News & Analysis as of

Tax Penalties Tax Liability

McDermott Will & Schulte

Potential Refund Opportunity for Interest and Penalty Amounts Accrued During COVID-19 Federally Declared Disaster

Taxpayers who made payments to the Internal Revenue Service (IRS) that included underpayment interest and/or failure-to-file/pay penalties that accrued during all or part of the period between January 20, 2020, through July...more

Offit Kurman

Unexpected Tax Penalties in Talent Contracts: Could Your Motion Picture, Recording, or Sports Contract be Subject to IRC Section...

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Could your motion picture agreement, recording agreement, or sports contract be a non-qualified deferred compensation arrangement? You may think it unlikely, but a non-qualified deferred compensation arrangement refers to any...more

Farrell Fritz, P.C.

International Tax Changes on the Horizon

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There are two recent taxpayer-friendly updates of note in the international tax filing arena. First, Internal Revenue Service (“IRS”) Commissioner Danny Werfel recently announced that the IRS is ending its automatic...more

Fleurinord Law PLLC

Beyoncé vs. the IRS: The Surprising Details About Queen Bey’s $2.9 Million Tax Dispute

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Even global icons like Beyoncé, among the wealthiest entertainers on the planet, are not immune to IRS scrutiny. Recently, Queen Bey found herself entangled in a dispute with the Internal Revenue Service (IRS) over an alleged...more

Bowditch & Dewey

Massachusetts Tax Amnesty Announced

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The Massachusetts Department of Revenue (DOR) recently announced a tax amnesty program for non-filers and those with outstanding tax liabilities. From November 1 to December 30, 2024, most penalties for eligible taxpayers who...more

Miles & Stockbridge P.C.

Massachusetts Announces Limited Tax Amnesty

The Commonwealth of Massachusetts will offer a limited tax amnesty for certain “eligible taxpayers” from Nov. 1 through Dec. 30. “Eligible taxpayers” can forward and bring their tax liabilities up to date and receive a...more

Cadwalader, Wickersham & Taft LLP

Mixed Opinions on Penalty Relief for Corporate AMT Taxpayers

On April 15, the IRS released Notice 2024-33 (the “Notice”), offering limited relief from tax penalties for underpaying estimated income taxes arising from a corporation’s alternative minimum tax (“AMT”). The AMT imposes a...more

Kilpatrick

Around the Country: Recent Cases in Tax Penalty Abatement

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Introduction – What Is Tax Penalty Abatement? Audits can be an incredibly frustrating ordeal. From initial contact with tax authorities to digging up old financial records to possibly increasing tax liability, there are...more

Fox Rothschild LLP

IRS to Focus on High-Income Earners Who Have Not Filed Tax Returns Since 2017

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The IRS expects to send out over 125,000 collection letters to high-income taxpayers who did not file one or more federal income tax returns between 2017 and 2021. As part of the new collection initiative, approximately...more

Gray Reed

IRS Concedes Yet Another Form 3520 Related Penalty Case

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United States citizens and residents are often not aware of the myriad of foreign information return filing obligations that exist under federal tax laws.  For example, buried within the Code are reporting obligations...more

Gray Reed

IRS Sanctioned for Bad Faith on Supervisory Approval of Penalties While Proposed Regulations on the same Issue are Pending

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A hearing is scheduled for September 11, 2023 for interested persons and organizations to provide testimony on proposed regulations on the timing and approval process for penalties. Section 6751(b) provides that...more

Cadwalader, Wickersham & Taft LLP

Limited Partner Exception Challenged by Hedge Fund Legend

An investment management firm founded and owned by legendary investor (and New York Mets owner) Steve Cohen on August 11 filed a petition in Tax Court contesting an IRS audit adjustment in the amount of $344,063,484 for tax...more

Miller Canfield

A Remittance to the IRS May Not Always Operate as Intended

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A taxpayer against whom the IRS determines—not "assesses" but "determines"—a tax deficiency must decide whether to make a remittance to the IRS and if so, whether the remittance is to be treated as a "deposit" or as a...more

