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Can you avoid paying tax by paying your personal expenses from your corporate bank account? Is avoiding tax that easy? No, our system doesn’t work that way. The Moacir Santos v. Commissioner, T.C. Memo. 2019-148 explains how the IRS handles these situations. Facts & Procedural History The taxpayer owns a engineering and paving company. It……
Tax Articles
Can the IRS Ignore the Legal Existence of a Corporation?
If a taxpayer forms a legal entity and it is taxed as a C corporation, can the IRS disregard the legal existence of the corporation and assess the corporation’s tax to the owner? The court addresses this in Russell v.… Read More The post Can the IRS Ignore the Legal Existence of a Corporation? appeared first…
The Timing Trap: Failed Installment Sales
What happens if you sell an asset and are to receive payments in the future, but your accountant fails to elect the installment method? Do you have to report the full amount of the gain in the year of sale?… Read More The post The Timing Trap: Failed Installment Sales appeared first on Houston Tax Attorneys:…
Arguing that the Tax Return You Filed is Incorrect
If your tax return is incorrect and you have pending tax litigation with the IRS, can you argue that the tax return is incorrect? What if the time period for filing an amended tax return is still open? Should the court consider the new argument or should it rely on the incorrect tax return? The……
Can IRS Rely on Third Party Reports to Identify Taxable Income?
If a third party collects monies for you and send you a report reflecting the monies but the reports show too much income, should you be taxed on the higher income or what you actually received? The Ghadiri-Asli v. Commissioner,… Read More The post Can IRS Rely on Third Party Reports to Identify Taxable Income? appeared…
Whistleblower’s Claim Limited by IRS’s Discretion Not to Collect Tax
If you turn in a tax cheat by filing a whistleblower claim with the IRS, what happens if the IRS does not realize the importance of the information received? Put another way, what if the IRS leaves money on the table by failing to assess the full amount for the taxpayer? Is the whistleblower entitled…Continue…
Can the IRS Reach Assets in Land Trusts?
Can the IRS reach an interest in real property held in a land trust? If so, what happens if the taxpayer sells the property? Can the IRS recoup the land from the new buyer or is the IRS limited to the proceeds received? The court addresses this in United States v. Harold, No. 2:18-cv-10223 (S.D.……
Recover Money Paid to the IRS in Error
What if the IRS gets it wrong and then fails to respond to the taxpayer for several years. Can the IRS then agree with the taxpayer, but argue that the taxpayer responded late? The informal claim doctrine can help in these situations. The Chenette v. United States, No. 19-cv-02998-JCS (N.D. Cali. 2019) case provides an……
IRS Levy Does Not Attach to Future Payments
The IRS levy is one of the IRS’s primary methods for collecting unpaid taxes. But the levy power is not unlimited. The IRS levy can attach to some amounts held by third parties that are owed to the taxpayer. But… Read More The post IRS Levy Does Not Attach to Future Payments appeared first on Houston…
IRS Revises Passport Certification Process
Did you get a letter from the IRS about your passport? The IRS recently started sending these letters to taxpayers with unpaid tax debts. The letters have generated quite a bit of controversy, which caused the IRS to pause to reconsider how it handles this issue. Here is what you need to know about the…
