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Tax Blawg

Tax Talk Blog for Tax Pros

Welcome to TaxBlawg, a blog 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.

Tax practitioners have previously lacked 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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On August 11, 2011, TIGTA published a report entitled ‘”Efforts to Address the Compliance Risk of Underreporting of S Corporation Officers' Compensation are Increasing, but More Action Can Be Taken.”  At the outset, TIGTA properly identified part of the problem:  there are S corporations – some owned by one individual and others owned by groups – where the officers perform work and do not pay themselves compensation. 

The S corporation is a “pass through,” so that its income would be passed through and be reported by the Officer.  However, this technique has the effect of ...

The undersigned has been practicing in the United States Tax Court since May 1971, and has seen many changes, such as the evolution of the very simple Tax Court Rules of Practice during 1973 into the Tax Court Rules of Practice and Procedure when the Court added provisions with regard to summary judgment as well as discovery.  The Tax Court, and its predecessor – the Bureau of Tax Appeals, were originally created to give taxpayers the opportunity to challenge determinations of deficiencies in taxes, and occasionally secure overpayments when in fact they were appropriate.  Over time ...

When the IRS reaches (in the words of Tax Court Judge Mark Holmes) the “we're taking your stuff” stage to collect back-taxes, taxpayers generally have the right to a collection due process (CDP) hearing at which a CDP hearings officer is duty-bound to independently and genuinely evaluate whether it’s proper for the IRS to move forward with seizing a taxpayer’s property.  On May 20, 2021, the Tax Court, in Mason v. Commissioner, concluded the IRS had abused its discretion in the CDP process when it gave the green-light to the IRS collection division to take the taxpayer’s stuff ...

London’s Underground (which is a subway to us Yanks) is known for its iconic warnings to “mind the gap.”  That’s the spatial crevice between the train and the station platform.  In D.C., a different gap is garnering attention: the tax gap.  This is the delta between taxes owed to the government and actually paid.

On May 20, 2021, as part of the Administration’s pitch for an $80 billion increase in IRS funding, Treasury released a report that outlines the magnitude and categorical causes of the tax gap, and in broad strokes how it would deploy the $80 billion over a 10-year period to ...

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 ...

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

On Friday, in response to an August 8, 2020 Presidential Memorandum, 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). This deferral is effective September 1!

No doubt this Notice will be the subject of fierce political debate. The day of the Notice’s release, Congressman Don Beyer of Virginia fired a first shot across the bow. In a press release, the Congressman accused the deferral of being a “gimmick” that “could hit ...

Last week, the Fifth Circuit in Matter of Diaz invalided a bankruptcy court rule that would have required that taxpayers make available to creditors any current or projected tax refund in excess of $2,000.  Docket No. 19-50982 (5th Cir., Aug. 26, 2020).

The perfect storm is developing for this issue to affect a growing number of taxpayers.  Due to the economic downturn during the Coronavirus pandemic, a record number of bankruptcies is anticipated.  Also expected is a potentially unprecedented number of tax refunds as a result of the Coronavirus Aid, Relief, and Economic Security ...

Categories: COVID-19, Tax Relief

On August 24, the IRS issued an internal memorandum that impacts when taxpayers may obtain IRS Appeals Conferences if their issues are designated for litigation.  As background, the IRS has a long-standing policy of permitting taxpayers an administrative-level review of audit adjustments by referring matters to its Office of Appeals.  For decades, this review process was discretionary for the IRS to offer.  It was a matter of administrative grace.  No longer.

Enter The Taxpayer First Act

In July 2019, Congress enacted The Taxpayer First Act which codified the Appeals Office (with a new ...

Have you ever played darts?  Where the dart hits the board is very important to your score, but some rookies are happy if their dart hits the board at all.  That would be a fair characterization of The Inspector General for Tax Administration’s (“TIGTA”) January 21, 2020 report entitled “IRS Should Better Identify Noncompliant Exempt Orgs.”

In this report, TIGTA is very much like a rookie darts player, who declares himself a winner because his first dart hit the board.  In this regard, the Report is accurate about one thing:  the IRS does have problems identifying non-compliant ...