Tax Law

    • 1 Feb 2013

    Guns and Tax Returns

    Earlier this month, a district court judge for the District of Columbia basically shut down the IRS's registered tax return preparer program . The purpose of the program was to better regulate hundreds of thousands of people who prepare tax returns with little, if any, supervision - unlike lawyers or CPAs or enrolled agents who prepare tax returns. The regulations require that previously unregulated preparers who...
    • 31 Jan 2013

    Corporate Tax: Why Disclosure Is the Key to Reform

    Two columns of interest emerged today [January 31, 2013] on the issue of corporate tax disclosure, plus another interesting public hearing in the UK, this time with the big four in the hot seat. Put all of this together and we can see very clearly the intense connection between tax reform and public understanding of the status quo. With the latter as to corporate tax being woefully inadequate and relevant information...
    • 31 Jan 2013

    Tax Court Denies Conservation Easement Allowing Substitution of Property

    As the IRS continues to challenge charitable deductions for the contribution of conservation and facade easements, the Tax Court is considering the details of these arrangements with greater scrutiny. In doing so, the Court is refining the law governing these transactions. In its most recent opinion on this issue, the Court clarified yet another requirement for taxpayers who wish to claim this charitable deduction. ...
    • 30 Jan 2013

    Stifling Lefty - Political Correctness in the Tax Debates

    Phil Mickelson, the great golfer, caused quite a stir recently when he said (and this is really all he said) that the new higher taxes at the federal level and in his home state of California " doesn't work for me right now ." ... Mickelson is a really rich guy... [T]he the liberal elites hammered him for being selfish... In response to the barrage from the left, Lefty issued an apology ... So the pro...
    • 29 Jan 2013

    The Income Tax Is Inquisitorial - Get Over It

    Apparently, the Italians have found a way to make their unpopular income tax even more unpopular . In the face of rampant cheating, they've adopted a new enforcement technique. Now, instead of just pawing through paychecks, bank statements and the like, officials will also scrutinize spending habits. Living beyond your means (or at least means as reported to tax officials)? Expect a visit from the tax man. This strikes...
    • 29 Jan 2013

    French Budget Minister Caught in Tax Probe

    ... Earlier this month the French Budget Minister, Jerome Cahuzac, was placed under investigation for allegedly using a secret offshore bank account to evade taxes. If that strikes you as odd, you're not alone. As budget minister, Cahuzac's job is to fund the Republic and reduce the nation's deficit. And that means making sure all French taxpayers pay their fair share. ... Needless to say, this is not...
    • 28 Jan 2013

    Taxing Financial Pollution

    European finance ministers ("finance minister" is equivalent to our Treasury Secretary) voted on January 22 to move forward with a plan to tax trades of stock, bonds, and other financial instruments. As a result a financial transactions tax will likely become law in eleven countries--including Germany, France, Spain, and Italy. Noticeably absent from the list is the United Kingdom, home of Europe's largest...
    • 25 Jan 2013

    U.K. Conservative Policies in Trouble

    This morning UK GDP figures for the 4th quarter of 2012 were released and the news is bad: the economy shrank by 0.3 percent. After the mini-burst of growth due to the Olympics, the UK economy is back in the doldrums. Some are calling it a triple dip recession . The chart below shows why the UK voting public has every right to question the economic policies of Prime Minister David Cameron. Even the normally circumspect...
    • 25 Jan 2013

    Wipe-Out - What Surfing and Our Tax System Have in Common

    ... Tax Analysts and Pepperdine School of Law held a symposium on federal income taxes... titled "Tax Advice for the Second Obama Administration," (you can watch the video here) but it could have been called "What's Wrong with Our Tax System: Let Us Count the Ways." The panels were excellent and interesting and speakers proposed bold solutions to the problems with our tax system. But to me they...
    • 24 Jan 2013

    District Court Decision Prevents IRS from Regulating Certain Tax Return Preparers

    In a surprising decision, the U.S. District Court for the District of Columbia found in favor of three plaintiffs who challenged the Internal Revenue Service's ability to govern tax return preparers pursuant to regulations issued in 2011. Loving v. Internal Revenue Service, No. 12-385 (January 18, 2013) . The 2011 regulations required, among other things, registration with the IRS and use of a registration number...
    • 21 Jan 2013

    Why FATCA Is A Tax Treaty Override

    I've been asked to explain comments I made in a recent talk about FATCA, when I said that this regime constitutes a tax treaty override, and that I don't think that IGAs are a valid fix as a matter of law. Here is my reasoning. I will use the US-Canada tax treaty as an example, but the override applies to all US tax treaties currently in force. This is a lengthy post so let me preface with the executive summary...
    • 18 Jan 2013

    Final FATCA Regulations Issued 1/17/2013

    The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today issued TD 9610 Final Regulations implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA). The issuance of the final regulations marks a key step in establishing a common intergovernmental approach to combating tax evasion. These regulations provide additional...
    • 10 Jan 2013

    Permanent Insanity

    Things have been positively dizzy in Washington since the New Year - dizzy from all the spinning coming from Democrats and Republicans on how they saved us from the fiscal cliff. My personal favorite: we now have a permanent tax code. Even the great, gray lady that is The New York Times declared " A Gigantic Sigh of Relief as Tax Uncertainty Ends ." Don't you believe it. These politicians will be back at...
    • 9 Jan 2013

    Good - And Not So Good - Corporate Tax Ideas From New Mexico

    New Mexico Governor Susana Martinez , a rising star among GOP politicians, is calling for a steep reduction in the corporate tax rate . She proposes cutting the rate from 7.6 to 4.9 percent. That is good news. The corporate income tax is -- and will likely remain -- one of the worst ways to raise revenue for state governments... But Martinez is also calling for corporations to have the option of using either the current...
    • 8 Jan 2013

    Can You Distinguish a Tax From a Ransom Payment?

