You may recall that earlier this year the IRS launched an initiative to pursue 125,000 “high-income, high-wealth” taxpayers who have not filed taxes since 2017. These were cases where the IRS received third party information...more
9/18/2024
/ Bank Secrecy Act ,
Citizenship ,
Civil Forfeiture ,
Excessive Fines Clause ,
Failure-to-File ,
FBAR ,
Foreign Bank Accounts ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Reporting Requirements ,
Tax Appeals ,
Tax Avoidance ,
Tax Debt ,
Tax Penalties ,
Taxable Income ,
Voluntary Compliance ,
Voluntary Disclosure ,
Willful Violations
As far back as I can remember, the end of August has always elicited a sense of dread comparable to what many schoolchildren, and a fair number of adults, experience every Sunday afternoon. In retrospect, I cannot say that...more
9/4/2024
/ Adjusted Gross Income ,
Administrative Law Judge (ALJ) ,
Bonuses ,
Dividends ,
New York ,
Non-Resident Income Taxes ,
Non-Residents ,
Restricted Stocks ,
State Taxes ,
Stock Appreciation Rights ,
Tax Audits ,
Taxable Income ,
Vesting
If given their druthers, most transactional corporate attorneys would prefer to spend their day practicing “happy law,” by which they typically mean transactions that involve capital formation, mergers and acquisitions, joint...more
8/20/2024
/ Board of Directors ,
CEOs ,
CFOs ,
Corporate Dissolution ,
Deficiency Notices ,
Embezzlement ,
IRS ,
K-1 ,
Misappropriation ,
S-Corporation ,
Settlement Agreements ,
Shareholder Distributions ,
Shareholders ,
State Courts ,
Stock Transfer ,
Tax Returns ,
Taxable Income ,
Whistleblowers
There is no denying that many parts of the Code are complex and, in some cases, too obscure for many “laypersons” to comprehend. Over time, this reality spawned the need for advisers who are both knowledgeable and experienced...more
8/12/2024
/ Business Expenses ,
Capital Gains ,
Fair Market Value ,
Foreign Persons ,
Internal Revenue Code (IRC) ,
IRS ,
Limited Liability Company (LLC) ,
Non-Resident Aliens ,
Partnership Interests ,
Tax Cuts and Jobs Act ,
Tax Deductions ,
Taxable Income
Over the last couple of years, several of my friends have become citizens of the country from which their parents emigrated to the U.S. Also during that period, some acquaintances took advantage of the so-called “golden...more
7/26/2024
/ Citizenship ,
Exit Tax ,
Foreign Corporations ,
Foreign Investment ,
Golden Visa ,
Green Cards ,
Income Taxes ,
Investment Property ,
IRS ,
Like Kind Exchanges ,
Real Estate Investments ,
Replacement Properties ,
Tax Liability ,
Tax-Deferred Exchanges
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...more
7/18/2024
/ Agribusiness ,
C-Corporation ,
Cannabis Products ,
Controlled Substances ,
Controlled Substances Act ,
DEA ,
Decriminalization of Marijuana ,
Drug Trafficking ,
Illegal Activity ,
Income Taxes ,
IRS ,
Marijuana ,
Marijuana Related Businesses ,
Plant Based Products ,
Recreational Use ,
S-Corporation ,
Schedule I Drugs
In less than four months, the citizens of the United States will be electing their next President to a four-year term. They will also be deciding which of the two major political parties will “control” the Senate, the House,...more
7/11/2024
/ Apportionment ,
C-Corporation ,
Conservatives ,
Controlled Foreign Corporations ,
Foreign Corporations ,
IRS ,
Moore v US ,
Partnerships ,
Pass-Through Entities ,
Presidential Elections ,
Repatriation ,
S-Corporation ,
SCOTUS ,
Shareholders ,
Sixteenth Amendment ,
Tax Cuts and Jobs Act ,
Tax Deferral ,
Tax Liability ,
Term Limits
