Federal
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June 28, 2024
IRS Whistleblower Office Overhaul In Process, Chief Says
The Internal Revenue Service is working through initiatives to improve its whistleblower program that were laid out in the agency's strategic operating plan, including improving systems and processes and drastically increasing staffing, the director of the agency's Whistleblower Office said Friday.
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June 28, 2024
NY Law Firm Botched Gas Co. Sale, Ex-Client Says
Albany, New York-based Whiteman Osterman & Hanna LLP is facing a lawsuit in New York federal court alleging it failed to properly structure the sale of a gas company and caused its owner to incur an avoidable tax liability.
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June 28, 2024
IRS Reminds Marijuana Businesses They Can't Get Tax Breaks
The Internal Revenue Service sought to remind taxpayers Friday that businesses selling marijuana, even in states where it's legal, are not entitled to federal tax deductions, saying some taxpayers are filing invalid claims for refunds through amended returns.
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June 28, 2024
Chevron Ruling No Sea Change For Tax Court, Judge Says
The U.S. Tax Court will continue to rely on the IRS and Treasury's expertise in the tax code following the U.S. Supreme Court's landmark decision to overturn the 40-year-old Chevron doctrine that directed courts to defer to federal agencies' interpretations of ambiguous law, a judge said Friday.
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June 28, 2024
Spouse's Prenup Payments Count As Income, IRS Says
Support payments to a taxpayer from a former spouse made before they officially divorce constitute alimony and should be included in the taxpayer's gross income, the Internal Revenue Service said in a private letter ruling released Friday.
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June 28, 2024
IRS Revokes Variable Annuity Ruling From 2014
The IRS revoked part of a 2014 private letter ruling regarding an annuity option with variable payments that a taxpayer had planned to offer, saying in a ruling released Friday that it no longer agreed with its former position.
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June 28, 2024
Taxation With Representation: Kirkland, Vinson, Skadden
In this week's Taxation with Representation, Aareal Bank AG and Advent International sell a property management and maintenance software company, Webtoon Entertainment Inc. and Tamboran Resources Corp. price initial public offerings, SM Energy Company acquires oil and gas assets, and Nokia sells Alcatel Submarine Networks to the French state.
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June 28, 2024
Estate Owes $4.9M For Son-Of-Boss Scheme, US Says
An estate owes $4.9 million in tax liabilities for a couple's scheme to artificially cancel out their capital gains, the federal government said in a complaint in Michigan federal court, arguing that the Son-of-Boss scheme constitutes fraud and its proceeds aren't entitled to bankruptcy protection.
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June 28, 2024
Weekly Internal Revenue Bulletin
The Internal Revenue Service's weekly bulletin, issued Friday, included an extension of the penalty relief for entities that fail to make estimated quarterly payments of the corporate alternative minimum tax.
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June 28, 2024
Supreme Court Strikes Down Chevron Deference
The U.S. Supreme Court on Friday overturned a decades-old precedent that instructed judges about when they could defer to federal agencies' interpretations of law in rulemaking, depriving courts of a commonly used analytic tool and leaving lots of questions about what comes next.
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June 27, 2024
Biden, Trump Spar Over Fate Of 2017 Tax Cuts In 1st Debate
President Joe Biden and former President Donald Trump debated the GOP's 2017 tax policy overhaul Thursday night, with Trump praising its economic benefits and Biden criticizing the tax cuts for favoring the wealthy and increasing federal deficits.
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June 27, 2024
IRS To Offer Combined Filing For Energy Investment Credits
The Internal Revenue Service will let clean energy project owners that are claiming investment tax credits for more than 200 facilities file the claims with a single form, an agency official said Thursday.
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June 27, 2024
Corp. Tax Cuts Worsen Racial, Income Inequality, Report Says
In the first year of a corporate tax break, white U.S. households receive 88% of the benefits while Black and Hispanic households each receive just 1%, according to a study published Thursday by the Institute on Taxation and Economic Policy and an advocacy organization.