    ... In case you missed it, Starbucks managed to legally pay no income tax in the U.K. over the course of several years, despite operating more than 700 thriving coffee shops across Britain. All its taxable income (yes, every penny) had been shifted to related entities in other countries. That caused the activist group U.K. Uncut to organize a series of sit-ins. Starbucks eventually promised to voluntarily transfer funds...
    • 2 Jun 2012

    Support Us on the Social Madness Corporate Challenge!

    The Social Madness corporate challenge has kicked off, and LexisNexis is one of 60 Dayton-area companies selected to compete in this social media competition hosted by the Dayton Business Journal and its parent, American City Business Journals. The three national winners of the challenge will be able to designate a favorite charity to receive a $10,000 donation. The Challenge was established to celebrate, support and...
    • 24 May 2012

    Lexis® Offers Two Complimentary Values

    Receive two complimentary issues of Lexis® Federal Tax Journal Quarterly and a complimentary business day feed to Lexis® Daily Federal Tax Tracker . Share this message | Receive Two Complimentary Issues of Lexis® Federal Tax Journal Quarterly AND a Complimentary...
    • 2 May 2012

    Convictions of Mail Fraud, False Claims and Conspiracy; Use of Offshore Accounts

    According to a DOJ Press Release, Curtis Morris and Richard Kellog Armstrong were convicted of "for mail fraud, filing false claims against the United States and conspiracy to file false claims against the United States." "Morris was found guilty of three counts of mail fraud, seventeen counts of filing false claims against the United States and one count of conspiracy to defraud the United States. Armstrong...
    • 1 May 2012

    Second Circuit Reverses and Vacates Convictions for Wire Fraud and Tax Evasion

    In United States v. Litwok, ___ F.3d ___, 2012 U.S. App. LEXIS 8727 (2d Cir. 2012), here , the Second Circuit upset convictions for wire fraud and tax evasion, applying seeming settled principles. I address first the tax evasion convictions, although the Court addressed first the wire fraud conviction. The defendant's tax evasion convictions for 3 years arose from her failure to file income tax returns for those...
    • 12 Jan 2012

    NTA Discussion of the Williams Case

    The National Taxpayer Advocate's report discussed in the preceding blog has a component titled Most Litigated Issues: Case Advocacy, Appendices, here . In that component, the NTA discussed the Williams case (see report at pp 601 - 603). The discussion is (footnotes omitted): The National Taxpayer Advocate's report discussed in the preceding blog has a component titled Most Litigated Issues: Case Advocacy, Appendices...
    • 12 Jan 2012

    National Taxpayer Advocate Report Critical of IRS Implementation of Offshore Voluntary Disclosure Programs

    The National Taxpayer Advocate who has intervened for participants in OVDP and perhaps OVDI as well has issued her annual report to Congress. The web page with links to components of the report is here . Among the items discussed are the problems she and her staff perceive with respect to the IRS's implementation of the voluntary disclosure programs for offshore accounts. Most of her specific angst appears directed...
    • 21 Dec 2011

    IRS To Serve CA BOE John Doe Summons in Real Estate Transfer Investigation

    The U.S. District Court for the Eastern District of California has issued an order allowing the Internal Revenue Service to serve a John Doe Summons on the California State Board of Equalization. A John Doe Summons is defined by Section 7609(f) of the Internal Revenue Code, and is used by the IRS to gather information from a third party about a class or group of taxpayers suspected of not complying with the Internal Revenue...
    • 20 Dec 2011

    Deal Reached in Western Union – First Data Transfer Pricing Case

    On December 15, 2011, Western Union announced that it entered into an agreement with the Internal Revenue Service to settle a long-standing transfer pricing dispute with its former parent company, First Data Corporation. According to documents filed with the Securities Exchange Commission , Western Union and First Data agreed to a total of $1.18 billion in transfer pricing related adjustments. The total adjustment included...
    • 16 Dec 2011

    The Payroll Tax Deal Will Get Done

    ... My not-so-bold prediction over the last couple of weeks has been that the temporary payroll tax cut will be extended, and, on time. Why? Because there is too much danger for the politicians on all sides - Democrats in Congress, Republicans in Congress and the President - if they don't get it done. And, after all, they're politicians. (Apparently, they stopped being real lawmakers some time ago.) ... ...
    • 14 Dec 2011

    IRS Gives Agents the Authority for Summonsing Metadata

    In ILM 201146017 (10/14/11), here , the IRS concludes that it may summons a taxpayer's electronic data files (or backup files) in order to obtain associated metadata. That is the bottom-line conclusion, but the ILM applies the rule in several discrete circumstances. The ILM defines metadata as and the need for it succinctly: Generally, metadata is information that describes how, when, and by whom...