Federal
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June 24, 2024
Billionaire Drops Case Against IRS Over Tax Info Leak
Billionaire hedge fund founder Ken Griffin dropped his case Monday seeking to hold the IRS accountable for the leak of his tax return information in a data breach that affected thousands of wealthy and powerful taxpayers, including former President Donald Trump.
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June 24, 2024
Tax Court Rejects Collection Appeal Over Amended Return
An IRS agent did not abuse his discretion when he didn't consider a supposed amended tax return that a Rhode Island woman said would lower her tax liability and therefore a proposed installment agreement amount, the U.S. Tax Court said Monday.
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June 24, 2024
Illinois, Other States Back FTC Bid To Affirm Intuit Ad Ruling
Illinois, along with 20 other states and the District of Columbia, defended the Federal Trade Commission in tax software giant Intuit's Fifth Circuit constitutional challenge to the agency's findings that the company engaged in deceptive advertising, saying in an amicus brief that the FTC's conclusion was correct.
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June 24, 2024
Ex-Chicago Alderman Gets Two Years For Boosting Law Firm
An Illinois federal judge on Monday sentenced former Chicago Alderman Ed Burke to two years in prison and fined him $2 million for using his official position to steer tax business to his personal law firm, closing what prosecutors called "another sordid chapter" in the city's history of public corruption.
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June 24, 2024
Better Digital Tax Ban In Pillar 1 Treaty, Treasury Official Says
The final text of a multilateral convention to implement the OECD-designed taxing rights overhaul will include improved language to eliminate existing digital services tax and prohibit prospective ones, a U.S. Treasury Department official said Monday.
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June 24, 2024
Tax Preparers Win Recommendation For Class Cert. In OT Suit
A group of tax preparers have met the requirements to form a class in a suit accusing their former employer of failing to pay overtime, a New York federal magistrate judge said, rejecting the employer's argument that their request for class status came too late.
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June 24, 2024
IRS Finalizes Limits To Partnership Conservation Easements
The Internal Revenue Service finalized rules Monday that curb the conservation easement tax deduction claimed by certain partnerships, with some changes to last year's proposed version, such as limiting the opportunity for entities to adjust their tax returns to avoid the new restrictions.
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June 24, 2024
Loss Guidance Will Cover Pillar 2, IRS Official Says
Forthcoming guidance to address U.S. tax issues with dual consolidated losses will also include language advising taxpayers how to account for those losses under the Pillar Two global minimum tax, the IRS' top international tax counsel said Monday.
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June 24, 2024
NJ Tax Evader's Wife Owes IRS, Too, Tax Court Rules
A New Jersey woman owes more than $125,000 in taxes jointly with her husband, the U.S. Tax Court ruled Monday, saying she should have questioned the returns her husband prepared for her signature after he pled guilty to tax evasion and bribery.
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June 24, 2024
Julie Chrisley To Be Resentenced, But Convictions Stand
The Eleventh Circuit on Friday upheld the tax evasion and fraud convictions of former reality TV stars Todd and Julie Chrisley, but ordered a Georgia federal judge to resentence Julie Chrisley after finding that the judge failed to fully explore her discrete role in the $36 million scheme.
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June 24, 2024
Supreme Court Won't Review Tax Challenge Deadline
The U.S. Supreme Court declined Monday to review a Third Circuit finding that the U.S. Tax Court's 90-day deadline for filing challenges to tax bills isn't hard and fast.
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June 24, 2024
4th Circ. Affirms Nix Of $1.2M R&D Credit For Biotech Co.
A biotechnology company that claimed tax credits for increasing its scientific research was correctly denied about $1.2 million of its request, the Fourth Circuit ruled Monday in upholding a U.S. Tax Court decision that found the company was wrongly counting research expenses twice.
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June 24, 2024
IRS Assessment Of $10M Earner Audits Faulty, TIGTA Says
The Internal Revenue Service says it is rolling back its audits of returns claiming at least $10 million in income because it found them unproductive, but the Treasury Inspector General for Tax Administration said Monday that that is not true in every case.
