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Reliance of tax advice as a defense to the substantial underpayment penalty.
Taxpayers are eligible for relief when they rely on actual advice from a tax advisor, i.e. professional judgment or analysis of a tax advisor, as opposed to “tax preparation” or clerical tasks associated with a tax advisor’s duties. However, if the tax advisor simply transcribed figures provided by you in preparing a tax return and…
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The IRS is Modernizing – What to expect?
The Internal Revenue Service recently receive a much needed infusion to the tune of nearly $80 billion dollars under the Inflation Reduction Act (IRA) and earmarked nearly 5 billion of that amount for “business systems modernization.” With these funds, it is expected that the IRS will expand its digital services, hopefully beyond their current Taxpayer…
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A Glimmer of Hope – Hobby Losses until 2026
For retired wealthy taxpayers whose pursuits have led to boat chartering, horse breeding or running a vineyard, there is a glimmer of hope. IRC section 183 allows hobby activity expenses to be deducted but only to the extent of hobby income (assuming it is a not-for-profit activity). Because the Internal Revenue Code does not identify IRC…
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Confirmation in Individuals’ Chapter 11 Case and the Automatic Stay
In Cochran v. Commissioner, 159 T.C. No. 4 (2022), the Tax Court rendered a precedential decision and ruled that the enactment of 11 U.S.C. § 1141(d)(5) created a limitation to the Tax Court’s prior holding in Moody v. Commissioner, 95 T.C. 655 (1990) with respect to the effect under 11 U.S.C. § 362(c) of a confirmation of…
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It’s Preferential To Pay Trust Fund Taxes Before Bankruptcy Because It’s Not a Preferential Transfer
Certain transfers made within 90 days of a bankruptcy filing can be set aside by the bankruptcy trustee if a creditor received an interest in a debtor’s property on account of a pre-existing debt while the debtor was insolvent, and the transfer puts the creditor in a better position than it would have been in…
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2022-2023 Guidance Priority List
The Treasury Department’s Office of Tax Policy released the 2022-23 Guidance Priority List recommending application of the agency’s funds for the one year period beginning July, 2022. This list “focuses resources on guidance items that are most important to taxpayers and tax administration,” including 26 specific projects under the header “tax administration.” In addition, on…
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Notice of Intent to Levy – What Purpose Does It Really Fulfill Or Is It Just A Scare Tactic?
In addition to the requirements of proper notice and demand, two different notices of intent to levy are required. First, §6331(d) requires that the IRS notify the taxpayer in writing of the IRS’s intention to levy on the taxpayer’s salary, wages, or other property, at least 30 days before the date of the levy. In…
