Last Friday, the Fourth Circuit Court of Appeals affirmed a district court's refusal to quash subpoenas related to foreign bank account records that were required to be maintained under the Bank Secrecy Act and Treasury Regulations.The case involves an investigation...
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Appeals
Supreme Court Upholds Valuation Misstatement Penalty for Disallowed Partnership Losses
Yesterday the Supreme Court held that the 40% gross valuation misstatement penalty under I.R.C. § 6662(h) is applicable in cases where the IRS determines that a partnership is a sham or lacks economic substance. United States v. Woods, No. 12-562 (U.S. Dec. 3,...
FTB Loses against an Out-of-State Nevada Corporation Owned by California Resident
In February, the Franchise Tax Board (FTB) lost a case, DANIEL V INC. v. Franchise Tax Board, in a Los Angeles Superior Court where it had asserted that a Nevada Company was commercially domiciled in California because it was owned by a California resident, Ron...
U.S. Supreme Court Declines To Review Connecticut’s Taxation of Out-of-State Seller
On October 9, 2012, the U.S. Supreme Court denied, without comment, Scholastic Book Club's petition for certiorari, declining to hear an appeal regarding Connecticut's taxation of classroom catalog sales of books to students.Earlier this year, the Connecticut Supreme...
Tax Court Lacks Jurisdiction to Review IRS’s Refusal to Pursue Whistleblower’s Claim
In a case of first impression, the United States Tax Court held that it lacked jurisdiction under Internal Revenue Code (IRC) Section 7623(b) to review the IRS's refusal to pursue a whistleblower's claim. Cohen v. Commissioner, 139 T.C. No. 12 (Oct. 9, 2012)In this...
Court Orders Production of Foreign Bank Account Records Despite Claim for Fifth Amendment Privilege
On August 27th the Seventh Circuit decided In Re: Special February 2011-1 Grand Jury Subpoena Dated September 12, 2011. The Court held that the required records doctrine requires a taxpayer asserting a Fifth Amendment privilege to produce the documents required to be...
Updated Rules Issued for IRS Communications with Appeals Office
Today, in Revenue Procedure 2012-18, the Internal Revenue Service updated its rules dictating how the Office of Appeals is allowed to communicate with other IRS sections or divisions, when a taxpayer or the their representative is not present.Since the issuance of...