You may have heard or even read about the U.S. Supreme Court’s recent decision regarding the date of death value of a deceased shareholder’s shares in a closely held corporation that owned a life insurance policy on the...more
7/1/2024
/ Business Succession ,
Buy-Sell Agreements ,
Buyouts ,
Certiorari ,
Closely Held Businesses ,
Connelly v United States ,
Estate Tax ,
Fair Market Value ,
IRS ,
Liability ,
Life Insurance ,
Liquidity ,
Redemption Agreement ,
Right of Redemption ,
SCOTUS ,
Shareholders ,
Tax Audits
It is a basic principle of the income tax that the gain or loss realized by a taxpayer from the conversion of property into cash, or from the exchange of property for other property that differs materially in kind from the...more
6/11/2024
/ Beneficiaries ,
Capital Gains ,
Corporate Restructuring ,
Equity Investors ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Like Kind Exchanges ,
Limited Liability Company (LLC) ,
Liquidation ,
Partnerships ,
Property ,
Reorganizations ,
Shareholders ,
Tenancy-in-Common ,
Transfer of Assets ,
Trustees ,
Trusts ,
Wills
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...more
5/30/2024
/ Alter Ego ,
Appeals ,
Audits ,
Bad Actors ,
Bank Accounts ,
Capital Gains ,
Deficiency Notices ,
Income Taxes ,
IRS ,
S-Corporation ,
Sole Proprietorship ,
Summary Judgment ,
Tax Avoidance ,
Tax Court ,
Tax Liability ,
Tax Liens
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...more
5/16/2024
/ Audits ,
Capital Gains ,
Federal Budget ,
Foreign Governments ,
Inflation Reduction Act (IRA) ,
IRS ,
Net Investment Income ,
OECD ,
Presidential Elections ,
Surtax ,
Tax Authority ,
Tax Avoidance ,
Tax Increases ,
Tax Liability ,
United Nations ,
Wealth Tax ,
Whistleblowers
Assume that X and Y agree to the following: X will transfer ownership of Prop to Y, and Y will transfer cash to X.
What just happened? Obviously, X has sold Prop to Y. If the amount of cash that X receives is greater than...more
5/6/2024
/ Anti-Abuse Rule ,
Disguised Sales ,
Equity Partners ,
Financial Transactions ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investment ,
Investment Adviser ,
IRS ,
Limited Liability Company (LLC) ,
Membership Interest ,
Partnership Distributions ,
Partnership Interests ,
Partnerships ,
Promissory Notes ,
Suppliers ,
Tax Avoidance ,
Tax Court
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...more
4/24/2024
/ Audits ,
Court of Federal Claims ,
Debt Collection ,
Deficiency Notices ,
Filing Deadlines ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Lack of Jurisdiction ,
Petition for Writ of Certiorari ,
Redeterminations ,
SCOTUS ,
Tax Court ,
Tax Penalties ,
Tax Returns
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...more
4/19/2024
/ Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Overpayment ,
Popular ,
Spouses ,
Tax Appeals ,
Tax Court ,
Tax Debt ,
Tax Levy ,
Tax Liability ,
Tax Refunds ,
Tax Returns
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...more
4/11/2024
/ Administrative Law Judge (ALJ) ,
Attendance ,
Compensation & Benefits ,
Federal Employees ,
Income Taxes ,
Inflation Reduction Act (IRA) ,
Internal Revenue Code (IRC) ,
IRS ,
Misleading Statements ,
Paid Time Off (PTO) ,
Performance Reviews ,
Privately Held Corporations ,
Sick Leave ,
Surveillance ,
Tax Returns ,
Termination ,
Treasury Inspector General for Tax Administration (TIGTA) ,
U.S. Treasury
Depending upon what you read or, perhaps more accurately, depending upon how much you believe of what you read, you may be aware that many closely held businesses are concerned about their future.
