Federal
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May 15, 2024
Pension Plan Segment Rates Increase In May
Segment rates for calculating pension plan funding rose in May, the Internal Revenue Service said Wednesday.
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May 15, 2024
IRS Working To Prevent Child Support Collection Disruption
The Internal Revenue Service is working to prevent disruption of federal tax refund offsets — including garnishment for owed child support — affecting Native American tribal governments and other taxpayers, the agency said.
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May 14, 2024
Northwestern Settles Tax Law Prof's Age Bias Suit
Northwestern University agreed to settle a law school professor's age bias suit filed in Illinois federal court claiming he was given smaller raises year-over-year in comparison with his younger colleagues after he cast aside the institution's push for him to retire early.
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May 14, 2024
Law Prof Comes To Treasury's Aid In 3M Transfer Pricing Fight
The U.S. Department of the Treasury did not act arbitrarily when it wrote transfer pricing regulations that allowed the government to disregard foreign legal restrictions on royalty payments when allocating income to 3M from an affiliate, a law professor told the Eighth Circuit on Tuesday.
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May 14, 2024
Yellen, Werfel Urged To Make E-Filing Program Permanent
The Internal Revenue Service's pilot program for free electronic tax return filing should be made permanent and grown, a coalition of groups that endorse the project told IRS Commissioner Daniel Werfel and Treasury Secretary Janet Yellen in a letter Tuesday.
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May 14, 2024
Billionaire's Pilot Cops To Tax Count, Avoids Insider Trial
A pilot from Virginia accused of profiting from stock tips fed to him by British billionaire Joe Lewis on Tuesday copped to dodging taxes on $500,000 of income from Lewis' company, in a plea deal that avoids an insider trading trial.
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May 14, 2024
Microsemi Calls IRS' Penalty Approval 'Woefully Inadequate'
An Internal Revenue Service supervisor's sign-off on a transfer pricing penalty for Microsemi was "woefully inadequate" to meet statutory requirements for penalty approval, the semiconductor manufacturer told the U.S. Tax Court.
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May 14, 2024
Ex-Husch Blackwell, Dykema Atty Pleads Guilty To Tax Evasion
A former Husch Blackwell LLP partner who helped launch Dykema Gossett PLLC's Milwaukee office two years ago has agreed to plead guilty in Wisconsin federal court to willfully evading paying income tax, which could land him in prison for over a year and will force him to pay almost $4 million in restitution to the IRS.
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May 14, 2024
Big Refund Filings Could Be Improper, IRS Says
Inaccurate advice from social media, as well as a series of tax scams, has resulted in an increase in questionable, inflated refund claims, the Internal Revenue Service said Tuesday.
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May 14, 2024
ER Doc Can't Deduct His Film Co.'s Costs, 5th Circ. Told
An emergency room doctor with a passion for music was correctly denied business deductions for his unprofitable production company, the IRS told the Ninth Circuit in asking it to uphold a U.S. Tax Court ruling that found the doctor owed more than $59,000 in taxes and penalties.
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May 14, 2024
IRS Floats Property Rule Changes On Interest Capitalization
The Internal Revenue Service floated changes Tuesday to the interest capitalization requirements for improvements constituting property production, including removing the so-called associated property rule that was invalidated by the Federal Circuit.
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May 14, 2024
Ex-Whiteford Taylor Business Co-Chair Joins Baker Donelson
Baker Donelson Bearman Caldwell & Berkowitz PC has welcomed a new shareholder who spent more than a decade with the Internal Revenue Service and previously co-chaired Whiteford Taylor & Preston LLP's business department, the firm announced on Monday.
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May 14, 2024
IRS Finalizes Slash Of Preparer ID Fee
The Internal Revenue Service will reduce the cost to apply for or renew a preparer tax identification number by nearly 50%, the agency said in a final rule released Tuesday.
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May 13, 2024
NJ Fraudster Gets More Prison Time, Owes $6M For Tax Evasion
A New Jersey man who was convicted of dodging taxes on more than $16 million he stole from securities fraud victims was handed a six-year prison sentence — most of which will be served simultaneously with his fraud sentence — and ordered to pay over $6 million in restitution during a Garden State federal court hearing Monday in which he denied the crimes.
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May 13, 2024
Corp. Transparency Act An Overbroad Dragnet, 11th Circ. Told
Congress exceeded its authority in passing the Corporate Transparency Act, which prompted the U.S. Treasury Department to solicit personal information for law enforcement purposes from those that registered and owned state-registered entities, a small-business group told the Eleventh Circuit on Monday.
