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News, Articles & Resources

Category: Tax Controversies

COVID-19 Outbreak Tax Developments

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  Treasury and IRS Issue Guidance on Tax-Paying and Tax-Filing Due to COVID-19 Outbreak On March 13, 2020, President Trump issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (“Emergency Declaration”). The Emergency Declaration…

Despite Late Filing New Jersey District Court Abates $450,959.50 Late Filing Penalty

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In the just decided case of the Estate of Agnes R. Skeba v. United States; No. 3:170-cv-10231, the New Jersey District Court abated a $450,959.50 late filing penalty even though the federal estate tax return was filed nine months late. On March 10, 2014, the due date for the estate…

Taxpayer Wins Major Gift Tax Valuation Case

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Mr. Jones established three trusts for his daughters in May 2009.  He gifted voting and non-voting stock of Seneca Sawmill Co. (“SSC”) and limited partnership interest of Seneca Jones Timber Co. (“SJTC”) to the trusts.  Together these entities operated a lumber and timber business.  Mr. Jones filed a gift tax…

S Corporation Shareholder Denied $8,000,000 Loss Deduction Due to Poor Structure of Loan

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An S corporation does not pay federal income taxes.  Instead, its income or losses pass through to its shareholders, and they report the income or loss on their federal individual income tax returns.  A shareholder can deduct losses, but only up to the adjusted basis of the shareholder’s stock and…

WHEN CAN STATES TAX TRUST INCOME? THE U.S. SUPREME COURT PROVIDES LIMITED GUIDANCE

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U.S. Supreme Court provides guidance (although minimal) on the interstate income taxation of Trusts. North Carolina Department of Revenue vs. Kimberly Rice Kaestner 1992 Family Trust, 139 S. Ct. 2213, 588 U.S.  (June 21, 2019).     When an individual owns several homes and travels between them, spending time in…

Is Registered Mail the Way to Go?

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Prior to 1954, the law treated tax documents as timely filed provided the document was physically delivered to the Internal Revenue Service (“IRS”) by the applicable deadline.  This rule left taxpayers with no recourse should timely mailing have occurred but through no fault of the taxpayers (e.g. postal service misplacing…

IRS Issues Fact Statement Sheet to Explain How it Contacts Taxpayers

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In order to help taxpayers avoid schemes and scams in which individuals (criminals) impersonate IRS employees, the IRS has released a fact sheet (FS-2018-12) explaining how the IRS contacts taxpayers. How IRS Generally Initiates Contact Most contacts are initiated through regular mail delivered by the US Postal Service. the IRS…

IRS Issues Notice Regarding SALT Workaround

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Earlier this month Governor Murphy signed a bill (S1893) allowing municipalities, counties, and school districts to set up charitable funds to pay for public services. Residents who donate to the funds can receive a credit for up to 90% of the amount paid toward their property tax bills and the…

Million-Dollar Penalty Upheld for Failing to Disclose Foreign Financial Assets

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In 2002, Letantia Bussell was criminally charged with concealing financial assets in offshore accounts.  Bussell was required to disclose her financial interest in an overseas account which she had to report in 2007 by filing a Report of Foreign Bank and Foreign Accounts (“FBAR”).  She failed to make the required…

Reform or Repeal – Regulations Identified as Imposing Undue Burden on Taxpayers

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The Secretary of the Treasury has identified eight regulations that it intends to modify or repeal as instructed by Executive Order 13789.  Under the Executive Order, the Treasury was given sixty (60) days to review all “significant tax regulations” issued on or after January 1, 2016 in order to identify…

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