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June 27, 2024
TurboTax Maker Wipes Out 2 Of 3 Software Patents At PTAB
The Patent Trial and Appeal Board delivered a mixed bag of decisions in patent challenges brought by Intuit against a small software outfit that claims to have invented the idea of "co-browsing."
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June 27, 2024
High Response To IRS Transfer Pricing Letters, Official Says
Most taxpayers that received letters from the Internal Revenue Service pursuant to a compliance campaign warning them of a transfer pricing issue have responded, an IRS official said Thursday.
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June 27, 2024
Congress Shouldn't Rush OECD Tax Package, Group Says
Congress should avoid "rubber-stamping" the two pillars of the Organization for Economic Cooperation and Development's plan to fight tax base erosion and profit shifting and instead gather more information on its impact on the U.S., a conservative advocacy group said Thursday.
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June 27, 2024
IRS Criminal Chief Says COVID Fraud Work To Hold Steady
IRS Criminal Investigation agents expect to spend as much time this year on coronavirus assistance policy-related fraud as last year, the division chief said at a conference Thursday.
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June 27, 2024
IRS Tells 10th Circ. To Deny Liberty Global's $110M Refund Bid
The U.S. government urged the Tenth Circuit on Thursday to reject telecommunication giant Liberty Global's push for a $110 million tax refund, arguing a lower court correctly deduced that the company's business restructurings were carried out solely to avoid tax.
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June 27, 2024
$2.1B Danish Tax Fraud Suspect Won't Testify, Court Says
A New York federal court denied dueling requests from U.S. pension plan investors accused of participating in a $2.1 billion Danish tax fraud scheme and from Denmark's tax agency to bring in the man that both sides say masterminded the scheme, or to bring in one of his employees.
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June 27, 2024
Ex-Skadden Tax Head And M&A Pro Joins Freshfields In NY
Freshfields Bruckhaus Deringer LLP has added the former head of the tax practice at Skadden Arps Slate Meagher & Flom LLP as a partner this week, who brings to the role experience in deals like 21st Century Fox's $71 billion acquisition by Disney and the merger of T-Mobile and Sprint.
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June 27, 2024
TIGTA Points To Areas Of Improvement For Direct File
A phase of the Direct File pilot program that allowed eligible IRS employees to get the first crack at the online tax filing service had issues with accuracy of its tax returns and lacked a Spanish translation, the Treasury Inspector General for Tax Administration said Thursday.
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June 27, 2024
New FATCA Deal Requires US Banks To Share Info With Swiss
The United States and Switzerland signed a Foreign Account Tax Compliance Act agreement that will require U.S. banks to share financial account information on a bilateral basis, Switzerland's Federal Department of Finance announced Thursday.
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June 27, 2024
IRS Delays Tax Deadlines In Miss. After April Storms
Certain Mississippi taxpayers affected by storms, tornadoes and flooding that hit the state starting April 8 now have until Nov. 1 to file individual and business tax returns and make payments, the Internal Revenue Service said Thursday.
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June 26, 2024
Repatriation Tax Ruling May Sway State Wealth Tax Debates
The U.S. Supreme Court's upholding of the federal repatriation tax could indirectly affect state tax policy discussions, including by influencing consideration of wealth taxes and encouraging states to keep potential due process issues in mind when enacting tax legislation.
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June 26, 2024
Tax Court Says Couple Wrongly Claimed Unsigned Checks
A Minnesota eye doctor and his wife overstated their income on their joint tax return, as they declared pay that they never actually received from their corporation in the form of unsigned checks, the U.S. Tax Court said in an opinion released Wednesday.
Expert Analysis
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How Cities Can Tackle Post-Pandemic Budgeting Dilemmas
Due to increasing office vacancies around the country, cities may consider politically unpopular actions to avoid bankruptcy, but they could also look to the capital markets to ride out the current real estate crisis and achieve debt service savings to help balance their budgets, say attorneys at Cadwalader.