Holland & Knight LLP

Tax Court: IRS Lacks Authority to Assess Certain Foreign Information Return Penalties

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The U.S. Tax Court (USTC) on April 3, 2023, issued its opinion in Alon Farhy v. Commissioner, which held that the IRS lacks authority to assess certain foreign-related information return penalties pursuant to Section...more

Freeman Law

IRS Lacks Statutory Authority to Assess Certain Form 5471 Penalties

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The recent Tax Court decision in Farhy demonstrates that clever and novel arguments can carry the day in complex tax litigation matters.  In that case, the taxpayer stipulated that he:  (1) had Form 5471 filing obligations...more

Bilzin Sumberg

Playing Battleship with the IRS: Assessing the Damages

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In a prior post, I discussed the dangers of playing Battleship with the IRS. Recently, taxpayers made a move and scored a hit with the Tax Court’s  recently issued decision in Alon Farhy v. Commissioner, 160 T.C. No. 6 (April...more

Jones Day

Brazilian Tax Amnesty Program Temporarily Mitigates Unfavorable Change to Tax Proceedings (UPDATED)

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In Short - The Background: Most Brazilian companies face tax underpayment assessments in light of a complicated tax regime. The Lula government is planning to significantly expand government expenditures and thus needs to...more

Cadwalader, Wickersham & Taft LLP

Supreme Court Hands Taxpayers a Victory in FBAR Penalty Case

Taxpayers recently won a significant victory at the Supreme Court in a penalty case involving a non-willful failure to file a Report of Foreign Bank and Financial Accounts (“FBAR”) under the Bank Secrecy Act (the “BSA”)....more

Polsinelli

Major Win For Taxpayers: SCOTUS Limits FBAR Penalties to Per Report Not Per Financial Account

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After years of litigation, the United States Supreme Court, in Bittner v. United States, 598 U.S. ____ (2023), determined that the penalty for a non-willful failure to file a Report of Foreign Bank and Financial Accounts...more

Farrell Fritz, P.C.

Nassau County Commercial Real Property Tax Alert - UPDATED

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Annual Survey of Income and Expenses – ASIE-2022 - Pursuant to the Nassau County Administrative Code, Section 6-30, the Nassau County Department of Assessment (“the Assessor”) is requiring the submission of 2022 financial...more

Freeman Law

Tax Court in Brief | Mulu v. Comm'r | Accuracy-Related Penalty and No Reasonable-Cause Excuse

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Summary: In this non-precedential opinion (see section 7463(b)), the Tax Court addresses whether or not to uphold an accuracy-related penalty assessed to taxpayer, Ashenafi Getachew Mulu (Mulu). Mulu hired David...more

Farella Braun + Martel LLP

Federal and California Taxpayer Relief: Reprieve From Wet Winter Weather

2023 started California off with weather that escapes recent memory. Rain, snow, and surf seemed unrelenting for the first two weeks of January. While this spell of winter storms has brought snow to our slopes and refilled...more

Freeman Law

Tax Court in Brief | Decrescenzo v. Comm’r | Challenge to Notice of Deficiency and Penalties for Frivolous Arguments

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Taxpayer and petitioner, Joseph Decrescenzo (“Petitioner”) belatedly filed returns of income for seven years at issue (2007-2013). The IRS determined various differing deficiencies as to the years at issue and notified...more

Freeman Law

Tax Court in Brief | Mining v. Comm’r | Deficiency Determination and Penalties for Underreporting and Frivolous Arguments

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Summary: During 2016, Ryan Mining (Mining) was employed by Tasco, Inc. (Tasco), and it issued him Form W–2, Wage and Tax Statement, reporting wages of $116,000, no federal income tax withheld, Social Security tax withheld of...more

Freeman Law

Tax Court in Brief | Castro v. Comm’r | IRS Compliance with Written Supervisory Approval Requirement for Accuracy-Related...

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Short Summary: After an examination by a Revenue Agent, the IRS issued to the taxpayers a notice of determination of income tax deficiencies, a tax addition, and an accuracy-related penalty. In closing the examination, the...more

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