Monthly Archives: September 2021

According to Law360, in the case of Denise Sadjian Curcio and Kenneth Curcio v. Commissioner, docket number 5733-19S, the U.S. Tax Court held that a woman wasn't responsible for a liability on taxes she filed with her former husband, because she lacked the tax knowledge to know the liability would be unpaid, the U.S. Tax Court said in a summary opinion.

Denise Curcio isn't responsible for paying off a 2014 tax liability because, even if she had reviewed the return her former husband filed for that year, she wasn't familiar enough with taxes to know an estimated payment on the return was time-barred, the Tax Court said. 

The Tax Court said the Internal Revenue Service decided to allow Curcio innocent spouse relief by the time the case went to trial, but the court had to determine Curcio's eligibility because her former husband argued she was liable. 

Her former husband argued she controlled an account she could have used to pay the liability when the return was filed, the Tax Court said.

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The Internal Revenue Service released guidance on September 1, 2021 that outlined forms on which it would accept electronic signatures, though the forms can be filed only on paper.

To help reduce burden for the tax community, the IRS allows taxpayers to use electronic or digital signatures on certain paper forms they cannot file electronically. The agency is balancing the e-signature option with critical security and protection needed against identity theft and fraud. Understanding the importance of electronic signatures to the tax community, the IRS offers an overview about using them on certain forms.

Types of acceptable electronic signatures

The IRS will accept a wide range of electronic signatures. An electronic signature is a way to get approval on electronic documents. It can be in many forms and created by many technologies. Acceptable electronic signature methods include:

1. A typed name typed on a signature block
2. A scanned or digitized image of a handwritten signature that's attached to an electronic record
3. A handwritten signature input onto an electronic signature pad
4. A handwritten signature, mark or command input on a display screen with a stylus device
5. A signature created by a third-party software

The IRS doesn't specify what technology a taxpayer must use to capture an electronic signature. The IRS will accept images of signatures (scanned or photographed) including common file types supported by Microsoft 365 such as tiff, jpg, jpeg, pdf, Microsoft Office suite or Zip.

E-signatures on certain paper-filed forms

The IRS allows taxpayers and representatives to use electronic or digital signatures on these paper forms, which they cannot file using IRS e-file:

• Form 11-C, Occupational Tax and Registration Return for Wagering;
• Form 637, Application for Registration (For Certain Excise Tax Activities);
• Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
• Form 706-A, U.S. Additional Estate Tax Return;
• Form 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions;
• Form 706-GS(D-1), Notification of Distribution from a Generation-Skipping Trust;
• Form 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations;
• Form 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts;
• Form 706 Schedule R-1, Generation Skipping Transfer Tax;
• Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
• Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return;
• Form 730, Monthly Tax Return for Wagers;
• Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit;
• Form 1120-C, U.S. Income Tax Return for Cooperative Associations;
• Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation;
• Form 1120-H, U.S. Income Tax Return for Homeowners Associations;
• Form 1120-IC DISC, Interest Charge Domestic International Sales – Corporation Return;
• Form 1120-L, U.S. Life Insurance Company Income Tax Return;
• Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons;
• Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return;
• Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts;
• Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies;
• Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B);
• Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship;
• Form 1128, Application to Adopt, Change or Retain a Tax Year;
• Form 2678, Employer/Payer Appointment of Agent;
• Form 3115, Application for Change in Accounting Method;
• Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts;
• Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner;
• Form 4421, Declaration – Executor's Commissions and Attorney's Fees;
• Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes;
• Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues;
• Form 8038-G, Information Return for Tax-Exempt Governmental Bonds;
• Form 8038-GC; Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales;
• Form 8283, Noncash Charitable Contributions;
• Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms;
• Form 8802, Application for U.S. Residency Certification;
• Form 8832, Entity Classification Election;
• Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent;
• Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement; and
• Elections made per Internal Revenue Code Section 83(b).

The forms are available at IRS.gov and through tax professional's software products.

Have IRS Tax Problems?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-92

Read more at: Tax Times blog

On August 25, 2021, the Competent Authorities of France and Germany agreed to automatically exchange country-by-country reports with the U.S.

