The Fairbank case demonstrates the power of IRC § 6501(c)(8) to provide the IRS the ability to assess taxpayers many years after the normal statute of limitations is closed if the taxpayer fails to file all required IRS international information reporting forms. In Fairbank v Commissioner, T.C. Memo. 2023-19, the IRS argued that, despite the…
In Lamprecht v Commissioner, TC Memo 2022-91 (link to case), a John Doe summons tolled the statute of limitations and allowed the IRS to assess a 20% accuracy related penalty more than 6 years after the Taxpayers’ original income tax returns were filed. The IRS was able to assess the penalty even though the Taxpayer…
On Tuesday October 26, 2021, Judge Bloom for the District Court of the Northern District of Florida adopted a Magistrate’s recommendation to issue an order to compel repatriation of funds to satisfy a willful FBAR penalty and accrued interest of more than $18 million dollars.[1] The Magistrate’s Report and Recommendation was issued on June 30,…
On August 16, 2021, the IRS Director of Collection Policy issued a memorandum to provide guidance when FATCA[1] information should be used in IRS Collections cases. See SBSE-05-0821-0015 (the “Memo”) (available at the IRS website here: link). The new guidance from the Memo will be added to the Internal Revenue Manual effective August 16, 2021….
Overview A recent federal magistrate’s recommendation highlights a practical battle between the U.S. Government and a Defendant that is seeking to avoid payment of a $15+ million FBAR penalty: what happens if all of the defendant’s assets are outside of the United States? In a federal suit to reduce the FBAR penalty to judgement, the…
On Wednesday January 20, 2021, the Department of Treasury issued a memorandum[1] (the “Memo”) implementing temporary measures with respect to levy procedures to avoid levying bank accounts with funds from the second round of Economic Impact Payments.[2] The second round of economic impact payments (“EIP 2”) is generally $600 for individuals and $1,200 for married…
In Ramey v Commissioner, 156 T.C. No. 1 (2021) (available in Tax Notes free resources here), the IRS mailed a final notice of intent to levy (LT11) to the taxpayer’s last known address (and actual address) via certified mail return receipt requested. The address was a shared office location (i.e., multiple businesses were located at…
Overview In Reflectxion Resources, Inc. v. Commissioner, T.C. Memo. 2020-114 (August 3, 2020)(link), the U.S. Tax Court held that a Notice of Determination of Worker Classification (“NDWC”) was not in and of itself sufficient to provide the Tax Court with jurisdiction for all payroll tax periods raised in Reflectxion Resources, Inc.’s (“Taxpayer”) petition. In order…
In U.S. v. Bittner [1](available here: link), the U.S. District Court for the Eastern District of Texas (the “Court”) handed taxpayers a victory by declining to follow the legal analysis in Boyd v U.S. In doing so the Court rejected the IRS’s interpretation of what constitutes a “violation” for purposes of computing non-willful FBAR penalties…
Per an internal IRS memorandum prepared within the IRS SB/SE division (link to memo), the IRS has determined that it will not allow a § 199A deduction when it prepares a substitute for return (“SFR”). [mfn] SBSE-04-1219-0054 Guidance for the qualified business income deduction on a substitute for return (12/9/2019) available at https://www.irs.gov/pub/foia/ig/sbse/sbse-04-1219-0054.pdf.[/mfn] Under §…
