Federal
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August 01, 2024
Feds Want Full Sentence Kept In Fla. Illegal Employment Case
The U.S. urged a Florida federal court on Thursday to uphold the three-year prison sentence of a labor staffing company operator convicted in a conspiracy to hire migrants not authorized to work in the U.S., saying he's ineligible for a reduction because of his admitted role in the scheme.
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August 01, 2024
Divided Tax Court Says Treaty Bars Collections Hearing
A divided U.S. Tax Court ruled Thursday that it lacked authority to review an Internal Revenue Service decision preventing a woman from challenging a federal tax lien the agency issued on behalf of the Canadian government to secure her tax debt to that country.
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August 01, 2024
TIGTA Says IRS Cybersecurity Program Still Not Fully Effective
The Internal Revenue Service's cybersecurity program continues to not meet federal standards, potentially leaving taxpayer data vulnerable to inappropriate and undetected use, modification or disclosure, the Treasury Inspector General for Tax Administration said Thursday.
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August 01, 2024
Coca-Cola, IRS Enter $2.7B Tax Bill In Transfer Pricing Dispute
Coca-Cola and the IRS submitted tax liability calculations totaling $2.73 billion to the U.S. Tax Court, reflecting the latest step in the company's long-running transfer pricing dispute over the agency's reallocation of the company's foreign affiliate income.
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August 01, 2024
Calif. Couple Ordered To Pay $1.5M Tax Bill
A California couple must pay more than $1.5 million for three years' worth of unpaid tax liabilities, plus interest and any other additions, a federal district court ruled Thursday.
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August 01, 2024
Direct File Will Be Available In New Mexico, IRS Announces
New Mexico will participate in the Internal Revenue Service's free electronic tax return filing program known as Direct File in the 2025 tax filing season, the agency and the U.S. Department of the Treasury announced Thursday.
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August 01, 2024
Airbnb's $1.3B Bill From IRS Overvalues IP, Tax Court Told
Airbnb is challenging a $1.3 billion tax bill tied to income the IRS allocated from overseas, telling the U.S. Tax Court the agency overvalued intellectual property the home-rental giant licensed to its Irish affiliate before going public.
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August 01, 2024
Senate GOP Blocks House-Passed Tax Break Bill
Republicans on Thursday blocked the Senate from considering a bipartisan tax bill negotiated by the chairmen of the House and Senate's tax-writing committees that would extend the full tax break for research and development costs and expand the child tax credit for multiple years.
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August 01, 2024
Court Won't Stop FTC Judges In H&R Block False Ad Fight
The Federal Trade Commission can proceed with its hearing against H&R Block accusing the tax preparation firm of false advertising, a Missouri federal judge ruled Thursday, rejecting the company's argument that the agency's administrative law judges lack constitutional authority to preside.
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August 01, 2024
Senate Panel OKs Maintaining IRS Funding At $12.3B
The Internal Revenue Service would receive $12.3 billion for the third straight year under legislation sent Thursday by the Senate Appropriations Committee to the full chamber for consideration.
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August 01, 2024
3rd Circ. Affirms Nix Of Discovery Ask On GM In Brazil Case
A Delaware federal court didn't abuse its discretion by declining to begin discovery on General Motors to aid ongoing litigation in Brazil for a group that is entitled to receive dozens of car dealerships' tax credits from the early 1990s, the Third Circuit found.
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August 01, 2024
IRS Not Required To Disclose Summonses, 5th Circ. Affirms
The Internal Revenue Service was not required to tell a Texas man with unpaid tax liabilities that it had demanded his financial information from third parties, the Fifth Circuit ruled, upholding a lower court's decision to toss his suit.
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August 01, 2024
Chiropractor Evaded $2.4M In Taxes, Fed. Indictment Says
An Alabama chiropractor evaded $2.4 million in self-reported taxes, filed false tax returns and obstructed the Internal Revenue Service, according to a federal indictment.
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July 31, 2024
Treasury's New 'Killer B' Rules May Revive Controversies
Recent U.S. Treasury Department regulations centered on contentious 2011 guidance aimed at so-called Killer B transactions have revived long-standing questions about how much authority rule writers have to target what they perceive as corporate tax avoidance in these maneuvers.