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June 24, 2024
OECD Tax Plan Issues Still Being Hashed Out, US Official Says
Both the global minimum corporate tax and taxing rights overhaul plans designed by the Organization for Economic Cooperation and Development have outstanding issues that stakeholders are attempting to resolve, a U.S. Treasury Department official said at a conference Monday.
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June 24, 2024
Justices To Review If Ch. 7 Trustee Can Recover Tax Payments
The U.S. Supreme Court said Monday it would review a Tenth Circuit decision that found that the Chapter 7 bankruptcy trustee of a defunct Utah company could recover $145,000 in tax payments from the IRS.
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June 21, 2024
Supreme Court Leaves Lifeline For Billionaire Income Tax
The U.S. Supreme Court narrowed but did not entirely block the path to billionaire income tax legislation when the majority's opinion declined to weigh constitutional questions about taxing unrealized gains in its decision to uphold a mandatory repatriation levy.
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June 21, 2024
Fed. Circ. Backs Subsidy Duties For Canadian Wind Towers
A Canadian wind tower manufacturer can't get a break on countervailing duties despite being upfront about errors in its sales data, with the Federal Circuit ruling Friday that the errors raise the possibility of additional mistakes.
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June 21, 2024
IRS Urges 6th Circ. To Back Gold Broker's $3M Tax Bill
The Sixth Circuit should uphold about $3 million in tax liabilities against a self-employed gold and silver broker who failed to file returns for a decade, the IRS argued Friday, calling "frivolous" the man's argument that he isn't subject to federal income taxes.
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June 21, 2024
Couple Can't Hide Behind Preparer's Errors, Tax Court Says
A Georgia couple failed to show the U.S. Tax Court that their faulty filing was the result of trusting a competent tax adviser, leading the court to rule Friday that they were correctly assessed an accuracy-related penalty by the Internal Revenue Service.
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June 21, 2024
US Formally Suspends Part Of Tax Treaty With Russia
The U.S. government has provided formal notice to Russia suspending, via mutual agreement, parts of the countries' double-taxation treaty.
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June 21, 2024
Ayahuasca Church Is Not Tax-Exempt, DC Circ. Affirms
An Iowa church that used a psychedelic drug in its rites was correctly denied tax-exempt status, the D.C. Circuit affirmed Friday, saying the church's main purpose is using a federally illegal drug for which it lacked approval for religious use.
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June 21, 2024
Ex-Chicago Alderman Burke Can't Delay Sentencing
Former Chicago Alderman Ed Burke can't postpone his Monday sentencing on charges of racketeering, extortion and bribery to await a U.S. Supreme Court ruling on the scope of federal bribery law, an Illinois federal judge ruled Friday, saying that decision will have "little or no impact" on Burke's fate.
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June 21, 2024
Ex-Mass. Pol Hit With New Charges In COVID Fraud Case
A former Massachusetts state senator already accused of pandemic-related fraud has been charged alongside his sister with attempting to cover up a scheme to make him eligible for unemployment benefits, the U.S. attorney's office announced Friday.
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June 21, 2024
IRS Has Spent $5.7B Of 2022 Funding Boost, TIGTA Finds
The Internal Revenue Service has spent $5.7 billion of the funding boost it received under the 2022 climate law as of March 31, including $2 billion to supplement its annual funding, the Treasury Inspector General for Tax Administration reported Friday.
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June 21, 2024
11th Circ. Says Couple Can't Renew Fight Over S Corp. Income
A couple owe about $355,000 in back taxes after failing to prove that the U.S. Tax Court adopted an erroneous calculation by the IRS following a trial in which the couple were found liable for unreported income from their S corporation, the Eleventh Circuit ruled.
Expert Analysis
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Stock Buyback Excise Tax Guidance A Mixed Bag For SPACs
Recent IRS guidance on the new stock repurchase excise tax includes a welcome exception for publicly traded special-purpose acquisition companies but does not exclude redemptions in connection with a de-SPAC transaction, and further guidance is needed to clarify ambiguities around the exception's application, say Olga Bogush and Evgeny Magidenko at ArentFox Schiff.
