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Tax Blawg

Tax Talk for Tax Pros

Introduction

Welcome to TaxBlawg, a resource from Chamberlain Hrdlicka for news and analysis of current legal issues facing tax practitioners. Although blawg.com identifies nearly 1,400 active “blawgs,” including 20+ blawgs related to taxation and estate planning, the needs of tax professionals have received surprisingly little attention.

The Wall Street Journal's Tax Blog gives “tips and advice for filers,” and Paul Caron’s legendary TaxProf Blog is an excellent clearinghouse for academic and policy-oriented news. Yet, tax practitioners still lack a dedicated resource to call their own. For those intrepid souls, we offer TaxBlawg, a forum of tax talk for tax pros.

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Taxpayers should never be taxed on income they don’t receive.  But it happens.  It occurred in a recent decision, Koopmann v. United States, No. 09-CV-333 T (Fed. Cl. Sept. 30, 2020), and there are lessons that may be learned from what went wrong for the litigant in that case. 

In Koopmann, the taxpayer retired from United Airlines in 2000, and was covered by United Airlines' non-qualified deferred compensation plan.  About two years after the taxpayer’s retirement, United Airlines filed a Chapter 11 bankruptcy petition, which ultimately resulted in an approved reorganization plan ...

Hardly a day goes by when some politician or editorial person doesn’t suggest that we don’t need the IRS or should simply do away with it. Most of them come in connection with suggestions for changing the tax system to something like a national retail sales tax. What these people fail to understand, and this writer is not challenging the sincerity of their views, is that without the IRS, our tax gap would explode geometrically.

We call our system a “voluntary” one, but we remain short of “volunteers”: there are simply too many people and businesses who don’t get around to ...

Well for starters, the IRS won’t be very happy!  Beyond that, the IRS has several avenues it can pursue. 

In extreme situations, such as where a taxpayer owes a considerable sum of money and has not filed for several years, the IRS may consider pursuing criminal liability under I.R.C. § 7203, which makes it a misdemeanor to “willfully” fail to file a Federal Income Tax Return.  This is rarely applied unless a pattern of three consecutive non-filing years are present, but potentially any single willful failure to file could result in this prosecution.  There is a six-year statue of ...

In an article published in Pennsylvania CPA Journal / CPA Now on November 16, 2020, Chamberlain Hrdlicka Philadelphia-based Shareholder Phil Karter discusses what you need to know about the IRS audit process.

“Despite the generally low rates of audits, the IRS tends to gravitate toward certain hot button issues that can increase the chances of instigating an examination,” explains Karter. “These include unreported income (especially where there is nondisclosure of foreign assets), excessive business tax deductions (particularly for Schedule C businesses), loss ...

People are always asking how long the IRS can wait from the time you file your return to conduct an audit of your income and expenses.  The simple, most definitive answer is "it all depends," so let's take a look at the rules. 

            The time in which the IRS must conduct its audit is governed by what's known as a "statute of limitations."  That statute doesn't begin to run until you actually file a return.  Once you file a return, the IRS has three years from the time the return was filed (or, April 15th of the year in which you file, if it is filed early) to conduct and complete an audit.  That means that the IRS ...

Categories: Tax Procedure

Chamberlain Hrdlicka's Annual Tax and Business Planning Seminar is going VIRTUAL for 2020!

Our three-day webinar will feature attorneys from our Atlanta, Houston, Philadelphia, and San Antonio offices presenting today's most timely Tax and Business Planning topics.

Dates and Times:

  • Tuesday, November 10 from 1:00-4:30 p.m. CST
  • Wednesday, November 11 and Thursday, November 12 from 12:00 - 4:30 p.m. CST

Cost: $20 per day or $50/3 days

To request a financial hardship discount, a written request should be sent by email to Chamberlain Hrdlicka at firm@chamberlainlaw.com.

CLE and ...

As we enter the final stretch of 2020, certain windows of opportunity are closing for many clients to lawfully reduce their taxes or obtain cash refunds of taxes paid.  Here we focus on a big and soon-expiring opportunity for clients with heavily distressed assets or investments, and in net loss situations for 2020, which is all-too-common in the midst of Covid-19. 

The opportunity, which is unique to 2020 and thus requires immediate attention, involves triggering losses in a manner to achieve ordinary loss treatment.  Triggering losses at year-end is an annual ritual for many ...

The IRS wants you to be entertained – in a twisted sort of way. The deductibility of employer expenses around entertainment, amusement, recreation, or qualified transportation fringes has a long history that most people would not find very entertaining. Just when many of us thought we understood what an employer could or could not deduct under Internal Revenue Code Section 274, the Tax Jobs and Creations Act of 2017, made the entertainment’s plot change dramatically. The boring documentary suddenly became a bit of a horror picture.

With those caveats, if you read no further ...

Categories: Tax Legislation

The Tax Cuts & Jobs Act (TCJA) includes Internal Revenue Code Section 67(g) which on its face suspends all miscellaneous itemized deductions for any taxable year beginning after December 31, 2017, and before January 1, 2026. But not all deductions are “miscellaneous itemized deductions” and thus some deductions are unaffected by new Section 67(g). When Congress enacted the TCJA in December 2017, many practitioners urged Treasury to clarify that the Act’s suspension of miscellaneous itemized deductions did not impact the ability of trusts and estates to deduct ...

As discussed in an earlier Chamberlain Tax Blawg, on August 28 Treasury issued Notice 2020-65 which defers the due date for withholding, deposit and payment of employee-side taxes imposed under Section 3101(a) (FICA) and corresponding taxes under Section 3201 (RRT).  Since the issuance of this Notice, there has been much commentary – in addition to consternation and hand-wringing on the part of clients – about a multitude of issues the Notice implicates. 

On September 8, the Texas Society of Certified Public Accountants added to this chorus with a comment letter to Treasury and ...

Categories: Tax Legislation