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…
Tax Court Wife of Convicted White Collar Criminal Denied Innocent Spouse Relief Taxpayer-Wife sought relief from joint liability originating in part from Taxpayer-Husband’s embezzlement of funds from a church for which he was convicted of fraud, identity theft and tax evasion . The Tax Court upheld the IRS’s determination that Taxpayer-Wife was not eligible for…
The Internal Revenue Code provides the IRS with authority to waive the 60-day IRA rollover requirement “where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.” See generally Accepting Late Rollover Contributions. The IRS…
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…
Ruesch v. Commissioner, 154 T.C. No. 13 (2020)(link to case in Google Scholar) is the first Tax Court opinion that analyzes the IRS’s ability to certify “seriously delinquent tax debts” to the US State Department for potential “denial, revocation, or limitation of a passport” under IRC § 7345. The case was dismissed because the IRS…
Aspro, Inc. v. Commissioner, T.C. Memo 2021-8 (January 2021) is a cautionary tale for C corporations that look to zero out taxable income through post hoc management fees. In total the three shareholders received management fees in excess of a $1 million dollars a year for the years at issue (2012-2014). Although the management…
In Grajales v Commissioner, 156 T.C. No. 3 (2021), the Tax Court held the 10% tax in section 72(t) applicable to early distributions from qualified retirement plans is not subject to § 6751(b)(1). As a result, the § 72(t) 10% tax is not subject to the written supervisory approval requirement before being asserted against the…
