit (ERC) claims for employers who now doubt the validity of their claim. Unfortunately, employers who...more
As described in our October 24 article “IRS Offers Forgiveness for Erroneous Employee Retention Credit Claims” the IRS has increased scrutiny on claims for the Employee Retention Credit (“ERC”). The IRS halted processing...more
The IRS recently issued guidance explaining that OSHA communications regarding COVID-19 precautions alone do not allow employers to qualify for the Employee Retention Credit (“ERC”).
Other than some start-up businesses,...more
The stream of cases challenging disallowance of research tax credits continues in the Tax Court with Phoenix Design Group, Inc. v. Commissioner. The taxpayer in Phoenix Design designs mechanical, electrical, and plumbing...more
In Lee v. United States, the Federal Court of Appeals for the Eleventh Circuit held that a taxpayer could not avoid late filing and late payment penalties because of the failure of his CPA to electronically file his returns...more
The Employee Retention Credit (“ERC”) is a popular COVID-19 tax break that was targeted by some unscrupulous and aggressive tax promoters. These promoters flooded the IRS with ERC claims for many taxpayers who did not qualify...more
The recent Tax Court opinion in Hyatt Hotels Corporation v. Commissioner of Internal Revenue informs a federal income taxpayer about its tax responsibility for funds for a guest reward program: when the taxpayer will be...more
If a taxpayer calculates research tax credits using an appropriate statistical sampling method on its tax return, does the taxpayer then make a prima facie case in the Tax Court by introducing evidence of that statistical...more
A tax case pending in the United States Supreme Court, Moore v. United States, may cause a cataclysmic change in the federal income tax. The 16th Amendment to the United States Constitution empowers Congress to impose “taxes...more
8/18/2023
/ Apportionment ,
Certiorari ,
Constitutional Challenges ,
Controlled Foreign Corporations ,
Federal Taxes ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
SCOTUS ,
Sixteenth Amendment ,
Tax Cuts and Jobs Act
On July 31, 2023, a divided Michigan Supreme Court in Vectren Infrastructure Services v. Michigan Treasury issued an important decision in favor of the state, ruling that an out-of-state taxpayer could not reduce its tax by...more
All is not necessarily lost if a taxpayer files a petition after the filing deadline in United States Tax Court to contest a federal tax deficiency. A recent case ruled that the filing deadline may be suspended in appropriate...more
A federal district court ruled in a high-profile case that the Justice Department may rely on common law rather than the statutory notice of tax deficiency procedure in the Internal Revenue Code to assert a federal income tax...more
A taxpayer against whom the IRS determines—not "assesses" but "determines"—a tax deficiency must decide whether to make a remittance to the IRS and if so, whether the remittance is to be treated as a "deposit" or as a...more
Key Takeaways -
..The Seventh Circuit torpedoed a taxpayer’s research tax credits for two watercrafts.
..The decision creates confusion about how a taxpayer should document research activities and arguably undermines...more
Companies with workers who travel to other states for work (mobile workers) or those who work permanently from another state (remote workers) face unique state tax compliance challenges. For years, efforts to enact federal...more
Key Takeaways -
..New motor vehicle dealers should consider including a tax-saving contingency in their cash plans for pending federal income tax legislation affecting inventory accounting.
..If enacted, dealers using...more
Taxpayers who are not parties to an action voiding an IRS Notice published without notice and comment should carefully consider the risk that the IRS may nonetheless treat the Notice as valid as to nonparties.
In two...more
A Treasury regulation provides that a researcher performing technological research for its customer is not entitled to federal income tax credits for the cost of the research if the researcher does not retain substantial...more
Tax-exempt entities (including non-profits, states, local governments and public schools) that are planning energy-efficient projects, such as solar improvements to existing buildings or improvements to provide for...more
On October 11, 2022, the IRS published Revenue Procedure 2022-19 providing taxpayers with liberalized procedures for resolving common S corporation issues. Previously, taxpayers would have needed costly IRS letter...more
On Aug. 24, 2022, the IRS released Notice 2022-36 providing automatic relief from failure to file penalties for the 2019 and 2020 tax years for a significant number of individuals and businesses that were late in...more
The Inflation Reduction Act of 2022 (the “Act”), which passed both chambers of Congress on Aug. 12, 2022, includes the following tax provisions meant to raise government revenues and subsidize green energy initiatives....more
8/16/2022
/ Alternative Minimum Tax ,
Business Losses ,
Clean Energy ,
Corporate Taxes ,
Energy Tax Incentives ,
Enforcement ,
Excise Tax ,
Foreign-Owned Corporations ,
Investment Tax Credits ,
Pending Legislation ,
Production Tax Credit ,
Renewable Energy ,
Stock Repurchases ,
Tax Credits ,
Tax Rates