Most of these survived...more
4/4/2024
/ Bad Actors ,
Business Closures ,
Business Ownership ,
Closely Held Businesses ,
CPAs ,
Duty to Act ,
Embezzlement ,
Employment Tax ,
Financial Distress ,
IRS ,
Responsible Party ,
Tax Court ,
Trust Fund Recovery Penalty (TFRP) ,
Trust Funds ,
Withholding Tax
Last week, Sen. Warren reintroduced her “Ultra-Millionaires” wealth tax proposal to the Senate. Query her timing. The measure has the proverbial snowball’s chance in Hell of being enacted by this Congress.Perhaps the Senator...more
3/26/2024
/ Biden Administration ,
Business Entities ,
Business Income ,
Business Losses ,
Capital Gains ,
Closely Held Businesses ,
Corporate Taxes ,
Federal Budget ,
Federal Taxes ,
Income Taxes ,
Investment ,
Limited Liability Company (LLC) ,
Medicare Taxes ,
NIIT ,
Partnerships ,
S-Corporation ,
Self-Employment Tax ,
Shareholders ,
Tax Deductions ,
Tax Rates ,
Taxable Income ,
U.S. Treasury ,
Wealth Tax
Earlier this week the White House released its Fiscal Year 2025 Budget. Of course, the federal government has not yet adopted a budget for the Fiscal Year 2024 even as we approach that year’s halfway mark. But I digress. The...more
3/18/2024
/ Capital Gains ,
Estate Tax ,
Exclusions ,
Fair Market Value ,
Federal Budget ,
Fiscal Year ,
Gift Tax ,
Grantor Retained Annuity Trusts (GRATs) ,
Grantor Trusts ,
Grantors ,
GST ,
IRS ,
Reporting Requirements ,
Revocable Trusts ,
Tax Credits ,
Tax Deferral ,
Tax Increases ,
Tax Revenues ,
Transfer Taxes ,
Trusts ,
U.S. Treasury ,
Valuation
How many times have you wished that you could undo something from your past, perhaps a string of incoherent statements made at a client dinner while slightly under the influence, or an expletive-filled email composed and sent...more
3/7/2024
/ Abrogation ,
Capital Gains ,
Cash Transactions ,
Fair Market Value ,
IRS ,
Property Transaction Taxes ,
Property Valuation ,
Reacquisitions ,
Real Estate Transactions ,
Related Parties ,
Repossess ,
Rescission ,
Selling a Business ,
Tax Liability
It is not uncommon, in the context of a business entity in which a family owns a controlling or substantial interest, for an adviser to encounter intersecting gift and income tax issues.
This week’s post will consider one...more
Would you be surprised to learn that most shareholders of closely held corporations, and especially those with minority or merely passive interests, believe they cannot be held responsible for the tax obligations of their...more
2/15/2024
/ Closely Held Businesses ,
Corporate Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Limited Liability ,
Liquidation ,
Securities ,
Shareholders ,
Stock Purchase Agreement ,
Stock Sale Agreements ,
Stock Transfer ,
Tax Court ,
Tax Liability ,
Tax Shelters ,
Transferees
Many of us have encountered variations of the following scenario: a parent owns and operates a business; one or more of their children are employed in the business; as the children mature and become more experienced and...more
2/9/2024
/ Asset Purchase Agreements ,
Business Assets ,
Business Succession ,
Closely Held Businesses ,
Family Businesses ,
Gift Tax ,
Grantors ,
IRS ,
Limited Liability Company (LLC) ,
Non-Compete Agreements ,
S-Corporation ,
Shareholders ,
Stocks ,
Succession Planning ,
Tax Court
Heads I Win, . . . -
When closely held corporations that are under common control engage in any intercompany transaction, it is prudent for the corporations and their shareholders to ensure that the transaction is being...more
2/2/2024
/ Business Losses ,
Business Taxes ,
Capital Contributions ,
CFOs ,
Closely Held Businesses ,
Creditors ,
Debt ,
Earnings Reports ,
Fund Distribution ,
Intent ,
Intercompany Transactions ,
Investment ,
IRS ,
Loan Repayment Issues ,
Loans ,
Tax Court ,
Tax Returns ,
Taxable Distributions
The Long-Term View-
Among its core functions, federal tax policy seeks to encourage those behaviors among businesses that, in the long run, will have a lasting positive effect upon the nation’s economy as a whole. ...more
1/26/2024
/ Federal Taxes ,
Gift Tax ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Itemized Deductions ,
MACRS ,
Modification ,
Sunset Provisions ,
Tax Cuts and Jobs Act ,
Tax Deductions ,
Tax Exemptions ,
Tax Legislation ,
Tax Rates
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...more
1/17/2024
/ Aggregate Damages ,
Audits ,
Business Losses ,
Capital Gains ,
Closely Held Businesses ,
Family Businesses ,
Family Members ,
IRS ,
Partnerships ,
Proposed Regulation ,
Related Parties ,
Tax Deductions