Tax Blog

For more than three-quarters of a century, the IRS has had some form of a Voluntary Disclosure Program.  These programs have invited non-compliant taxpayers who have willfully cheated the government to make amends and come back into compliance.  In return, the taxpayer benefits from reduced penalties and non-prosecution in return for self-reporting.  On August 25, 2026, the IRS Criminal Investigation Chief announced that the IRS would release within the next 60 days a new version of the Voluntary Disclosure Program.  That announcement has been long awaited and sorely needed.

The ...

1.  I filed my ERC refund claim many years ago but have never heard from the IRS, what do I do?

You should start by obtaining your IRS transcript.  The transcript will help you confirm that the IRS received your claim, and whether you might have missed correspondence from the IRS about it.  Once you have confirmed that the IRS has your claim but has taken no action, you can contact the Taxpayer Advocate Service or your Congressman to facilitate pushing your claim forward. The Taxpayer Advocate Service is an independent organization within the IRS that assigns advocates to Taxpayers.

2.  The IRS ...

The Internal Revenue Code permits businesses to deduct their ordinary and necessary businesses expenses, including “a reasonable allowance for salaries or other compensation for personal services actually rendered.” I.R.C. § 162(a)(1). The compensation must be “reasonable” and “purely for services.” Treas. Reg. § 1.162-7(a). For C-corporation shareholders, especially those in closely held businesses, the double-layer of taxation, effective income tax rates, preferential dividend rates, and other considerations create tension between whether to treat ...

As discussed in-depth in a previous post, there is an ongoing fight between the Tax Court and the IRS over whether the penalties imposed under IRC § 6038 for failing to comply with international reporting requirements relating to foreign assets actually have any real teeth. Essentially, the dispute centers on whether these penalties are “immediately assessable” – i.e. whether the IRS can assess the penalty without first having to obtain a court judgment.  That assessment, in turn, records a taxpayer’s liability and triggers the broad collection powers of the IRS, raising ...

On April 21, 2026, a divided panel of the Tenth Circuit issued the first appellate decision regarding the "relevance" threshold in the codified economic substance doctrine under Section 7701(o).  In Liberty Global v. United States, the Court affirmed the U.S. District Court for the District of Colorado’s ruling that the codified economic substance doctrine was relevant to the transactions at issue (Project Soy) and that the transactions lack economic substance because they served no substantial nontax purpose despite the transactions complying with the mechanics of the ...

Under section 41 of the Internal Revenue Code, certain taxpayers are eligible to claim a credit for expenses incurred for the performance of qualified research and development activities. Although the research credit is not limited to specific industries or types of taxpayers, taxpayers in manufacturing, information technology, and professional, scientific, and technical services are often the main beneficiaries of this credit.

US-based taxpayers who meet the following four-part test may be eligible for the credit. First, the business component test requires that the ...

In the One, Big, Beautiful Bill Act (“OBBBA”), Congress accelerated the termination of the clean electricity production credit provided in Section 45Y and the clean electricity investment credit under Section 48E.  On July 7, 2025, President Trump issued Executive Order 14315 in which he instructed the Secretary of the Treasury to issue guidance related to the termination of the clean electricity credits to prevent the artificial acceleration or manipulation of the eligibility requirements and restrict the use of safe harbors to only situations in which a substantial ...

Effective January 14, 2025, the Treasury Department issued final regulations requiring disclosures by certain taxpayers and material advisors involved in a micro-captive listed transaction or transaction of interest. The original due date for making initial disclosures was April 14, 2025, but the IRS provided relief from penalties if such initial disclosures are filed by July 31, 2025. However, such taxpayers and material advisors may have to disclose the transaction if the statute of limitations for an original or amended tax return did not end on or before January 14, 2025.

Members of our Tax Controversy & Litigation practice filed comments last week on the proposed regulations published July 2, 2024, regarding the Employee Retention Credits. They argued that these proposed regulations exceed the IRS and Treasury authority. They also urged these bodies to abandon the current proposed regulations as they relate to the ERC, and to reconsider the appropriateness of the final regulations treating excessive ERC refunds as underpayments of tax, particularly in light of the Supreme Court's recent decision in Loper Bright Enterprises v. Raimondo. 

Read ...

IRS ERC ANNOUNCEMENT (IR-2024-169, June 20, 2024) - Following a lengthy review of numerous Employee Retention Credit ("ERC") claims, the IRS has announced plans to deny tens of thousands of “improper high-risk ERC claims” (about 10-20% of total ERCs) while starting a new round of processing lower-risk claims to help eligible taxpayers. During the review period, the IRS processed 28,000 claims worth $2.2 billion and disallowed more than 14,000 claims worth more than $1 billion. Various estimates of total ERC claims have exceeded $240 billion.

The IRS' review involved months ...