The recent Tax Court decision in Farhy demonstrates that clever and novel arguments can carry the day in complex tax litigation matters. In that case, the taxpayer stipulated that he: (1) had Form 5471 filing obligations...more
4/13/2023
/ Failure-to-File ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Lack of Authority ,
Settlement Agreements ,
Tax Abatement ,
Tax Court ,
Tax Liability ,
Tax Penalties ,
Tax Returns
When is Written Managerial Approval Required?
In 1998, Congress sought to provide additional protections to taxpayers through passage of the Internal Revenue Service Restructuring and Reform Act (the “Act”). Buried within...more
In the federal income tax world, there are effectively two functions within the Internal Revenue Service (“IRS”). First, the IRS examines tax years and tax returns to determine whether the taxpayer has reported the correct...more
If you have unreported foreign accounts, you are not alone. Every year, I speak with hundreds of clients with tax non-reporting issues (e.g., FBARs, Form 8938, Form 3520, Form 3520-A, etc.). The good news: the IRS offers...more
2/24/2023
/ FBAR ,
Foreign Bank Accounts ,
Income Taxes ,
Internal Revenue Code (IRC) ,
International Tax Issues ,
IRS ,
Legal Representatives ,
Offshore Funds ,
Reporting Requirements ,
Tax Liability ,
Tax Planning
Introduction -
Much of the current litigation between taxpayers and the United States has centered on the definition of willfulness or whether the non-willful FBAR penalty should apply on a per year or per account basis. ...more
Under federal tax law, there are significant differences between grantor and non-grantor trusts. Grantor trusts are treated as disregarded entities. In layman’s terms, this means that the grantor (i.e., the creator or the...more
Recently, there seems to be some confusion regarding section 643(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and its application to trusts. Indeed, that provision—particularly to those not well-versed in...more
Trusts come in many variations, rendering them often difficult for non-attorneys to follow and comprehend. Indeed, this variation can often be seen in the nomenclature used for trust arrangements, which includes terms such...more
12/7/2022
/ Asset Management ,
Beneficiaries ,
Discretionary Trust ,
Estate Planning ,
Estate Tax ,
Gift Tax ,
Grantor Trusts ,
IRS ,
Revocable Trusts ,
Tax Liability ,
Tax Planning
The Bank Secrecy Act (“BSA”) requires United States persons (“USPs”) to file FinCEN Forms 114, Report of Foreign Bank and Financial Accounts (“FBARs”), for each calendar year in which the aggregate amount(s) in certain...more
Taxpayers routinely resolve their tax controversy matters without resort to litigation. Indeed, good tax professionals will often seek to avoid costly and time-consuming litigation, if possible, by utilizing various...more
The Bank Secrecy Act requires certain taxpayers to submit timely FBARs to the United States reporting their interests in foreign accounts. If a taxpayer has an FBAR filing requirement and misses it, the taxpayer can be...more
Taxpayers routinely ask me if they can go to jail for not paying their federal income taxes. Admittedly, the bar is not that high for felony tax evasion—the government must only prove three elements: (i) willfulness; (ii)...more
Taxpayers initiate lawsuits for a variety of reasons. For example, a taxpayer may bring a lawsuit against a defendant for breach of contract, personal negligence, defamation, or for a litany of other claims. Believe it or...more
Missing any deadline is stressful. But missing a tax deadline is more so. Per the Bank Secrecy Act (Title 31 of the U.S. Code), certain taxpayers must file so-called FBARs (currently FinCEN Form 114) with the government...more
Federal case and after federal case continues to come out providing real-life examples of the pitfalls of filing a Streamlined Filing Compliance Procedure (“SFCP”) with the IRS when the facts suggest willfulness rather than...more
Join leading tax experts from across the globe, as we discuss tax trends that are reshaping international taxation -
AN EXPERIENCE UNLIKE ANY OTHER -
Find yourself on the cutting-edge of international tax law, with...more
8/31/2022
/ Continuing Legal Education ,
Cross-Border ,
Cryptocurrency ,
Enforcement ,
Foreign Derived Intangible Income (FDII) ,
GILTI tax ,
Income Taxes ,
International Tax Issues ,
IRS ,
Multinationals ,
Tax Liability ,
Tax Penalties ,
Tax Planning ,
Tax Reform ,
Transfer Pricing ,
Webinars
Interests in or transactions with foreign trusts can cause headaches for federal income tax purposes. Depending on the interest or transactions at issue, U.S. citizens or residents may have to file a Form 3520, a Form...more
As a general matter, the FBAR is not a difficult tax form to prepare, at least for most taxpayers and their tax professionals. At its very basics, it merely asks for identifying information regarding the taxpayer and certain...more
Section 6721 provides the IRS with authority to impose civil penalties against taxpayer-employers who fail to timely file correct information returns (e.g., Forms W-2/W-3 and Forms 940/941). Under section 6721’s three-tiered...more
The Employee Retention Credit – Introduction. Congress acted quickly during the worldwide COVID-19 pandemic to provide hiring and other economic incentives to employers. One particularly helpful relief provision—the employee...more
IRS Tax Penalties and the Tax Professional Reliance Defense - No one wants to pay federal taxes. And this truism applies more so with respect to federal tax penalties. Accordingly, clients often call upon their tax...more
Worker Classification and Section 530 Relief - Employers are required to pay employment taxes to the IRS. Generally, these payments consist of two portions: the employee’s portion of FICA and income taxes and the employer’s...more
As our previous firm Insights discuss, there is a numbered notice for almost any communication the IRS provides to a taxpayer. See, e.g., CP518 and CP504. In some cases, the taxpayer may safely review a communication...more
The IRS’s Streamlined Filing Compliance Procedures continue to be a valuable tool for taxpayers who are not in compliance with all of their United States income tax reporting obligations associated with foreign activities....more
Section 6751(b) and Assessable - Penalties Section 6751(b) of the Code has been a potent weapon for taxpayers since the Second Circuit held in Chai that certain penalties are not valid without written managerial approval. ...more