ERC 2021 Recapture Letters on the Horizon... [ read ]
The IRS has been actively issuing notices regarding the recapture of excess employee retention credits (ERC). And, based on IRS public comments, it is anticipated that they will soon begin sending out recapture letters for the year 2021.
Thinking about Selling your Business? Now May be the Time to Make a Voluntary Disclosure to the IRS.... [ read ]
Prior blog posts have discussed making voluntary disclosures to the IRS generally and for specific issues, such as offshore bank accounts, virtual currency and most recently the Employee Retention Credit. One thing we have never discussed is making a voluntary disclosure in the context of the sale or transfer of a business.
IRS Announces Plan to Increase Audit Coverage of Large Corporations, Complex Partnerships, and Wealthy Taxpayers... [ read ]
Yesterday the IRS announced updates to its strategic operating plan, which details how the IRS is spending billions of dollars from the Inflation Reduction Act (IRA). Spoiler alert – read the title of this Blog post.
D.C. Circuit Reverses Farhy... [ read ]
In a blog post last year, Any Taxpayer Who Paid An International Information Return Penalty Should Consider Requesting a Refund, we discussed the Tax Court holding in Farhy v. Commissioner that the IRS does not have authority to assess certain international information return reporting. However, the blog post referenced a possible IRS appeal on the Farhy decision,
The Trust Fund Recovery Penalty... [ read ]
A business that has employees is required by the Internal Revenue Code to withhold payroll taxes and income taxes from the wages of its employees and to pay those withheld amounts, called trust fund taxes, to the IRS.
IRS Appeals Forms New Office to Help IRS Exam Resolve Disputes Earlier and Easier... [ read ]
For years, the IRS has offered alternative dispute resolution (ADR) at various stages of the tax administrative process. Use of ADR, however, has been declining in recent years. With this new office, IRS Appeals aims to make its ADR programs, such as Fast Track Settlement, Fast Track Mediation, Rapid Appeals Process and Post-Appeals Mediation, more attractive and accessible for eligible taxpayers. The new office will also pilot changes to those ADR programs.
IRS and the Last Known Address Rule... [ read ]
When the IRS issues a Notice of Deficiency (NOD), I.R.C. Sections 6212(a) and (b)(1) require that the NOD be sent to the taxpayer's "last known address" by certified or registered mail. The taxpayer's last known address is the address that appears on the most recently filed and processed tax return unless the taxpayer has given the IRS clear and concise notification of a different address. If the IRS has properly mailed the NOD to the taxpayer's last known address and the taxpayer fails to file a petition with the Tax Court within 90 days, the IRS will assess the tax and penalties included in the NOD. Thereafter, the IRS contacts the taxpayer and begins collection activities.
Reliance on Professional Advice Defense to IRS Penalties... [ read ]
When the IRS proposes changes to a taxpayer's return that result in an underpayment of tax, it will always consider penalties under Internal Revenue Code Section 6662 - Imposition of Accuracy-Related Penalty on Underpayments. The most common penalties proposed by the IRS are negligence and substantial understatement of income tax, both of which are 20% of the tax due.
IRS Caps Off its 2024 Dirty Dozen List with an "Everything Else" Approach... [ read ]
In grand finale style, the IRS released its last entry to its 2024 Dirty Dozen List with a catch-all listing of transactions and invitation to taxpayers to be a whistleblower.
IRS Proposes Adding Certain CRATs to the Naughty List... [ read ]
After a period of relative inactivity, over the last 18 months the IRS has increased the number of potential listed transactions including syndicated conservation easements, micro-captives, Malta pension plans and monetized installment plans. Most of these were already on the IRS Dirty Dozen list, but, so far, none of the proposed regulations regarding making these listed transactions have been finalized.
