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IRS Collects $1 Billion in Past-Due Taxes From Millionaires as Compliance Efforts of High-Wealth Groups Continue , corporations, partnerships

July 11, 2024

On October 20, 2023 we posted IRS Using Inflation Reduction Act Funding To Ensure Large Corporations & High Income Earners Pay Taxes Owed where we discussed that the IRS announced new initiatives to ensure large corporations pay taxes owed. This is in addition to the initiatives to improve compliance among high-income individuals and complex partnerships.

Now according to IR-2024-185 dated July 11, 2024, as part of continuing compliance efforts under the Inflation Reduction Act, the Internal Revenue Service announced the agency has surpassed the $1 billion mark in collections from high-wealth taxpayers with past-due taxes.

As part of larger efforts taking place, the IRS has stepped up activity specifically on 1,600 individuals whose incomes were more than $1 million per year and who each owed the IRS more than $250,000 in recognized tax debt. Since last fall, this IRS compliance effort has generated more than $1 billion in collections from this group, with work continuing in this area.

“With this collection activity, the IRS passed an important milestone in our effort to improve compliance and ensure fairness in the tax system,” said IRS Commissioner Danny Werfel. 

“Our Increased Work In This Area Means These Past-Due 
Tax Bills From High-End Taxpayers Are No Longer Being
Left On The Table, Like They Were Too Often In The Past.”

"The Collection Results Achieved In Less Than A Year Reveal The Magnitude Of What Can Be Achieved Over The Long
Run As Our Inflation Reduction Enforcement Continues
To Ramp Up In The Months Ahead.”

“We continue working to add staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law,” Werfel said. “The additional resources the IRS received under the Inflation Reduction Act are making a difference, both for taxpayers who play by the rules and those who don’t.”

Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated maneuvers that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is continuing to take action to close this gap.

Out of a total of 1,600 of these cases, the IRS has assigned 1,500 to revenue officers, with over $1 billion collected so far. The $1 billion collected through spring represents payments from over 1,200 individuals, with the IRS anticipating the figure to grow in the months ahead.

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)

 

Read more at: Tax Times blog

Fishermen’s Sea-Duction Results in Jail Time

July 11, 2024

According to the DoJ, a Connecticut man pleaded guilty today to evading taxes on income he earned as a commercial fisherman.

According to court documents and statements made in court, Brian Kobus, of Durham, Connecticut, worked as a commercial fisherman and deckhand for fishing companies in Massachusetts. 

After each fishing trip, the companies paid him by check. Despite receiving over $1.4 million in fishing income between 2011 through 2013, and 2017 through 2021, Kobus did not file federal income tax returns or pay the taxes that he owed. 

To conceal the source and disposition of his income from the IRS, Kobus regularly cashed his paychecks from the fishing companies and used the cash to fund his lifestyle. In total, he caused a tax loss to the IRS of approximately $377,839.90.

Korbus is scheduled to be sentenced on October 16, 2024 and faces a maximum penalty of five (5) years in prison. He also faces a period of supervised release, restitution and monetary penalties. 

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)

 

Read more at: Tax Times blog

The Demise of Chevron Will Result In Increased Treasury Regulation Challenges

July 3, 2024



According to Law360, many tax practitioners had been eagerly awaiting the decision in the Loper Bright case because the IRS has long relied on the Chevron doctrine, established in a 1984 opinion to defend tax regulations in litigation.

The Supreme Court decided to weigh in on the fate of Chevron last year after fishing industry plaintiffs in the Loper Bright case and a similar one called Relentless v. Department of Commerce asked the justices to overturn Chevron to undermine a 2018 National Marine Fisheries Service rule that required fishers to pay part of the cost of having federal compliance monitors aboard their ships.

In Siding With The Fishing Groups, A Majority Of Justices
Held That Chevron Improperly Prioritized The Executive Branch's Legal Interpretations Over The Judicial Branch.


