Category: Houston

The IRS has wide discretion in how it administers our tax laws. This discretion is power in its purest sense. This power can be wielded to destroy hard-won reputations, careers, and fortunes and it can even cost individuals their freedom. These powers can come from ambiguities in our laws. They can come from restrictions in…Continue…

Tax cases are interesting in that they apply a fairly well-developed set of rules to varying fact patterns. These varying fact patterns can result in surprising, and often unintended, consequences. The more complex the tax law in question, the more likely it is that the outcome will be something other than what Congress may have…Continue…

As long as the government tries to collect taxes, there will be taxpayers who try to find ways to not pay the taxes. These tax payment avoidance options often involve co-ownership of property or, in many cases, trusts. The recent United States v. Simones, No. 1:20-cv-00795-PJK-SCY (D.N.M. 2021) case shows how the IRS is able…Continue…

The Tax Cuts & Jobs Act of 2017 changed the choice of entity decision quite a bit. It affords corporate taxpayers the benefit of the lower flat 21 percent tax rate. It provides non-corporate businesses a 20% qualified business income deduction. There were other changes too. This is in addition to the existing tax rules…Continue…

United States citizens pay tax on their worldwide income. This general rule can result in double taxation–with the United States imposing tax on the same income that was already taxed by a foreign government. The United States has tax treaties with many countries that help avoid this type of double taxation. The United States also…Continue…

The IRS was recently given a significant increase in its budget. Its request for more money was premised on the need to hire more IRS revenue agents to audit more non-compliant tax returns. While the IRS has in fact reduced its headcount significantly, it has also benefitted from recent tax law changes. Some of these……

Taxpayers often structure their affairs to their advantage. Our legal system and even our tax laws allow for this. With many transactions, one way this is done is structuring transfers as either loans or capital contributions. The tax ramifications for the transfers can vary widely based on this type of broad classification. This distinction is…Continue…

The IRS shifted its focus to international issues about ten years ago. This included having the penalty group within the IRS’s Small Business/Self-Employed division focus on international reporting penalties. This is in addition to the Treasury’s FBAR filing requirements. The SB/SE division’s focus on penalties started with a few penalty notices. The number of these…Continue…

Our tax laws make a distinction between income and losses attributable to capital assets. The distinction draws a line in the sand. Assets that are capital produce capital gain and losses. Other assets do not. This in turn has a number of other impacts, such as on the timing of when income and losses are…Continue…

When Does the IRS Issue a Lock-in Letter? Many taxpayers get behind in paying the IRS as a result of IRS audits. Others have tax balances as they are self-employed or contractors and they simply do not make estimated payments. There are others who owe tax as they instruct their employers to withhold too little……