Category: Tax Controversies
IRS Disagrees with Tax Court on Partner Excluding Debt Cancellation Income
The IRS has recently announced a non-acquiescence in four Tax Court cases involving the cancellation of partnership indebtedness. Generally, the discharge of indebtedness gives rise to gross income to the obligor. However, Code Section 108 provides a number of exceptions. Section 108(a)(1)(A) provides an exclusion if the cancellation of indebtedness…
Uncertainty Still Looms – Tax Increase Prevention Act of 2014
With only two weeks remaining in 2014, Congress did the expected and passed the Tax Increase Prevention Act of 2014 (TIPA), with President Obama signing the Act into law soon thereafter. For the 2014 tax year, TIPA extends certain business and individual tax breaks, most commonly known as the “extenders.” For…
Revised Streamlined Program Offers Resident Taxpayers Options Regarding Foreign Assets
On June 18, 2014, the Internal Revenue Service announced revisions to the Streamlined Domestic Offshore Procedures (the “Streamlined Program”). The revised Streamlined Program offers reduced penalties for certain taxpayers with offshore reporting issues as compared to the higher penalties imposed under the Offshore Voluntary Disclosure Initiative (the “OVDI Program”). The Streamlined Program,…
Powers of Attorney & IRS FBAR Reference Guide
FBAR Filing and Powers of Attorney: The recently published “IRS Reference Guide on the Report of Foreign Bank and Financial Accounts (FBAR)” explains the purpose of the FBAR, who must file, and provides a host of definitions relating to the FBAR regulations. Perhaps most notably, the reference guide explains that…
OVDP Allows Clients with Foreign Assets to Avoid Drastic Tax Consequences
In recent years, the Internal Revenue Service has amped up enforcement of rules regarding offshore accounts held by United States residents. In many situations, parties who were unaware of reporting requirements can be assessed a crippling combination of back taxes owed, interest, and penalties. In certain circumstances, criminal prosecution for…
Healthcare Taxes
Addressing Healthcare Taxes in 2013, new taxes included in the 2010 Patient Protection and Affordable Care Act will take effect, broadening the Medicare tax base for higher-income taxpayers by: Imposing an additional Hospital Insurance (HI) tax rate of 0.9 percent on earned income in excess of $200,000 for individuals and $250,000 for…
IRS Voluntary Classification Settlement
The Internal Revenue Service has announced a new Internal Revenue Service Voluntary Classification Settlement program that provides partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat workers as employees. The Voluntary Classification Settlement Program (VCSP) allows eligible taxpayers to voluntarily reclassify their workers for federal…
IRS Enforcement Budget to Quadruple
Reuters New Service reports that President Barack Obama proposed nearly doubling funds to enforce the federal tax laws next year and plans to quadruple funding for tax compliance to $2.1 billion within five years. The budget plan seeks a 5.2 percent increase over the IRS budget for 2009. The IRS is responsible for…