Tax Law

Recent Posts

Transfer Pricing Abuse Is Job-Killing, Corporate Welfare
Posted on 26 Jul 2010 by Martin A. Sullivan

I had the privilege of testifying before the Ways and Means Committee [on July 22nd]. Below is the text of my oral testimony. The official witness testimony can be found here . And the excellent pamphlet by Joint Committee on Taxation is here . Mr... Read More

When Should Small Businesses Get a Tax Break?
Posted on 18 Jan 2012 by Martin A. Sullivan

If you listen to the politicians, you might think all would be right with the world if we just had more small businesses. There would be more innovation. More jobs. More entrepreneurship. More growth. If you sign on to this worldview -- as most of the... Read More Reader Survey: The People Have Spoken
Posted on 24 Aug 2011 by Robert Goulder

Thanks to all the readers who participated in our recent survey. ... Our first survey question was about the congressional deficit reduction 'super' committee. ... A clear majority of participants, 59%, responded that the committee's... Read More

A Benchmark for Socialist Tax Rates
Posted on 15 Mar 2012 by Robert Goulder

You've heard it a thousand times. President Obama wants to continue the Bush-era tax cuts for households with taxable incomes under $250,000 a year, while allowing those cuts to expire for wealthier taxpayers. Were that to occur, the 33% bracket... Read More

District Court: Estate Tax Marital Deduction Triggers Unconstitutional Ruling on DOMA
Posted on 12 Jun 2012 by Asbury Law Firm

In a case that began with a claim for a refund of estate taxes paid, Judge Barbara S. Jones of the Southern District of New York ruled that the Defense of Marriage Act (DOMA) is unconstitutional under the Equal Protection Clause of the 5th Amendment.... Read More

IRS Reminds Exempt Organizations to File Form 990 to Preserve Exempt Status
Posted on 17 May 2010 by LexisNexis Tax Center

Earlier this year, the IRS reminded all exempt organizations that, regardless of their size , they must file the Form 990 on time in order to preserve their tax-exempt status. ... Starting this year, organizations that fail to file these information... Read More

Tax Court Finds Fraud Based, in Part, On Negative Inference from Fifth Amendment Assertion
Posted on 14 Aug 2012 by Jack Townsend

In Loren-Maltese v. Commissioner, T.C. Memo. 2012-214 , the Tax Court introduces the legal issues as follows: It's the facts that make this case interesting, but there are three issues of law that color its background: the general rules of tax... Read More

Minimum Tax on Foreign Profits: Good Idea
Posted on 10 Feb 2012 by Martin A. Sullivan

In his 2012 State of the Union Address, the President re-iterated his pledge to reform the corporate tax by lowering the rate and broadening the base. One of his proposals to help pay for the rate reduction is a minimum tax on foreign profits... .... Read More

Critics Targeting State Estate Taxes
Posted on 10 Sep 2009 by Peter Miller

Wealthy constituents preparing themselves for increased federal tax liabilities are taking another look at state estate taxes, as well. For example, estates valued at $338,333 or more are subject to Ohio's estate tax. Ohio estate tax collections of... Read More

Cincinnati Attorney Pleads to Tax Obstruction
Posted on 3 May 2012 by Jack Townsend

Suzanne Land, a Cincinnati attorney, has pled to one count of tax obstruction, Section 7212(a), here , a three year felony. The DOJ Tax press release is here . I will obtain the guilty plea when available and post it. The press release describes her conduct... Read More

Stop Tax Haven Abuse Act of 2011 Introduced
Posted on 12 Jul 2011 by David T. Soborski

Editor's Note: The following was derived from the U.S. Senate web site page of Carl Levin (D - MI) ... On July 12th, Sen. Carl Levin, D-Mich., together with cosponsors Senators Conrad, Bill Nelson, Sanders, Shaheen, and Whitehouse, introduced... Read More

Taxing Financial Pollution
Posted on 28 Jan 2013 by Martin A. Sullivan

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... Read More

Who Pays for Health Care? The Over-Insured or the Super-Wealthy?
Posted on 2 Nov 2009 by Martin A. Sullivan

Like a tractor trailer stuck at a railroad crossing, the House health care reform bill sits on the track waiting for the Senate freight train to come smashing through. Ideologues of both parties want you to believe the big issue is the fate of the public... Read More

Faking It
Posted on 5 Aug 2010 by Christopher Bergin

An op-ed piece by Treasury Secretary Timothy Geithner that recently appeared in The New York Times had an amazing headline: "Welcome to the Recovery." Wow. ... "Exports are booming." That may be so. But imports are booming better... Read More

