So starts the opinion of the United States Court of Appeals for the Ninth Circuit in United States v. MacKenzie: “As Benjamin Franklin said, ‘nothing is certain except death and taxes.’ But how certain are taxes in a Chapter...more
Tips are in the news lately. It seems like political strategists on both sides of the aisle have concluded that excluding tips from taxable income is good for votes. One has to wonder if this political promise will go the way...more
The number of virtual currency types has added to this problem. According to TIGTA, the number of virtual currencies has grown significantly since April 2020, from 5,000 to over 26,000 (420 percent) as of July 2023. The two...more
The cannabis industry knows well the economic burden imposed by Section 280E of the Internal Revenue Code of 1986 (Code). It substantially increases the cost of doing business because it disallows deductions for expenses...more
Proposed federal legislation would move the time of taxation for rewards received from staking cryptocurrency and other digital assets to the time of sale. IRS guidance currently provides that staking rewards are taxed at the...more
Another taxpayer has been stung by using the wrong version of a private delivery service, FedEx “Express Saver,” resulting in the late filing of an important tax document.
Filing Requirements for U.S. Tax Court Petitions-...more
A recent United States Tax Court memorandum decision demonstrates once again the importance of understanding the rules for timely filing your tax return. See John P. Zaimes v. Commissioner of Internal Revenue. If a tax return...more
The IRS recently released Revenue Ruling 2023-14, in which it addresses the tax treatment of cryptocurrency staking rewards. The IRS phases the issue as follows: If a taxpayer that uses a cash method of accounting...more
The Internal Revenue Service (IRS) is proposing a new voluntary program, referred to as the Service Industry Tip Compliance Agreement (SITCA) program, for employers in service industries to avoid paying the employer’s share...more
Last year, the Internal Revenue Service (IRS) revised a question regarding digital assets that appears at the top of certain 2022 income tax returns. Now, in IR-2023-12, the IRS has provided guidance on how to answer that...more
As reported late last year, the IRS announced in Notice 2022-1 (Notice) that lenders are not required to, and should not, issue IRS Forms 1099-C when certain student loan debts are forgiven. The Notice was in response to...more
Receiving a letter from the IRS is like seeing the flashing lights of a police patrol car in your rear view mirror. As tempting as it might be, trashing the letter is like trying to outrun the patrol car. Not all...more
Beginning July 1, 2022, a Federal excise tax, commonly referred to as the “Superfund Tax,” will be imposed on any taxable chemical sold by a manufacturer, producer, or importer. The Superfund Tax also will be imposed on the...more
Tax returns and return information generally are protected from disclosure by Section 6103 of the Internal Revenue Code (Code), and unauthorized disclosures can result in penalties. Certain disclosures are permitted, but what...more
Acting to clarify the practical impact of a COVID relief provision enacted earlier this year, the IRS has announced in Notice 2022-1 (Notice) that lenders are not required to, and should not, issue Forms 1099-C when certain...more
In restaurants, the wait staff, bartenders, and bussers are required to report their tips, including cash tips, to the restaurant and the IRS. Even if those cash tips aren’t reported to the restaurant, since tips are income...more
Once again, a borrower who argued his debt was cancelled when he received an IRS Form 1099-C was told by the court that it was merely discharged. The court says “discharge” is not “actual discharge.” While acknowledging that...more
Before enactment of the 2021 Consolidated Appropriations Act on December 27, 2020, the Internal Revenue Service took the position that taxpayers could not deduct expenses paid with proceeds of a forgiven PPP loan. By passage...more
When debt is forgiven, as much of the funding lent through the CARES Act’s PPP may be, a lender may be required to file IRS Form 1099-C with the IRS and to furnish a copy to the borrower. As a lender, do I need to file the...more
Do I have to report to the IRS a payment I make to a lawyer?
If you make payments to a lawyer, you may be required to file an IRS form to report that payment. For a payment to a lawyer to be reportable to the IRS, it...more
In a previous alert we reported that the Consolidated Appropriations Act, 2021, which contains The COVID-related Tax Relief Act of 2020, specifically provides that “no deduction shall be denied, no tax attribute shall be...more
The Treasury Department and the IRS received 21 written comments in response to the like-kind exchange proposed regulations (see our earlier alert). The recently issued final IRS like-kind exchange regulations adopt some...more
Congress has overridden the IRS position that expenses paid with PPP loan proceeds cannot be deducted if the PPP loan is forgiven.
In our November 20, 2020, alert captioned “Can I Deduct Expenses Paid with a PPP Loan?” we...more
The Internal Revenue Service is often a significant creditor in a bankruptcy proceeding, frequently taking priority over other creditors. In this episode, McGlinchey Tax attorney Douglas Charnas (Washington, DC) and Financial...more
12/8/2020
/ Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Federal Taxes ,
Income Taxes ,
IRS ,
Tax Debt ,
Tax Liability
In recently released Revenue Ruling 2020-27, the IRS addressed the following two fact patterns:
•First, Maria received a PPP loan in 2020 that she used to pay “Covered Expenses.” Maria meets the requirements for...more