Category Archives: criminal tax law

According to Law360, The U.S. Supreme Court on June 24, 2024 said in U.S. v. Miller, case number 23-824, that it would review a Tenth Circuit decision that found that the bankruptcy trustee of a defunct Utah company seeking Chapter 7 protection could recover $145,000 in tax payments from the IRS.

In an order list, the Supreme Court said it would grant a request by the government to review the Tenth Circuit's June 2023 decision, which the U.S. said created a circuit split. 

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

In 2023, the first full year funding from the Inflation Reduction Act (PL 117-169) became available to the IRS, the agency focused on hiring customer service representatives now, there is a shift towards onboarding new examination staff, according to the head of the agency.

Speaking on June 13, 2024 at a joint conference hosted by the IRS and the Tax Policy Center, IRS Commissioner Danny Werfel said Inflation Reduction Act funds in fiscal year 2024 are not only bringing in new auditors and lawyers, but also data scientists, engineers, and industry subject matter experts, including those in the digital asset space.

Calling Hiring A "Multi-Pronged Effort," This Wave Is
Centered Around Increasing Scrutiny On Those On
The IRS' "High Risk" List, Including Tax Delinquent Millionaires, Non-Filers, And Complex Partnerships
Seeking To Avoid Tax Exposure.

Due to years of underfunding, IRS audit rates of large corporations and multimillionaires fell between 2010 and 2021. Overall staffing in the agency’s compliance offices declined 30% during that time.

The Agency's Efforts Have so Far Recovered
$520 Million from Millionaires Who Have Either
Not Filed Their Taxes or Failed to Pay Their Tax Debt.

Through a combination of increasing compliance staff and recently announced targeted enforcement campaigns against high-risk taxpayers making over $400,000 a year, the IRS can demonstrate "that this is a positive return on investment" by closing the overall gap between taxes owed and taxes paid, Werfel said of the inflation bill's funds.

He added that investments in artificial intelligence will assist in audit selection and recognizing areas "where tax evasion is occurring," such as transfer pricing, using "much more sophisticated analytics."

Providing Context On Why Expanding The IRS Workforce
Is Necessary, Werfel Said That Before The Enactment Of
The Inflation Reduction Act, The Agency's Staff Size
"Was Roughly The Same As It Was In The Late 70s."

Continuing, he mentioned that leaders of other countries' tax authorities have commented to him about "how small the IRS is on a per capita basis compared to the other nations."

Since 2022, the IRS has added about 11,000 full-time positions, including staff working on audits as well as those tasked with customer service and other jobs. The agency plans to add an additional 14,000 full-time positions with funding from the Inflation Reduction Act by fiscal year 2029. Some new hires will be replacing people retiring or leaving. The increases would bring the number of total IRS employees to 102,500, Werfel said.

Have an IRS Tax Problem?

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:

CNN

Daily Tax Report

Read more at: Tax Times blog

The U.S. Supreme Court upheld the 2017 federal tax overhaul's mandatory repatriation tax on June 20, 2024, finding the measure applies to the earnings of foreign corporations with U.S. shareholders and therefore does not raise constitutional questions about taxing unrealized income. 

In a 7-2 ruling, the justices found that the repatriation provision operates in a way that does not require the high court to weigh whether the Constitution's Sixteenth Amendment prohibits Congress from taxing unrealized income. Specifically, the majority ruled that the measure, known as the mandatory repatriation tax under IRC §965, taxes income that was realized by foreign corporations with U.S. shareholders, and Congress has the authority to attribute a company's realized and undistributed income to shareholders for taxation.

Justice Brett Kavanaugh, who wrote the majority's opinion, said the court 

"Need Not Resolve That Disagreement Over Realization"
To Decide This Case, Adding That Those Are
Potential Issues For Another Day."

Justice Kavanaugh, pointed out that the MRT taxes a shareholder on income that is clearly realized by a controlled foreign corporation, so the real question is “whether Congress may attribute an entity’s realized and undistributed income to the entity’s shareholders or partners, and then tax the shareholders or partners on their portions of that income.”

The majority found support for this proposition and dismissed petitioners’ attempts to distinguish  IRC §965 from the many taxes based on the undistributed income of partnerships, S-corporations, controlled foreign corporations, and the like.

In contrast with the majority’s narrow approach, four justices: Justice Barrett, in a concurrence joined by Justice Alito, and Justice Thomas, in a dissent joined by Justice Gorsuch all endorsed the existence of a constitutional realization requirement. 

These justices effectively invite future challenges to Congress’s authority to tax various types of income or gains under the Sixteenth Amendment.

Have an IRS Tax Problem?

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:

Law360

Kostelanetz

Read more at: Tax Times blog

The U.S. Supreme Court on June 6, 2024 affirmed a decision denying a tax refund to the estate of an owner of a building materials company that used a payout from his $3.5 million life insurance policy to purchase his shares in the business in Thomas A. Connelly v. U.S., case number 23-146,

In a unanimous opinion, the court affirmed a summary judgment decision by the Eighth Circuit, which ruled last year that the life insurance proceeds, used to fund a stock redemption by Crown C Supply following the death of its co-owner Michael Connelly, were an asset that increased Crown's value, inflating the value of Connelly's stock and driving up the tax liability of his estate.

The court rejected the estate's argument that the proceeds were a stock redemption that should be treated as a liability for Crown C Supply that reduced its value for purposes of calculating estate tax, similar to any debt.

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