Monthly Archives: August 2025

In a significant ruling handed down on August 18, 2025, the U.S. Court of Appeals for the Third Circuit confirmed the IRS’s authority to pursue unpaid taxes decades after the original return, if the fraud that led to a tax underpayment was committed by the taxpayer’s return preparer. This decision emerged from the closely watched case of Murrin v. Commissioner, case number 24-2037.

Stephanie Murrin, the appellant, found herself at the center of a long-running tax dispute due to errors on her old tax returns. These errors, the IRS contended, arose from fraudulent actions by her tax preparer. Notably, there was no claim that Murrin herself intended to evade taxes; the fraud was attributed solely to the professional she hired.

Can the IRS Pursue Old Taxes If a Preparer Committed Fraud?

Central to this case was whether the IRS could “reach back” more than 20 years to collect unpaid taxes when it was the preparer, rather than the taxpayer, who acted fraudulently. Normally, the IRS is bound by statutes of limitation, limiting how long after a return is filed they may pursue collection. An exception exists, however, in cases involving fraud. 

The Third Circuit ruled in favor of the IRS. The opinion, issued on August 18, 2025, states that the statute of limitations for tax collection is suspended in cases of fraud, regardless of whether the taxpayer herself participated in or even knew about the fraudulent activity. This means that if a return preparer commits fraud on a filing, the IRS can act to collect what’s owed, no matter how much time has passed.

Why This Matters

This case puts taxpayers on alert: you can be held responsible for fraudulent acts committed by the people you hire to prepare your taxes, even many years down the road. It’s a stark reminder of the importance of vetting professionals and maintaining personal oversight of your tax filings. For the IRS, the decision reinforces a powerful tool for tax enforcement, deterring potential tax fraud through the actions of preparers.

The Takeaway

Murrin v. Commissioner strengthens the IRS’s hand, confirming that taxpayers may have liability for their preparers’ misconduct, whether or not they had knowledge of it. 

 Have an IRS Tax Problem?

     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 (888-882-9243)

Sources: 

1.       https://www.law360.com/tax-authority/cases/6669b92710f9844ee6dacfc6

2.      https://www.law360.com/agencies/u-s-court-of-appeals-for-the-third-circuit

Read more at: Tax Times blog

According to DoJ, A Florida man pleaded guilty on August 18, 2025 before Magistrate Judge Kyle C. Dudek for the Middle District of Florida to conspiring to defraud the United States by operating an off-the-books payroll scheme. The plea must be accepted by a U.S. district court judge.

The following is according to court documents and statements made in court: Alexis Garcia conspired with others to operate an illegal, off-the-books cash payroll system for construction workers to avoid paying employment taxes to the IRS and to defraud workers’ compensation insurance companies. Between 2017 and 2019, Garcia managed and directed the operations of Tape Drywall Services Inc., located in Naples, Florida. Contractors entered into agreements with Tape Drywall to provide workers for various construction contracts and provided checks in the name of Tape Drywall for payment. Garcia and his co-conspirator would cash the checks and retain a small percentage as a fee. Garcia and his co-conspirator provided cash to the foremen who used the cash to pay the workers. In total, Garcia and his co-conspirator cashed over 3,600 checks totaling approximately $28 million. 

Garcia and his co-conspirator did not report the wages to the IRS and did not withhold Social Security, Medicare, and federal income taxes from those wage and pay them over to the IRS, as required by law. As a result, Garcia caused a loss to the United States of more than $4.2 million.

In addition, Garcia and his co-conspirator defrauded workers’ compensation companies by substantially misrepresenting the amount of Tape Drywall’s payroll. The misrepresentations resulted in substantially lower insurance payments.

The timely payment of these taxes is critical to the functioning of the U.S. government because, for example, they are the primary source of funding for Social Security and Medicare. 

Garcia is scheduled to be sentenced at a later date. He faces a maximum penalty of five (5) years in prison, as well as a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 Have Payroll 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 (888-882-9243) 

Read more at: Tax Times blog

The Second Circuit’s recent decision in Buller et al. v. Commissioner of Internal Revenue, No. 24-1557 (2d Cir. 2025), is a game-changer for taxpayers who miss the critical ninety-day deadline to petition the Tax Court after receiving an IRS notice of deficiency.

The Backstory

Mark Buller and Sarah Beatty received a notice of deficiency from the IRS regarding their 2018 income tax return. Under the Internal Revenue Code, they had ninety days to file a petition in Tax Court challenging the IRS’s findings. Unfortunately, their attorney filed the petition nine days late. As is routine, the Tax Court, following its longstanding precedents, found the lateness stripped it of jurisdiction and dismissed the case.