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July 31, 2024
Cos. Insist Chevron Ruling Doesn't Change Deduction Claims
A medical device company and a food services firm that are each challenging Internal Revenue Service denials of dividend deduction claims told the U.S. Tax Court that the recent U.S. Supreme Court decision overturning Chevron deference doesn't change the validity of their arguments.
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July 31, 2024
Senate Dems Urge Passage Of House-Passed Tax Bill
Senate Democrats urged their Republican counterparts Wednesday to pass legislation that would extend the full tax break for research and development costs and expand the child tax credit for multiple years.
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July 31, 2024
Separate Easement Contribution Docs Critical, IRS Atty Says
Conservation easement donors must always keep separate documents from their donees that acknowledge the gifted property to qualify for a charitable tax deduction in the event the IRS requests such information during an audit, according to an agency counsel Wednesday.
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July 31, 2024
Wash. Cannabis Co. Sues Payroll Firm Over Back Taxes
A Puget Sound-area dispensary is suing Greenleaf HR LLC, a payroll provider specializing in the cannabis industry, and another firm, claiming they failed to pay the IRS on its behalf resulting in a nearly $172,500 tax bill, according to a lawsuit removed to Washington federal court.
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July 31, 2024
GOP Sens. Say Direct File Wrongly Expanding IRS' Power
The Internal Revenue Service "should not be focused on unilaterally expanding its own power" by making the free Direct File program permanent without the authorization of Congress, 19 Republican senators led by Sen. John Barrasso, R-Wyo., and Sen. Mike Crapo, R-Idaho, said Wednesday.
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July 31, 2024
$1.1M Tax Refund Claim Needs More Time, Virgin Islands Says
A man living on the island of St. Thomas who sued the U.S. Virgin Islands Bureau of Internal Revenue for a $1.1 million tax refund is being audited, the agency told a Virgin Islands federal court, urging it not to move forward with the case.
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July 31, 2024
Americans Overseas Launch Residence Taxation Lobby Group
An advocacy group representing U.S. citizens living abroad announced it has officially registered as a lobbyist to continue to push Congress to pass residence-based taxation laws for the benefit of individuals comparable to those for corporations.
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July 31, 2024
Ex-Chicago Alderman Should Serve Full Supervision, Feds Say
A former Chicago alderman and attorney convicted of tax crimes should not be allowed an early reprieve from his court-ordered supervision because it has become his main form of punishment following his compassionate release from prison, the government has told an Illinois federal court.
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July 31, 2024
TaxAct Customers' Attys Want $5.8M Fee For $23M Deal
The attorneys for TaxAct Inc. customers who secured a $23 million deal to resolve claims that the company was secretly sharing confidential taxpayer information with Meta and Google asked a federal judge to award them more than $5.8 million in fees for their work.
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July 31, 2024
Senators Ask Treasury To Limit Biofuel Tax Credit Eligibility
The U.S. Treasury Department shouldn't grant biofuel production tax credits to companies that use foreign-sourced feedstocks, a coalition of Republican and Democratic senators said in a letter published Wednesday.
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July 31, 2024
Judge Won't Undo IRS' Pause On Worker Retention Credits
An Arizona federal judge rejected a tax advisory firm's request to lift the IRS' pause on processing claims for the pandemic-era employee retention credit, saying he wasn't eager to stop the agency from addressing the fraud it alleges has been widespread.
Expert Analysis
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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.
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Flawed Analysis Supports Common Law Tax Deficiency Ruling
The Colorado federal district court’s recent decision in Liberty Global, holding that the U.S. Department of Justice may assert a common law tax claim without the notice of tax deficiency required by the Internal Revenue Code, relies on a contorted reading of the statute and irrelevant case law, say Loren Opper and Christie Galinski at Miller Canfield.
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Review Of Repatriation Tax Sets Justices On Slippery Slope
The U.S. Supreme Court’s recent decision to review the constitutionality of the repatriation tax in Moore v. U.S. has implications for many tax rules involving unrealized amounts and could leave the court on the brink of invalidating large swaths of the Internal Revenue Code, say attorneys at Eversheds Sutherland.