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May 13, 2024
US Tells DC Circ. Ayahuasca Church's Settlement Inapt
Federal regulators are telling the D.C. Circuit to ignore a recent settlement that will allow a Phoenix-based church to continue using ayahuasca in its ceremonies, saying it has nothing to do with the Iowa-based ayahuasca church challenging the IRS's refusal to give it tax-exempt status.
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May 13, 2024
House GOP Bills Target Foreign Funding To Tax-Exempt Orgs
The House Ways and Means Committee will vote Wednesday on a package of bills that would increase scrutiny of foreign donations to tax-exempt organizations, including legislation that would require those organizations to publicly report the donations, the Joint Committee on Taxation announced Monday.
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May 13, 2024
Biz Coalition Pushes Senate To Renew R&D Tax Break
The U.S. Senate should act quickly to renew a provision allowing research and development expenses to be immediately deductible, a coalition of businesses told the chamber's leaders in a letter Monday.
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May 13, 2024
2nd Circ. Won't Revive UBS Suit Over Disclosed Account Info
The Second Circuit declined Monday to revive a couple's suit accusing UBS of fraudulently flagging an account to the Internal Revenue Service, finding that any alleged harm resulting from an audit would have been caused by the agency itself.
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May 13, 2024
Tax Court Denies Calif. Women Innocent Spouse Relief
A California woman will not receive innocent spouse relief from a tax liability stemming from a joint return filed with her estranged husband, the U.S. Tax Court ruled Monday, saying any reasonable person would have questioned the return's accuracy.
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May 13, 2024
Texas Farming Couple Owe $1.9M, Tax Court Says
An oral surgeon and his wife who raised large deer and bass for hunting and ecotourism in Texas are on the hook for nearly $1.9 million in taxes, as a U.S. Tax Court decision issued Monday found that they weren't entitled to farming deductions.
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May 13, 2024
Energy Credit Program For Low-Income Areas To Open May 28
Applications for a clean-energy investment program that provides bonus tax credits for projects in low-income communities will open May 28, the Internal Revenue Service said Monday.
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May 13, 2024
Tax Lien Association Hires Industry Pro As GC
The National Tax Lien Association has found its new general counsel in an experienced attorney less than four months after the death of its longtime top attorney.
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May 13, 2024
Houston Truck Co. Doesn't Owe $2M Excise Tax, 5th Circ. Told
A Houston truck company that sells tires made by a Chinese manufacturer doesn't owe $2 million in import taxes because it's not legally the tire importer, the company told the Fifth Circuit in asking it to affirm a ruling that could split circuits.
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May 13, 2024
Semisubmersible Co. CEO Convicted Of Fraud, Fleeing Law
The CEO of a semisubmersible manufacturer has been convicted by a Hawaii federal jury of financial fraud, witness tampering and attempting to escape law enforcement in one of his company's ocean vessels.
Expert Analysis
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Unconventional Profits Interest Structures Find New Support
A recent U.S. Tax Court ruling should provide comfort that less-than-plain-vanilla profits interest structures, created to achieve complicated economic arrangements, can succeed in generating more optimal tax outcomes, provided the terms are properly drafted, says Daren Shaver at Hanson Bridgett.
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Roadblocks For Cannabis Employers Setting Up 401(k) Plans
Though the Internal Revenue Code and the Employee Retirement Income Security Act generally allow cannabis businesses to establish 401(k) plans for their employees, companies must still pick their way through uncertainties around tax deductions and recruiting reliable vendors, say attorneys at Shipman & Goodwin.
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How Foreign Info Return Penalty Case May Benefit Taxpayers
The U.S. Tax Court's recent decision that the Internal Revenue Service cannot penalize taxpayers for failing to file foreign corporation information returns may give similarly situated taxpayers an opportunity to also avoid penalties, provided they protect their rights before the decision is overturned or mooted by legislation, say attorneys at Arnold & Porter.
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What's Unique — And What's Not — In Trump Protective Order
A Manhattan judge's recent protective order limiting former President Donald Trump's access to evidence included restrictions uniquely tailored to the defendant, which should remind defense attorneys that it's always a good idea to fight these seemingly standard orders, says Julia Jayne at Jayne Law.
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The Nuts And Bolts Of IRS Domestic Content Tax Credit
Recent IRS guidance provides specifics on how renewable energy projects can qualify for bonus tax credits by meeting U.S. domestic content rules, but also creates a qualification framework that will be complicated for project developers to navigate, say Scott Cockerham and Wolfram Pohl at Orrick.
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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.