News & Analysis as of

Internal Revenue Code (IRC) Tax Court

Pillsbury Winthrop Shaw Pittman LLP

Developments in Association Law 2022 – 2024

The following is a review of notable cases and regulatory developments for nonprofit organizations at the federal and state levels during the last two years....more

Fox Rothschild LLP

Tax Court to Revisit Problematic Economic Substance Ruling

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Last October, a District Court in Colorado turned the economic substance doctrine on its head. In Liberty Global, Inc. v. US, a District Court granted the Government’s motion for summary judgement and found that contrary to...more

Freeman Law

Tax Court Addresses a Difference in Dates in the TCJA

Freeman Law on

In Varian Medical Systems, Inc. v. Commissioner, the Tax Court addressed a seeming oversight in the Tax Cuts and Jobs Act of 2017 (the “TCJA”) involving the effective dates for amendments to section 78 and the enactment of...more

Cadwalader, Wickersham & Taft LLP

Liberty Global Appeals Economic Substance Doctrine Ruling

In ongoing litigation between the government and Liberty Global Inc. (“Liberty Global”), Liberty Global has appealed a district court’s decision that ruled in favor of the government to the Tenth Circuit. We have previously...more

Jones Day

U.S. Tax Court Invokes Loper Bright for the First Time

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The U.S. Tax Court allows a dividend-received deduction ("DRD") for a Section 78 gross-up while also disallowing foreign tax credits in its first application of Loper Bright....more

McDermott Will & Emery

Supreme Court Overrules Chevron, Opening Door for New Tax Reg Challenges

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On June 28, 2024, the Supreme Court of the United States reshaped the federal tax landscape when it overturned the long-standing Chevron doctrine in Loper Bright Enterprises v. Raimondo, No. 22-451. The Chevron doctrine, a...more

Fox Rothschild LLP

What’s Next for International Reporting Post-Farhy?

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Last April, in Farhy v. Commissioner, the Tax Court held that the IRS did not actually have authority to assess penalties under IRC § 6038. The result was devastating for the IRS, as it meant it did not have authority to...more

Cadwalader, Wickersham & Taft LLP

Getting Technical with Partnership Termination Rule

The Tax Court recently ruled that a new partnership (“New Shoals”) that is deemed to form on a technical termination may use a taxable year that starts on the date of the termination of the old partnership (“Old Shoals”),...more

Polsinelli

Tax Court Strikes out Smoltz and Klesko’s Big K SCE, but Provides Relief for Those Facing Fraud Allegations

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In the late 1990s, former Atlanta Braves players John Smoltz and Ryan Klesko formed Big K Farms (“Big K”), a partnership that, over the years, acquired approximately 1,500 acres of land in Georgia for around $4 million. From...more

Holland & Knight LLP

IRS Authority to Assess Certain Foreign Information Return Penalties Restored by D.C. Circuit

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The U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) on May 3, 2024, reversed the U.S. Tax Court (USTC) in Alon Farhy v. Commissioner, No. 23-1179 (D.C. Cir. May 3, 2024) by holding that...more

Rivkin Radler LLP

Partnership Transactions Lacking Economic Substance or Business Purpose: Investor Beware

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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

Rivkin Radler LLP

Missing the Tax Court’s 90-Day Deficiency Deadline – Now What?

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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

Carlton Fields

Tax Court Upholds IRS Decision That Premiums Paid to Microcaptive Insurance Companies Did Not Qualify for Tax Deductions

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The U.S. Tax Court recently upheld a determination by the IRS that premium payments to certain microcaptives could not be deducted for tax purposes because the premium payments were not actually for “insurance.”...more

Rivkin Radler LLP

IRS Cannot Offset Taxpayer’s Refund With A Disputed Tax Liability

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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

Falcon Rappaport & Berkman LLP

For Tax Purposes, Are Limited Partners Really Limited Partners?

In Soroban Capital Partners v. Commissioner, the United States Tax Court determined that entities formed as state law limited partnerships did not necessarily mean that the limited partnerships’ limited partners were limited...more

Polsinelli

Easement Fund Victory on Perpetuity Will Result in More Attention on Valuation

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In the latest victory for taxpayers, the Tax Court determined that the Treasury failed to follow federal law in enacting a conservation easement perpetuity rule known as the “proceeds regulation.” The majority opinion held...more

Gray Reed

Tax Court Decision on Family Business Affecting Income Tax, Estate Tax

Gray Reed on

In a recent Tax Court decision, the court reviewed the activities of the Huffman family as it pertained to corporate dealings involving the family aviation business (Infinity Aerospace Inc. which the court refers to by its...more

Holland & Knight LLP

U.S. Tax Court Holds Bond Financing Costs Are Includible in LIHTC Basis

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A U.S. Tax Court decision entered on Feb. 20, 2024, in 23rd Chelsea Associates LLC v. Commissioner of Internal Revenue held that bond issuance and related financing costs incurred in connection with the development of a...more

Gray Reed

Tax Court Finds that SECA Limited Partner Exception Requires ‘Functional Analysis Test’

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A recent U.S. Tax Court decision provides clarity to what the Internal Revenue Service (“IRS”) considers a limited partner for purposes of the ‘limited partner exception’ to the Self-Employment Contributions Act (“SECA”) tax...more

Polsinelli

Bare Knuckle Conservation Easement Brawl Leaves Participants in Limbo

Polsinelli on

Two recent tax court cases paint an ominous picture for professionals and investors who participated in listed syndicated conservation easement transactions. Coming on the heels of the Fisher conviction and his lengthy...more

Rivkin Radler LLP

Shareholder-Transferee Liability for a Corporation’s Income Tax

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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

DarrowEverett LLP

‘As Such’: Soroban Case Puts Limited Partnerships Under Tax Scrutiny

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In Soroban Capital Partners, LP v. Commissioner, the U.S. Tax Court determined that the exception to net earnings from self-employment in Section 1402(a)(13) of the Internal Revenue Code of 1986, as amended (the “Code”) ...more

Gray Reed

The Fine Print: IRS Examination of Artwork

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Many taxpayers have art collections. However, the art collections of some high-net-worth individuals, family offices, and business taxpayers may draw the unwanted eye of the IRS. With the increased focus on auditing...more

Holland & Knight LLP

U.S. Tax Court: Limited Partner SECA Exception Requires Functional Analysis

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The U.S. Tax Court recently issued a precedential opinion in Soroban Capital v. Commissioner, holding that the limited partner exception to the Self-Employed Contributions Act (SECA) in Section 1402(a)(13) of the Internal...more

Gray Reed

What a Difference a Day Makes, at Least When it Comes to Tax Court Petitions

Gray Reed on

The Tax Court can be an unusually cruel place when it comes to deadlines.  This is what a recent taxpayer found out in a Tax Court decision that denied their challenge of an over $4.6 Million dollar tax bill asserted by the...more

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