Quack. Is the Duck Constitutional?
Posted on 13 Oct 2009 by Christopher Bergin

The old saying goes if it walks like a duck and quacks like a duck, it’s a duck. This applies not only to ducks but to taxes. If we get to health care reform from here, you can be pretty sure that I’m going to label whatever we get charged... Read More

  • Blog Post: Patched Alternative Minimum Tax Needs Overhaul

    The alternative minimum tax (AMT) was intended to ensure that “richer” taxpayers paid at least some individual income tax. We can pretty much agree that that seems only fair. High income taxpayers have a propensity for Swiss bank accounts, offshore ventures and the like. All perfectly legal...
  • Blog Post: Foreign Companies Joint Venturing with Indian Residents Face High AOP Taxes

    A recent ruling by the AAR (Authority for Advance Rulings) in India could adversely impact foreign companies entered into joint ventures with domestic Indian entities. The AAR has in response to a query raised by Geoconsult, an Austrian company, clarified that the joint venture arrangement with the Indian...
  • Blog Post: Hard Economic Times Compel Expanded Military Pay Tax Exemption

    A recent news article revealed that mortgage foreclosures in military towns are occurring at an alarming rate (See Kathleen M. Howley, Foreclosures in Military Towns Surge at Four Times U.S. Rate ,, May 27, 2008). The study cited by the article did not separately track the number of mortgage...
  • Blog Post: The Son of Boss is Back: Sala v. United States

    In Sala v. United States , 552 F. Supp. 2d 1167 (D. Colo. 2008), the taxpayer won a rare victory in a Son-of-Boss tax shelter case. Although originally appearing as slam dunks for the IRS, the Son-of-Boss cases have suddenly become much more competitive for the taxpayer. Will this turnaround cause the...
  • Blog Post: A Dog's Life: The Helmsley Bequest

    Tax commentators are a-twitter with the news that Leona Helmsley bequeathed the bulk of her estate, valued at $5 billion to $8 billion, to be used for the care and welfare of humankind’s best friend . The gift has stirred up debate on to what extent taxpayers should subsidize the whims of the rich...
  • Blog Post: Knight v Commissioner: A Supreme Court Error in Determining Deductibility of Miscellaneous Expenses?

    In Knight v Commissioner , 128 S. Ct. 782 (2008), the Supreme Court put an end to the oft-debated issue of the deductibility of third-party investment advisor fees paid by a trust or estate. The Court determined that such fees are subject to the " two percent floor " for miscellaneous itemized...
  • Blog Post: Corporate Tax Rates Impact Domestic Job Growth in Global Economy

    A US corporation may generally defer tax on foreign earnings as long as the corporation keeps the earnings overseas. Once a corporation repatriates earnings of a foreign subsidiary back to the US, such earnings are generally subject to a corporate tax rate of 35%. The American Jobs Creation Act of 2004...
  • Blog Post: Crack Down on International Tax Havens Now

    In the current presidential election campaign, Senators Obama and McCain have proposed reforming international tax loopholes, and cracking down on international tax havens. Hopefully, this is more than mere campaign rhetoric. Or more of telling voters what they want to hear. Recently, the IRS...
  • Blog Post: The Case for Special Tax Treatment of Qualified Dividends and Long-Term Capital Gains

    Over the next several months leading up to the November election, there will be a multitude of rhetoric in regard to the taxation of qualified dividends and long-term capital gains. The fate of the tax status of these items will depend not only on who becomes the next President of the U.S., but also...
  • Blog Post: Pork: Great for Barbecues, Not For Tax Legislation

    As Wall Street and Main Street await, Congress is yet again considering legislation to resolve the current financial crisis. Perhaps the worst financial crisis since the Great Depression. While crises come and go, one thing remains constant: Congress can’t give up pork, and not only in a Congressperson’s...
  • Blog Post: Don't You Dare Download That Form!

