Federal
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August 02, 2024
IRS Wrongly Attacking Installment Method Deals, Court Told
The Internal Revenue Service mischaracterized installment sales as potentially abusive tax shelters in last year's rule proposing additional reporting requirements for such deals, an Idaho capital assets dealer told a federal district court.
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August 02, 2024
St. Louis Attys Can't Get Acquittal In $4M Tax Avoidance Case
Two Missouri-based attorneys, a father and daughter duo found guilty of participating in a $4 million tax avoidance scheme, will not be granted a new trial or an acquittal, despite their assertions that a number of errors tainted their trial, a North Carolina federal judge ruled Friday.
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August 02, 2024
Ex-Loeb Tax Atty Latest Addition To Kilpatrick's NY Team
A former Loeb & Loeb LLP attorney is bringing his experience in U.S. federal tax matters and real estate transactions to Kilpatrick Townsend & Stockton LLP, the firm announced Thursday.
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August 02, 2024
Sister-In-Law Ordered To Testify In Hunter Biden Tax Case
A California federal judge ordered Hunter Biden's sister-in-law, with whom he was romantically involved, and her sister to testify at his upcoming criminal trial in which he is accused of scheming to avoid paying $1.4 million in taxes.
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August 02, 2024
Calls To Taxpayer Advocates Go To Voicemail, TIGTA Says
The Treasury Inspector General for Tax Administration called all 76 local Taxpayer Advocate Service phone lines to test their availability and only had calls answered twice, it said Friday, calling on the service to improve its monitoring of the lines.
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August 02, 2024
Treasury Faces Complicated Path For Amount B Pricing Rules
The U.S. Treasury Department signaled it is considering how to enact the OECD's routine pricing plan known as Amount B, but U.S. tax attorneys expect a complicated compliance exercise if rulemakers establish the new transfer pricing approach.
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August 02, 2024
Coca-Cola Poised To Appeal $2.7B Tax Bill With 11th Circ.
The U.S. Tax Court signed off Friday on Coca-Cola's $2.7 billion tax bill, setting the stage for the beverage giant to appeal the liabilities and related rulings in its long-running dispute over the IRS' reallocation of the company's foreign income.
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August 02, 2024
IRS Tells Tax Court AbbVie's $1.6B Break Fee Is A Capital Loss
The Internal Revenue Service correctly reclassified AbbVie's $1.6 billion break fee to an Irish biotechnology company as a capital loss, the agency told the U.S. Tax Court, arguing that the failed merger is tantamount to disposing of property.
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August 02, 2024
Taxation With Representation: Sullivan, Dechert, Kirkland
In this week's Taxation With Representation, BNP Parabis SA acquires an investment management subsidiary for €5.1 billion, Cleveland accounting firm CBIZ merges with competitor Marcum for $2.3 billion, and Arcosa Inc. inks a deal with a family-owned construction materials business for $1.2 billion.
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August 02, 2024
Liberty Global's $110M Tax Refund Kosher, 10th Circ. Told
The IRS is trying to block Liberty Global's bid for a $110 million tax refund by improperly using a legal doctrine requiring transactions to have economic substance, the telecommunications giant told the Tenth Circuit, arguing it was allowed to make tax-driven choices in the transactions at issue.
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August 02, 2024
Weekly Internal Revenue Bulletin
The Internal Revenue Service's weekly bulletin, issued Friday, includes finalized regulations that govern the quarterly reporting of a new excise tax that pharmaceutical companies, suppliers and importers must pay when they do not negotiate with Medicare over drug prices.
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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.
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.