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
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
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
Three courts - the Supreme Court, the Sixth Circuit, and the Tax Court - recently rejected administrative guidance in tax cases because the guidance was either wrong as applied, unnecessary, or inapplicable.
The...more
Key Takeaways -
..The pending case, Silver v. Internal Revenue Service, will provide insight, when decided, of the view of the Court of Appeals for the District of Columbia Circuit on the scope of judicial review of...more
6/27/2022
/ Administrative Appeals ,
Appeals ,
Article III ,
Income Taxes ,
Judicial Review ,
NPRM ,
Regulatory Flexibility Act ,
Reporting Requirements ,
Small Business ,
Standing ,
U.S. Treasury
Key Takeaways:
..In Boechler P.C., v. Commissioner (“Boechler”), the Supreme Court held that the thirty-day period to petition the Tax Court for review of an adverse determination by the IRS Appeals Office in a collection...more
Key Takeaways:
..A pending U.S. Tax Court case presents an interesting theory to preclude the federal income tax disallowance of all deductions of a marijuana business.
..The theory rests on a provision in the 2017 Tax...more
For some time, the IRS has "listed" certain transactions as suspect. Based on a recent Sixth Circuit decision, a taxpayer against whom the IRS proposes a penalty for failure to report participation in a listed transaction may...more
The taxpayer in Little Sandy Coal Co. v. Commissioner, T.C. Memo 2021-15 (Feb. 11, 2021) has appealed an unfavorable United States Tax Court decision to the United States Court of Appeals for the Seventh Circuit. The decision...more
The IRS issued Interim Guidance that likely will increase the expense and burden of filing research credit refund claims. Research credits in original returns are not affected by the Interim Guidance....more
On October 15, 2021, the IRS published Information Release 2021-203, based on Memorandum 20214101F (the "Memorandum") prepared by Field Attorneys in the Office of Chief Counsel, setting out a detailed procedure requiring...more
In two recent cases, the IRS has tried to defeat research credit refund claims on procedural grounds, rather than simply litigating whether the substantive nature of the asserted research meets the requirements of section 41...more
8/6/2021
/ Audits ,
Failure To State A Claim ,
Internal Revenue Code (IRC) ,
IRS ,
Pending Legislation ,
Research and Development ,
SBA ,
Scientific Research ,
Small Business ,
Tax Credits ,
Tax Deductions ,
Tax Refunds
To claim federal income tax credits for a research project, a taxpayer must prove that the project satisfies each prong of a four-part test. In IRS Field Attorney Advisory 20212501F (June 25, 2021), the Large Business and...more
For practitioners advancing research credit claims, a recent Tax Court case is of concern because it said more than was necessary to reject the taxpayer's claim. The Commissioner may seize upon dicta in the opinion to...more
A recent United States Tax Court decision raises a high bar for taxpayers claiming federal income tax credits for research expenses. The case turned on whether the taxpayer proved that "substantially all" of its research...more
A recent Tax Court decision - which arguably is wrongheaded - could cause many suppliers of production parts to original equipment manufacturers to lose federal income tax credits. Suppliers are well advised to consider...more
The U.S. Court of Appeals for the Ninth Circuit recently held that in-house counsel's legal memos used to prepare an expert witness were partially protected from disclosure as attorney work product. In the course of an income...more
In Audio Technica U.S., Inc. v. United States, 2020 WL 3481702 (6th Cir. 2020), the Sixth Circuit has made clear that calculation of the federal income tax credit for increasing research activities may require a taxpayer...more