Category: Tax

Innocent spouse relief can provide a remedy for spouses who file joint tax returns. This relief is particularly useful if the innocent spouse can obtain a tax refund for amounts previously paid. But not all innocent spouse requests can result in refunds. One has to be careful what they ask for. The Henry v. Commissioner,…

Taxpayers generally have to submit refund claims to recoup taxes paid to the IRS. The law generally says that these claims have to be in writing, but not necessarily on the IRS’s official forms. Taxpayers submit a number of documents to the IRS. Written protests submitted to the IRS are an example. Can such a…

The IRS relies heavily on the U.S. Postal Service to deliver notices to taxpayers. Many of these notices are received by taxpayers. This often comes up when the taxpayer has changed addresses. When the taxpayer does this and the address change is reported to the IRS, should the IRS have to update its records and…

The IRS and the courts have invalidated penalties where the IRS fails to obtain IRS manager approval before assessing the penalty. It has done so in cases where the penalties are manually assessed by IRS personnel. But what about penalties that are automatically assessed by the IRS’s computers? The court addresses this in Atl &…

If a taxpayer cannot deduct gambling losses given the restrictions on gambling losses, can they deduct them as casualty losses instead? What if the gambling loss are attributable to prescription medications known to cause compulsive gambling? The court addresses this in Mancini v. Commissioner, T.C. Memo. 2019-16. Facts & Procedural History The taxpayer diagnosed with…

Section 179D provides an incentive for building owners to install energy efficient systems. The IRS released CCA 2018-005, which addresses one of the controversial aspects of Sec. 179D–namely, the ability for government building owners to allocate the deduction to the designer of the energy efficient property. About Section 179D Section 179D was enacted in 2005,…

If an accountant is disciplined by the accounting board, can the discipline be used to increase his criminal sentence for tax fraud when the accounting board’s discipline did not prohibit or address fraud? The court addressed this in United States v. Iley, No. 17-1269 (10th Cir. 2019). Facts & Procedural History The defendant was a…

If you sell real estate, you pay tax on the gain. Gain is the product of the sales price less tax basis. Tax basis in turn is the amount invested in the property. But how do you calculate and then prove tax basis for buildings located on the property when you sell some but keep…

You have to be careful when electing to waive the right to carry back a net operating loss. This is particularly true if there are items on your tax returns from earlier years that the IRS may eventually adjust if audited. The Bea v. Commissioner, No. 18-10511 (11th Cir. 2019), case provides an example of…

A frequent question is how long one has to keep records for tax purposes. The United States v. Quebe, No. 3:15-cv-294 (S.D. Ohio 2019) case provides the answer for research tax credits. The answer is that you have to keep records that pre-date the formation of your business by twenty years and then you have…