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Crypto Coverage After FTX Fall: Accountant And Atty Liability
The recent fall of cryptocurrency firm FTX highlights complexities regarding accounting and tax reporting for digital assets, and reveals lawyers’ potential liability exposure when providing services to crypto firms — as a result, insurers may face unintended vulnerabilities related to this nebulous landscape, say Anjali Das and Farzana Ahmed at Wilson Elser.
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The Forces Defining Sales Tax Policy And Compliance In 2023
In the coming year, expect to see tax policymakers grapple with the complexity of state and local tax compliance, cryptocurrency, metaverse transactions, and more, says Scott Peterson at Avalara.
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Inflation Reduction Act's Methane Tax May Be Unenforceable
Recent legislation directs the U.S. Environmental Protection Agency to impose a first-ever direct charge on methane emissions from oil and gas operations — but two fundamental problems with the formula for calculating this tax could make it impossible for the EPA to implement, say Poe Leggette and Bailey Bridges at BakerHostetler.
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Atty-Client Privilege Arguments Give Justices A Moving Target
Recent oral arguments before the U.S. Supreme Court in a case regarding the scope of the attorney-client privilege appeared to raise more questions about multipurpose counsel communications than they answered, as the parties presented shifting iterations of a predictable, easily applied test for evaluating the communications' purpose, say Trey Bourn and Thomas DiStanislao at Butler Snow.
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Industry Takeaways From IRS Guidance On EV Tax Credits
The IRS and U.S. Department of the Treasury’s recently issued documents on tax credit eligibility for clean vehicle purchases showcases three important points for the electric vehicle industry, including emphasis on the importance of in-service dates, guidance on how leased vehicles could be evaluated, and insight into manufacturing requirements, says Levi McAllister at Morgan Lewis.
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States Must Align Distribution Age Rules With Secure 2.0
To prevent unintended escheatment of retirement benefits, states will need to undertake legislative efforts to amend unclaimed property standards that conflict with the Secure 2.0 Act's required minimum distribution age increases, says Michael Giovannini at Alston & Bird.
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The IRS' APA Rulemaking Journey: There And Back Again
Attorneys at Dentons examine recent challenges in which taxpayers successfully argued Internal Revenue Service rulemaking was invalid under the Administrative Procedure Act, how tax exceptionalism and U.S. Supreme Court regulatory deference prompted such challenges, and similar challenges the agency will likely face following this line of cases.
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Tax Court Ruling Should Allay Post-Boechler Concerns
An unusually long U.S. Tax Court ruling in Hallmark Research Collective v. Commissioner, confirming that deficiency deadlines are jurisdictional, should reassure practitioners concerned about the statutory time limit implications of last year's U.S. Supreme Court Boechler v. Commissioner ruling and reaffirm the vital role of the Tax Court itself, says James Creech at Baker Tilly.
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Unpacking The Interim Guidance On New Stock Buyback Tax
The U.S. Department of the Treasury and Internal Revenue Service's recent notice on applying the newly effective excise tax on stock repurchases provides much-needed clarity on the tax's scope, which is much broader than anticipated given its underlying policy rationale, say attorneys at Eversheds Sutherland.
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The Cryptocurrency Law And Policy Outlook For 2023
The digital asset sector saw significant losses in 2022, amid a continuing lack of guidance about how such assets should be taxed, but new government regulation, growing participation by traditional financial players and other factors should spur recovery in the coming year, says Joshua Smeltzer at Gray Reed.
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IRS Will Use New Resources To Increase Scrutiny In 2023
The new year promises to be a busy one for the Internal Revenue Service, which is poised to apply the boost in funding provided by the Inflation Reduction Act to bolster and expand its enforcement capability, and there are four areas to watch, say attorneys at Skadden.
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How Cos. Can Prep For Alcohol Beverage Excise Tax Changes
The Craft Beverage Modernization Act will soon undergo a transition in administration to the Alcohol and Tobacco Tax and Trade Bureau, and importers or producers should address any issues that may arise under the act, such as foreign producers not being familiar with the mechanics of the TTB, say Louis Terminello and Bradley Berkman at Greenspoon Marder.