Maryland Tax Attorney and CPA

Recent Tax News and Articles

U.S.-Israeli Dual Citizen Denied Foreign Earned Income Exclusion Because “Tax Home” Is In U.S.

In Hirsch v. Commissioner (here) the Tax Court held that the taxpayer’s “tax home” for purposes of  the foreign earned income exclusion (I.R.C. section 911) was in the New York metropolitan area, despite the fact that the taxpayer resided in Israel, because regulatory restrictions on his professional practice limited [...]

Tax Court Rejects Taxpayer’s Reasonable Cause Argument Regarding Automatic Penalties from Failure to File Forms 5471

Flume v. Commissioner (here) revolved around one noteworthy issue: did the taxpayer’s reliance on the advice of his tax return preparer spare the taxpayer from $110,000 in penalties for the taxpayer’s failure to report foreign investments on Form 5471? The taxpayer argued that he relied on the expertise of [...]

Goldsmith v. Commissioner: Can An Owner of A Personal Service Based S Corporation Take Distributions Without Also Taking a Salary?

In Goldsmith v. Commissioner, T.C. Memo. 2017-20 (link) the Tax Court held that the payments from the shareholder’s S corporation were not wages. The Tax Court reasoned that the payments to the taxpayer constituted a non-taxable return of capital. The court reached this conclusion even though the taxpayer did not [...]