The Appeal and a Shift in the Law

Buller and Beatty didn’t give up. They appealed to the Second Circuit, arguing that the ninety-day deadline shouldn’t be a hard jurisdictional line but rather a procedural rule that, in some cases, could allow for flexibility if there’s a good reason, what’s known as “equitable tolling.”

In a ruling with far-reaching implications, the Second Circuit agreed. The court reasoned that recent Supreme Court decisions have drawn a sharp line between rules that truly limit a court’s power (“jurisdictional” rules) and those that just set up ordinary filing requirements (so-called “claim-processing rules”). The latter can sometimes be bent for equity’s sake.

The court specifically referenced the Supreme Court’s determination in Boechler P.C. v. Commissioner and other cases that deadlines like this one shouldn’t be treated as jurisdictional unless Congress clearly said so, which wasn’t the case here.

What This Means

The Second Circuit held that the ninety-day deadline in section 6213(a) is not jurisdictional, and is instead a claim-processing rule that can be subject to equitable tolling if circumstances justify it. This means the Tax Court can hear late petitions in rare cases where, for instance, the taxpayer was prevented from filing on time due to extraordinary circumstances, though taxpayers will still need to convince the court they meet these criteria.

The court sent Buller and Beatty’s case back to the Tax Court to decide whether their situation met the standard for equitable tolling.

Tax Practitioners And Affected Litigants Should Take
Note: While Deadlines Still Matter, For Some Late Filers,
The Courthouse Doors Are Not Forever Barred.

Why This Matters

Before this decision, missing the ninety-day filing deadline almost always spelled doom for a taxpayer’s Tax Court challenge, no matter the reason for the delay. Going forward, at least in the Second Circuit, taxpayers whose late filings result from circumstances beyond their control now have a shot at getting their day in court.

This aligns the Tax Court’s approach with modern Supreme Court doctrine and signals a more flexible, humanity-driven reading of procedural requirements, at least in cases where equity calls for a second look.

 Have an IRS Tax Problem?

     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 (888-882-9243)

Sources:

1.       https://law.justia.com/cases/federal/appellate-courts/ca2/24-1557/24-1557-2025-08-14.html

2.      https://kpmg.com/us/en/taxnewsflash/news/2025/08/second-circuit-90-day-time-limit-equitable-tolling.html

Read more at: Tax Times blog

On July 11, 2025, the IRS released a memo targeting audits of large corporate taxpayers, marking a significant modernization in how the agency approaches complex corporate tax examinations. This update, addressed to employees in the IRS Large Business and International (LB&I) Division, aims to reduce administrative burdens, improve efficiency, and make dispute resolution more accessible for taxpayers.

Phasing Out the “Acknowledgment of Facts” Process

One of the headline changes is the planned elimination of the “acknowledgment of facts” (AOF) information request starting in 2026. The AOF was him him him him him him while the group of him him him him him him him him him him him him him him him him him him him him to establish agreement on important facts between the IRS and taxpayers prior to issuing a notice of proposed adjustment. However, as the agency acknowledges in its new memo, participation from taxpayers in this process has been minimal. Many have found AOF to be cumbersome and of little value, arguing that the factual summaries provided are hard to evaluate without knowing how the IRS intends to apply the law. Bowing to this feedback, the IRS will phase out the AOF, hoping to foster a more streamlined and transparent audit process.

Expanding Accelerated Issue Resolution

The amended guidance also clarifies how the accelerated issue resolution (AIR) process applies, particularly in large corporate cases. The AIR procedure allows issues resolved during one audit cycle to be applied to other tax years for the same taxpayer. By making it clear that this process extends to substantial corporate cases, the IRS hopes to resolve recurring issues more efficiently and reduce redundant disputes in future audits.

Updates to Fast Track Settlement Procedures

Finally, the IRS has updated its fast track settlement program procedures. This program is designed to help taxpayers resolve disputes with the IRS quickly, ideally avoiding litigation. Under the new guidance, if IRS directors wish to deny a taxpayer’s request to participate in the fast track program, they must first notify the division’s deputy commissioner, adding an extra layer of oversight to ensure fairer access to alternative dispute resolution.

What This Means for Corporate Taxpayers

For large businesses, these changes are welcome news, promising shorter audits and improved opportunities to settle tax disputes amicably. Corporate taxpayers should consult with their advisors about how these changes might impact ongoing and future IRS examinations, as the agency seems committed to a more responsive and less adversarial audit environment.

The IRS's latest guidance demonstrates a willingness to adapt based on taxpayer feedback. By eliminating outdated processes and expanding successful programs, the agency is taking meaningful steps toward a more efficient tax system for large businesses.

 Have an IRS Tax Problem?

     Contact the Tax Lawyers at

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog