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
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
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
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
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
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
Taxpayers who employ workers have obligations under federal law to withhold and remit federal employment taxes to the IRS. In addition to this withholding and payment requirement, federal law also imposes certain reporting...more
FBAR Penalties - On March 8, 2022, the Southern District of New York issued its Opinion in the case of United States v. Schik, No. 20-cv-0221 (MKV), 2022 U.S. Dist. Lexis 41148 (S.D.N.Y. Mar. 8, 2022). In that case, the...more
Taxpayers are always interested in whether certain expenditures qualify as tax deductions. But many taxpayers often forget that expenditures may alternatively qualify for various tax credits. And all things being equal,...more
Generally, when a taxpayer makes an overpayment of tax, the IRS refunds the overpayment to the taxpayer. But this is not always the case. For example, the IRS has the statutory authority to credit (or offset) an overpayment...more
Willful FBAR Penalties - The Schwarzbaum case has received a lot of attention in the last few years from tax professionals. For example, in 2020, the district court concluded—contrary to some other federal court...more
Good tax attorneys will do whatever it ethically takes to win on behalf of their clients. Often, this means the attorney must not only have a good understanding of the substantive provisions at play, but also relevant...more
Also Referred to as Internal Revenue Code Section 6672; I.R.C. § 6672; Section 6672; Trust Fund Recovery Penalty -
Background. In certain instances, the Internal Revenue Code (the “Code”) requires persons to withhold...more
Taxpayers have long utilized trust arrangements for the transfer of wealth to beneficiaries or for the protection of assets from creditors. Generally, there is nothing nefarious about these types of arrangements. Rather,...more
1/14/2022
/ Estate Planning ,
Foreign Trusts ,
Grantor Trusts ,
Income Taxes ,
Internal Revenue Code (IRC) ,
International Tax Issues ,
IRS ,
Tax Amnesty ,
Tax Evasion ,
Tax Planning ,
Tax Returns ,
Voluntary Disclosure
Ordinarily, taxpayers file their income tax returns each year with the IRS and hear nothing more. Rather, the Internal Revenue Service (“IRS”) simply processes the tax return, assesses the reported amount of tax due, and...more
Our firm has written extensively on the topic of cryptocurrency. Indeed, we have even designated an entire resource page on our website to this always interesting and constantly evolving topic...more
Taxpayers who file false tax returns with the IRS can find themselves in hot water. Indeed, section 7206(1) of the Internal Revenue Code (“Title 26”) makes it a felony to file a false return when the taxpayer knows that the...more
The Internal Revenue Code (the “Code”) contains over 150 civil tax penalties for various conduct and non-conduct. One common group of penalties, associated with the late filing of a tax return and the late payment of tax,...more
9/7/2021
/ Amended Complaints ,
Estate Tax ,
Federal Rule 12(b)(6) ,
Filing Deadlines ,
Gift Tax ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Late Payments ,
Motion to Dismiss ,
Reasonable Cause Defense ,
Tax Penalties ,
Tax Returns
When a taxpayer makes a voluntary payment to the IRS, the taxpayer has the option to designate the application of the payment to certain periods and/or taxes. For example, if a corporation owes federal employment taxes and...more
8/18/2021
/ Employment Tax ,
IRS ,
Payroll Taxes ,
Personal Liability ,
Tax Evasion ,
Tax Liability ,
Tax Penalties ,
Tax Planning ,
Tax Returns ,
Trust Fund Recovery Penalty (TFRP) ,
Trust Funds
The IRS’ streamlined filing procedures were first offered by the IRS on September 1, 2012. Since that time, the IRS has made several revisions. A current summary of the IRS’ Streamlined Filing Compliance Procedures is...more
Kovel Agreement - The Internal Revenue Service (IRS) has broad statutory authority to investigate and audit taxpayers. In many cases, the IRS attempts to fulfill this statutory authority through seeking communications made...more
Federal tax law permits taxpayers to deduct so-called “theft losses,” provided certain requirements are met. Initially, a taxpayer must show that he or she will not receive compensation through insurance or another third...more