According to the statements released by the Competent Authority of the U.S., French, German, and U.S. laws require multinational enterprise (MNE) groups to annually file a CbC report that conforms to the requirements of Action 13 of the Organization for Economic Cooperation and Development (OECD)/G20 Action Plan on Base Erosion and Profit Shifting (BEPS).

U.S. MNE groups must annually file Form 8975, Country-by-Country Report, with the income tax return of the ultimate parent entity to comply with this requirement. 

The Competent Authorities of The U.S. and France Are Negotiating Agreements To Allow For The Automatic Exchange of CbC Reports Between The U.S. And France and so are
The Competent Authorities of the U.S. and Germany.

Instead of waiting for these negotiations to conclude:

• The Competent Authorities of the U.S. and France have agreed to automatically exchange the CbC reports MNE groups file for fiscal years beginning in calendar 2021. The CbC reports will automatically be exchanged as soon possible after they are received and no later than 15 months after the last day of the fiscal year of the MNE group to which the report relates.

• The Competent Authorities of the U.S. and Germany have agreed to automatically exchange the CbC reports MNE groups file for fiscal years beginning in calendar 2020. The CbC reports will automatically be exchanged as soon possible after they are received and no later than 15 months after the last day of the fiscal year of the MNE group to which the report relates.

The Competent Authorities of France and Germany also intend to notify the U.S. when they perceive an error in a CbC report that may have led to incorrect or incomplete information reporting in the U.S. Similarly, the U.S. Competent Authority intends to notify its counterparts in Germany and France when it perceives an error in a CbC report that may have led to incorrect or incomplete information reporting in those countries. 

Have IRS Tax Problems?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-92

Read more at: Tax Times blog

An accountant's willful ignorance of tax understatements on client returns isn't enough to hold him liable for certain penalties, the Ninth Circuit said, vacating for the second time a California federal court's decision affirming Internal Revenue Service penalties against him.

In John Q. Rodgers v. U.S., case number 20-55378, in the U.S. Court of Appeals for the Ninth Circuit, John Q. Rodgers' "willful blindness" to the tax understatements on returns he prepared for clients isn't enough to hold him liable for penalties under Internal Revenue Code Section 6694(b)(2)(A), the appeals court said Monday. It sent the case back to the California federal court to determine if Rodgers had the "specific intent to defraud the government" as required under relevant precedent, the Ninth Circuit said.

"The court must determine whether Rodgers acted with the specific intent to understate the reported tax liabilities," the opinion said. "And because the district court did not make that finding, we vacate the order and remand for further proceedings on whether the willfulness standard is satisfied."

The IRS issued penalties against Rodgers for issues with some of his clients' taxes, including overstated deductions for salaries and wages, incorrect deductions for country club dues and overstatements of costs-of-goods sold, according to court filings. Rodgers paid some of those penalties and then sued for a refund.

In the California federal court's first decision in 2017, it said Rodgers acted willfully under Section 6694(b)(2)(A) and found him liable for penalties. His "reckless disregard" was enough to find he willfully understated those taxes, the lower court ruled.

The Ninth Circuit partially vacated that ruling in June 2019, finding that Rodgers' recklessness in lowballing clients' tax liabilities didn't mean he acted willfully within the meaning of the statute, according to the opinion.

But on remand, the lower court found in 2020 that Rodgers knew there was a good chance there were understatements on his clients' returns and avoided learning of the understatements, according to filings. That "willful blindness" was enough to find that his understatements were intentional, warranting the penalties, according to the court. 

In its opinion August 30, 2021, the Ninth Circuit found that the lower court's application of the "willful blindness" doctrine wasn't enough to find that Rodgers acted willfully in his erroneous tax preparation services. In United States v. Salerno, the Ninth Circuit had found that finding a tax preparer willfully understated a client's taxes required addressing whether the preparer had the specific intent to do so, according to the opinion.

"It Is Settled Law That Willfulness 
Under Section 6694(B)(2)(A) Requires
Specific Intent To Understate Tax Liability
On Tax Returns or Claims," The Ninth Circuit Said.

Have IRS Tax Problems?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-92

Read more at: Tax Times blog