On December 3, 2014, the United States Tax Court issued an opinion in Brown v. Commissioner, T.C. Memo. 2013-275, in which the Court found that the taxpayers were not liable for the fraud penalty under Internal Revenue Code (I.R.C.) section 6663(a) despite the fact...
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Tax Controversy
Husband not liable for tax where IRA distributions were made pursuant to forged withdrawal requests
In a case of first impression, the Tax Court held that a taxpayer did not fail to report income attributable to unauthorized IRA distributions where his former wife had likely forged the withdrawal requests and where he received no economic benefit from the...
Supreme Court won’t hear Amazon and Overstock
On Monday, December 2, the United States Supreme Court declined to hear a case that could have answered long-standing questions about a state's right to collect sales tax from internet retailers who do not have a physical presence in the state. Amazon and...
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,...
Tax Court finds former IRS agent liable for fraud penalty due to guilty plea in prior criminal proceeding
Yesterday the Tax Court issued an opinion in Senyszyn v. Commissioner, T.C. Memo. 2013-274, finding in favor of the IRS on summary judgment that a former revenue agent was liable for a fraud penalty and that the statute of limitations on assessment remained open....
The tax liability of professional athletes in California
There appears to be controversy concerning the manner that professional athletes are taxed in the state of California. The average NFL player earns $2 million. California's personal income tax rate is now at 13.3 percent - the highest in the United States. For...
Taxing of online sales controversy appealed to U.S. Supreme Court
With practically no guidance being provided by Congress, courts have been trying cases regarding the application of sales tax to online retailers like Amazon.com, Inc. Unfortunately, not all state rulings have been consistent.One state court ruled that Amazon and...
Individual Taxpayers can Obtain Transcripts During IRS Shutdown; Practitioners Cannot
Despite most lights being out at the IRS, taxpayers can still receive some services at the IRS. Crucial to many tax professionals are the IRS Transcripts of Account. Since it is an automated process, taxpayers can still use automated tools, such as IRS.gov, to request...
Governor Signs Bill to Reduce Excise Tax Penalty, Clarifies use of Motion Picture Tax Credit and Simplifies Tax-Exempt Process for some Nonprofits
Governor Brown signed AB 1173 by Assemblymember Raul Bocanegra (D-Los Angeles) which reduces the excise tax penalty from 20% to 5% for taxable years beginning January 1, 2013, amounts deferred under a nonqualified deferred compensation plan that does not meet the...
IRS believes tax controversy is over
The IRS recently announced that it was granting tax-exempt status to True the Vote. The IRS and the Department of Justice may believe that this tax controversy may be over, but True the Vote says there are still questions that it needs answered. As many businesses in...