    In 1975, the late Senator William Proxmire established the Golden Fleece Award which is periodically awarded to public officials who, in the judgment of Taxpayers for Common Sense, waste the public’s money. I would like to nominate the Internal Revenue Service for the award, but I don’t think...
  • Blog Post: Stimulus Bill Increases Small Business Stock Sale Exclusion to 75 percent

    The American Recovery and Reinvestment Act of 2009 (ARRA), P.L. 111-5, 02/17/2009, signed into law by President Obama on February 17, 2009, has increased the qualified small business stock exclusion to 75 percent from 50 percent (60 percent for stock of certain empowerment zone businesses) for any gain...
  • Blog Post: House Passes Controversial Taxation of Executive Compensation Bonuses

    On March 20th, the House of Representatives overwhelmingly approved a bill taxing executive compensation bonuses paid to key employees of company’s that accepted government bailout funds awarded in late 2008. President Barack Obama expressed his general support for the bill and hopes for fast Congressional...
  • Blog Post: Offshore Account Amnesty Plan: Look Before You Leap

    Although opening a foreign bank account is legal under U.S. tax law, the Internal Revenue Service (IRS) has historically been an opponent of U.S. taxpayers taking their banking activities offshore. That is why U.S. taxpayers should not be fooled by recently announced plans by the IRS to waive fraud penalties...
  • Blog Post: Caveat: Tax Surprise For Pensioners Filing in 2010

    Here's a plan-ahead tip for retirees: Expect a bump in your tax bill when you file your federal tax returns next year. Private and public pensioners who have no employment income don't qualify for the " Making Work Pay " tax credit for working individuals and families. But oddly, retiree...
  • Blog Post: Nominal Stimulus Impact Expected From Tax Refund Season

    Don't expect this year's tax-filing season to jolt the economic stimulus movement. In an April 13th address, Internal Revenue Service Commissioner Doug Shulman noted that tax refunds usually "kick-start the economy" in the spring. But this year is a lot different from other years. Fewer...
  • Blog Post: Do Employers Need a Tax Disincentive for Workforce Reduction?

    I realize that just about the last thing with which any politician wants to be associated is another tax. Yet, in looking at the economic situation today, it might seem to some that one of the solutions to our current economic quagmire, or at least a potential revenue raiser, is just that. Here’s...
  • Blog Post: IRS Provides First-Time Homebuyer Credit Guidance

    The IRS has released on its website ( ) guidance on the first-time homebuyer credit, which was enacted as part of the Housing and Economic Recovery Act of 2008 and expanded by the American Recovery and Reinvestment Act of 2009 . The guidance includes basic information about the first...
  • Blog Post: IRC Sec. 382 Applied to Corporations With Treasury-Acquired Instruments

    The IRS has provided additional guidance on the application of IRC Sec. 382 to corporations with instruments acquired by the Treasury Department as part of the 2008 stimulus package. Notice 2009-38, 2009 IRB LEXIS 182 (April 13, 2009) * , amplifies and supersedes the guidance provided in Notice 2009...

    At the end of April, the House and Senate each approved a Fiscal 2010 Budget Resolution which calls for extending the federal estate tax into 2010. [Under Bush-era tax legislation enacted in 2001, the estate tax was due to disappear at the stroke of midnight on January 1, 2010.] According to a press...
  • Blog Post: Enterprise Zones: A Better Path to Job Growth Than Focus on Tax Havens

    Publicizing Enterprise Zones would actually be more effective in creating jobs than the current focus on Tax Haven countries. In many cases, corporations can wipe out their state tax bills by locating in Enterprise Zones and generating the desired significant job growth in targeted geographical areas...
  • Blog Post: A Real Crisis Looms: Can Americans Tolerate a Beer Tax Increase?

    Lawmakers are looking at a beer tax, as well as a soft drink tax. Certain lifestyle choices considered to be out of favor are at risk of costing us more. They are ostensibly proposed to offset poor lifestyle decisions that contribut to escalating medical costs. Some would say, however, that beer consumption...
  • Blog Post: Does Social Security Solvency Require Payroll Tax Hikes And/Or Benefit Cuts?

    The 2009 report of the Board of Trustees of the Social Security Trust Funds states that expenses are outpacing income for Medicare and Social Security. To make up the shortfall, the report suggests either cutting benefits or raising payroll taxes. The report notes that the financial imbalance has been...
  • Blog Post: Talk Is Cheap - It's About to Get Cheaper

    In Notice 2009-46, the IRS sought comments on simplifying cell phone taxes. Current law taxes an individual's personal use of an employer-provided cell phone. Under IRC Section 132, employees must keep a record of each call and the time it is made, as well as its business purpose. If the amount of...
  • Blog Post: FBAR Filing Deadline Extended for Some Filers

    Many taxpayers have been recently surprised by the FBAR filing obligation. Nobody likes surprises and here many taxpayers do not have sufficient time to gather the information necessary to properly file the FBAR by the June 30, 2009 deadline. On June 24, 2009, the IRS stated that taxpayers who reported...