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Guidance Adds Clarity To Energy Communities Bonus Credits
Recent IRS guidance on the Inflation Reduction Act's changes to tax credits for renewable energy projects offers much-needed pointers for developers and financing parties, and should allow them to more comfortably incorporate special bonus credits for projects in energy communities into their transactions, say Jorge Medina and Ira Aghai at Shearman.
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Taxing The Digital Economy: The Good, The Bad And The Ugly
U.S. tech companies should watch for important developments in international taxation, including the resolution of Apple's decade-old state aid case, growing frustration with the Organization for Economic Cooperation and Development's global tax plan and adoption of the digital services tax instead, says Joyce Beebe at Rice University's Baker Institute for Public Policy.
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Big Tax Changes For Multinational Cos. In Budget Proposal
The Biden administration’s fiscal year 2024 budget proposes changes that would materially alter decades-old Internal Revenue Code provisions, requiring a shift in multinational corporations' tax planning strategies comparable to that required after enactment of the Tax Cuts and Jobs Act, say Xenia Garofalo and Kyle Colonna at Eversheds Sutherland.
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SVB Collapse Reinvigorates Bank Accounting Debate
Silicon Valley Bank's sudden collapse revives questions over whether fair value or amortized cost accounting is the most appropriate for banks' financial reporting — a controversy that's crucial for understanding what information could have helped market participants better understand SVB's financial condition, say consultants at Analysis Group.
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Brownfield Renewables Guidance Leaves Site Eligibility Murky
Recent IRS guidance sheds some light on the Inflation Reduction Act's incentives for renewable energy development on contaminated sites — but the eligibility of certain sites for brownfield status remains uncertain, say Megan Caldwell and Jon Micah Goeller at Husch Blackwell.
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Get Ready For IRS Criminal Crackdown On Crypto
Recent developments at the IRS, from a new operating plan to the announcement of a centralized data center, signal that the agency is ramping up criminal enforcement against those using digital assets to evade tax liabilities — and given its high conviction rate, companies and individuals must prioritize compliance, say attorneys at BakerHostetler.
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NFT Tax Guidance Shows IRS Interest In Crypto Enforcement
The IRS' first ever guidance addressing the federal income tax treatment of NFTs indicates the agency could take a potentially aggressive stance in enforcing U.S. tax laws in the NFT and crypto spaces, which could have a significant impact on the self-directed IRA market, say attorneys at BakerHostetler.
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Substantiation Is Key When Gifting Crypto To Charity
A recent Internal Revenue Service memorandum makes clear that the agency will require substantiation when gifting cryptocurrency to charity, even for relatively small amounts, so donors need to be aware of the important differences between crypto and typical cash donations, says Sheryl Morrison at Lathrop GPM.
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Senate Credit Suisse Report Puts Attention On Banks, Trusts
The Senate Finance Committee's recent finding that Credit Suisse violated a plea agreement struck over its role in enabling offshore tax evasion has important ramifications for banks and trusts, including how they onboard, document and report on transactions relevant to U.S. reporting requirements, say Will Barry and Ian Herbert at Miller & Chevalier.
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Seeking IRS Accountability For Faulty Microcaptive Notice
Like the taxpayers in Standard Insurances v. U.S. seeking to expand earlier wins in microcaptive insurance cases that limit IRS use of improperly obtained information, others should consider ways to hold the agency accountable and provide incentive for it to follow the law going forward, says Joshua Smeltzer at Gray Reed.
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Biden Admin. Proposals Both Encourage And Thwart EV Adoption
While the Biden administration has been aggressively focused on promoting electric vehicles from the start, its recently issued guidance on EV tax credits and its restrictive new auto emissions proposal create a sense of implementation whiplash that may frustrate manufacturers and consumers, says Levi McAllister at Morgan Lewis.
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Heed PCAOB's Warning On Proof-Of-Reserves Reports
While directed at investors, the Public Company Accounting Oversight Board's recent advisory on proof-of-reserves reports is a timely and stark warning to crypto entities, as well as their customers and accounting firms, to tread carefully in their reliance on these reports as proof of financial stability, say Patrick Bryan and Deborah Meshulam at DLA Piper.