Chevron deference was "misguided because agencies have no special competence in resolving statutory ambiguities. Courts do," the Supreme Court's majority opinion said.

In response to the opinion, U.S. Tax Court Judge Elizabeth Ann Copeland, speaking On June 28, 2024 at New York University School of Professional Studies' tax controversy forum in New York said Treasury and the IRS do have special competence in tax law. 


The Tax Court, She Said, Will Continue To Give 
Considerable Credence To The Agencies' Rules.


Meanwhile, practitioners said the decision will likely embolden more people to file lawsuits against tax regulations they dislike because the IRS no longer has Chevron to lean on.

"Now the IRS will have to defend its regulations on the merits based on what the tax code actually says," said Rob Kovacev, a member at Miller & Chevalier Chtd said.

However, while the Loper Bright decision provides ammunition for taxpayers to dispute regulatory interpretations they disagree with, Tom Cullinan, who was counselor to former IRS Commissioner Chuck Rettig and is now with Chamberlain Hrdlicka White Williams & Aughtry, said that outcome may come at the cost of reduced tax certainty.

One option for the IRS to try to quickly provide some certainty and clarity on tax laws is to issue so-called subregulatory guidance such as notices, announcements, revenue rulings and revenue procedures. 

However, such regulatory guidance does not have the force of law, Michelle Abroms Levin, shareholder at Dentons Sirote, said.

Subregulatory guidance can also be "susceptible to a challenge because there won't be as much of a record to support it unless the IRS makes the record internally," Levin said.

Another option for taxpayers seeking certainty about tax laws and regulations is to challenge them in court and let the judges decide, she said. But there's no guarantee they will get the answer they want, Levin said.

Moving forward, practitioners said, when promulgating rules, the IRS may have to build upon its recent process of actively soliciting public feedback and providing an elaborate explanation in the preamble to regulations explaining why the agency wrote the rules the way it did. 

The IRS has pursued this process in response to recent losses in several lawsuits that challenged tax guidance, such as the listing notices on syndicated conservation easements, for failure to follow the public comment requirements under the Administrative Procedure Act.

JUST IN: The U.S. Supreme Court vacated and remanded on July 2, 2024 a decision denying a whistleblower award to a tipster who reported an improper $60 million tax deduction to the IRS, saying the D.C. Circuit should reconsider its decision following the high court's ruling that overturned the Chevron doctrine.




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)

 

Read more at: Tax Times blog

Tax Court Says 90 Day Deadline For Redetermination of Employment Status Does Not Apply!

June 28, 2024

According to Law360, a jewelry company's one-day-late filing of a petition for reconsideration of an employment tax determination does not deprive the U.S. Tax Court of jurisdiction in the case, the court said On June 25, 2024, denying the IRS' attempt to get the case tossed in Belagio Fine Jewelry Inc. v. Commissioner, U.S. Tax Court docket number 35762-21.

Since Congress did not clearly state that the 90-day deadline to file for a redetermination of employment status is a jurisdictional requirement, the court does not lose jurisdiction based on Bellagio Fine Jewelry Inc.'s late filing, Judge Travis A. Greaves said in the opinion. The Internal Revenue Service had moved to dismiss the case for lack of jurisdiction. 

Judge Greaves further said the relevant historical treatment of Section 7436(b)(2), which established the deadline, also doesn't demonstrate that Congress intended for it to be jurisdictional.

Following an audit, the IRS determined in 2021 that the company had an unreported employee in 2016 and 2017, saying that it owed employment taxes as well as other penalties, according to the court. 

The Company Mailed Its Petition Contesting This Determination To The Court Four Days Prior To The Deadline To File It,
But The Petition Showed Up One Day Late.

The company also argued that the 90-day deadline should be subject to equitable tolling, but the court said it would reserve judgment on that argument until a proper dispositive motion regarding the matter is presented.

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)

 


Read more at: Tax Times blog

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