Federal
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June 13, 2024
Senate Finance Panel OKs 3 Tax Court Judges, Treasury IG
The Senate Finance Committee overwhelmingly approved Thursday the nominations of three judges for the U.S. Tax Court and a new inspector general for the U.S. Department of the Treasury, a post that has lacked a Senate-confirmed nominee for five years.
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June 13, 2024
Staffing Hurdles Could Slow Impact Of IRS Audit Boost
The Internal Revenue Service's intended ramping up of enforcement on wealthy people, large corporations and complex partnerships may not have a meaningful impact in the short term because of challenges in hiring and training people to do the work.
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June 13, 2024
Easement Deduction Limit Hurts Conservation, 11th Circ. Told
A partnership's tax deduction for its donation of a conservation easement should not be limited to its adjusted basis in the property, the partnership told the Eleventh Circuit in urging it to overturn a U.S. Tax Court decision that it claims will hurt conservation efforts.
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June 13, 2024
A Chronology Of The Hunter Biden Investigation
The story behind President Joe Biden's son Hunter Biden's conviction on federal gun charges started with a gun purchase in 2018, was complicated by a laptop repair in 2019, and could bleed into an upcoming trial on federal tax charges in California in September.
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June 13, 2024
Mo. City Tax Credit Suit Tossed Over Federal Jurisdiction
A federal judge dismissed a Kansas City, Missouri, resident's claims that the city unconstitutionally refused to credit his state income taxes paid to Kansas against his city earnings tax liabilities, ruling that a federal law barred the case from being lodged in federal court.
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June 13, 2024
IRS Extends Corp. AMT Penalty Relief Into August
The Internal Revenue Service will continue to provide penalty relief for entities that fail to make estimated quarterly payments of the corporate alternative minimum tax through Aug. 15, the agency said Thursday.
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June 12, 2024
Senate Budget Chair Seeks End To Carried Interest Tax Break
Lawmakers should end the favorable tax treatment of income from carried interest compared with ordinary earned income, Senate Budget Committee Chairman Sheldon Whitehouse said Wednesday.
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June 12, 2024
Digital Taxes May Take Hold Regardless Of Treaty Signing
An internationally agreed-upon freeze on digital levies may continue to thaw even if countries meet their impending deadline to sign a related treaty for new corporate tax rules, in part because the accord faces a hazy path to formal ratification.
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June 12, 2024
Feds Strike Deal Ending $7M FBAR Penalty Cases
The U.S. government agreed to settle a pair of foreign bank account reporting cases in which it had sought a total of $7 million from a former insurance broker and his wife's estate, according to a court order filed Wednesday in California federal court.
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June 12, 2024
Groups Push Back On Stock Buyback Tax Test's Scope
The U.S. Treasury Department's proposed stock buyback tax rules go too far in trying to assess whether the main purpose of a U.S. subsidiary's funding purchase of its foreign parent's stock is to avoid the tax, two groups said in comments released Wednesday.
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June 12, 2024
St. Louis Atty Urges Acquittal After Tax Avoidance Conviction
A Missouri attorney who was found guilty of participating in a $4 million tax avoidance scheme alongside her father and a North Carolina insurance agent is looking to wipe out the verdict, arguing there wasn't enough evidence to convict.
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June 12, 2024
IRS Nix Of $45M Easement Deduction Invalid, Donor Says
A North Carolina partnership asked the U.S. Tax Court to invalidate an Internal Revenue Service adjustment that slashed its $45.6 million deduction for its donation of a conservation easement, saying the agency failed to follow proper administrative procedures.
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June 12, 2024
Treasury Issued Over $1B In Clean Vehicle Tax Credits
The clean vehicle tax credit of up to $7,500 has saved buyers more than $1 billion in total upfront costs since January, the U.S. Treasury Department announced Wednesday, saying the figures represent a major milestone in lowering transportation costs since the incentive was updated in 2022.
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June 12, 2024
First 'Survivor' Winner Wants $3M Tax Case Tossed
The winner of the first season of the TV series "Survivor" asked a Rhode Island federal court to toss the government's case against him seeking nearly $3.3 million in unpaid taxes, saying the liabilities stem from his flawed criminal conviction for tax evasion nearly 20 years ago.
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June 12, 2024
4 Taxpayer Advocacy Panel Committees To Meet In July
Four Taxpayer Advocacy Panel committees will hold public meetings in July focused on improving customer service at the Internal Revenue Service, the agency announced Wednesday.
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June 11, 2024
SVB Wants A Trial Over Its $605M Tax Bill From IRS
The parent company of failed Silicon Valley Bank has told a New York bankruptcy judge it wants him to decide if it owes the Internal Revenue Service more than $605 million in taxes.
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June 11, 2024
US Issues Sanctions For $50M Guyana Gold Tax Evasion
Two Guyanese businessmen and a Guyanese official were sanctioned by the U.S. Treasury Department on Tuesday after a probe into a corruption scheme that helped the businessmen evade $50 million in gold export taxes that should have been paid to Guyana's government, Treasury said.
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June 11, 2024
Trucks Don't Qualify For $400M Tax Exemption, 6th Circ. Told
A Tennessee company's refurbished trucks do not qualify for the safe harbor from the heavy-truck excise tax and should not be exempt from roughly $400 million in excise taxes, penalties and interest, the U.S. government told the Sixth Circuit.
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June 11, 2024
Aflac Matriarch's Estate Says IRS Missing Info In $11.7M Fight
The Internal Revenue Service's push to recover $11.7 million in deficiencies and penalties from the estate of the matriarch of the family that founded Aflac is predicated on a "mistaken understanding" regarding a trust, the estate told the U.S. Tax Court.
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June 11, 2024
Compliance Costs Outweigh Min. Tax Gains, Biz Reps Say
Multinational businesses are concerned that the burden of complying with the 15% global minimum tax outweighs any potential revenue gains associated with the burgeoning system, tax attorneys and a trade association representative said during a panel Tuesday.
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June 11, 2024
House Panel Chair Seeks To End Media Org's Tax Exemption
The House's top tax writer wants the Internal Revenue Service to revoke the tax-exempt status of a nonprofit Mideast-focused news outlet, telling Commissioner Daniel Werfel that the organization is aiding Hamas.
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June 11, 2024
Lawmakers Urge Biden To Back Brazil's Int'l Wealth Tax Plan
Sen. Bernie Sanders and Democratic lawmakers asked the Biden administration Tuesday to support the global minimum tax on billionaires being proposed by Brazil, which is encouraging the Group of 20 nations to endorse the initiative at its meetings next month.
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June 11, 2024
Kostelanetz Partners Talk Benefits Of Atlanta Tax Firm Tie-Up
Kostelanetz LLP partners Bryan Skarlatos and Todd Welty discuss the firm’s recent combination with Atlanta boutique Welty PC.
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June 11, 2024
Charity Founder Charged With Embezzling $2.5M, Evading Tax
The founder of a New York City charity embezzled $2.5 million in donations meant for low-income families and then failed to report the earnings to the Internal Revenue Service or pay tax on them, according to a criminal complaint unsealed Tuesday in New York federal court.
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June 11, 2024
IRS Schedules 3 Taxpayer Advocacy Panel Meetings For July
Three Taxpayer Advocacy Panel committees will hold public meetings in July focused on improving customer service at the Internal Revenue Service, the agency announced Tuesday.
Expert Analysis
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Prevailing Wage Rules Complicate Inflation Act Tax Incentives
Nicole Elliott and Timothy Taylor at Holland & Knight discuss the intersection between tax and labor newly created by the Inflation Reduction Act, and focus on aspects of recent U.S. Department of Labor and U.S. Department of the Treasury rules that may catch tax-incentive seekers off guard.
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Payroll Tax Evasion Notice Suggests FinCEN's New Focus
The Financial Crimes Enforcement Network’s recent notice advising U.S. financial institutions to report payroll tax evasion and workers' compensation schemes in the construction industry suggests a growing interest in tax enforcement and IRS collaboration, as well as increased scrutiny in the construction sector, say Andrew Weiner and Jay Nanavati at Kostelanetz.
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How Taxpayers Can Prep As Justices Weigh Repatriation Tax
The U.S. Supreme Court might strike down the 2017 federal tax overhaul's corporate repatriation tax in Moore v. U.S., so taxpayers should file protective tax refund claims before the case is decided and repatriate previously taxed earnings that could become entangled in dubious potential Section 965 refunds, say Jenny Austin and Gary Wilcox at Mayer Brown.
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IRS Foreign Tax Credit Pause Is Welcome Course Correction
A recent IRS notice temporarily suspending application of 2022 foreign tax credit regulations provides wanted relief for the many U.S. multinational companies and other taxpayers that otherwise face the risk of significant double taxation in their international operations, say attorneys at Mayer Brown.
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If Justices End Chevron Deference, Auer Could Be Next Target
If the U.S. Supreme Court decides next term to overrule its Chevron v. NRDC decision, it may open the door for a similar review of the Auer deference — the principle that a government agency can interpret, through application, ambiguous agency regulations, says Sohan Dasgupta at Taft Stettinius.
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Tax Court Ruling Provides Helpful Profits Interest Guidance
A recent U.S. Tax Court decision holding that a partnership may exclude interests in a company that it indirectly received sheds light on related IRS guidance, including the proper valuation method for such interests, though the court's application of the method to the facts of this case appears flawed, say attorneys at Kramer Levin.
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Mallory Ruling Doesn't Undermine NC Sales Tax Holding
Contrary to the conclusion reached in a recent Law360 guest article, the U.S. Supreme Court’s recent Mallory ruling shouldn't be read as implicitly repudiating the North Carolina Supreme Court’s sales tax ruling in Quad Graphics v. North Carolina Department of Revenue — the U.S. Supreme Court could have rejected Quad by directly overturning it, says Jonathan Entin at Case Western Reserve.
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IRS Criminal Probe Spells Uncertainty For Malta Pension Plans
The IRS’ recent scrutiny of Malta pension plan arrangements — and its unusual issuance of criminal administrative summonses — confirms that it views many of these plans as illegal tax evasion schemes, and the road ahead will not be smooth and steady for anyone involved, say attorneys at Kostelanetz.
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IRS Announcement Will Aid Cos. In Buyback Tax Planning
Recent IRS transitional guidance regarding current requirements for reporting and payment of the stock repurchase excise tax will help corporate taxpayers make decisions about records retention and establishing reserves for future tax payments, say Xenia Garofalo and Kyle Colonna at Eversheds Sutherland.
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Mallory Opinion Implicitly Overturned NC Sales Tax Ruling
The U.S. Supreme Court recently declined to review Quad Graphics v. North Carolina Department of Revenue, but importantly kicked the legs from under Quad's outcome a week later, stating in its Mallory decision that the high court has the prerogative to overrule its own decisions, says Richard Pomp at the University of Connecticut.
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How NIL Collectives Could Be Tax-Exempt After IRS Curveball
Since the Internal Revenue Service recently announced that numerous collectives creating paid name, image and likeness deals for collegiate student-athletes do not qualify for tax exemption, for-profit entities and alternative collective structures with incidental student-athlete benefits may be considered to fund NIL ventures, says David Kaufman at Thompson Coburn.
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Is This Pastime A Side-Gig? Or Is It A Hobby?
The recent U.S. Tax Court decision in Sherman v. Commissioner offers important reminders for taxpayers about the documentation and business practices needed to successfully argue that expenses can be deducted as losses from nonhobby income, says Bryan Camp at Texas Tech.
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Recent Provider Relief Fund Audits Are Just The Beginning
Though the Health Resources and Services Administration's initial audits of the Provider Relief Fund program appear to be limited in scope, fund recipients should prepare for additional oversight, scrutiny and disallowances as the HRSA ramps up its efforts, say Brian Lee and Christopher Frisina at Alston & Bird.