Category Archives: criminal tax law

According to Law360, the Internal Revenue Service Office of Chief Counsel is looking to hire as many as 200 more attorneys to take on abusive tax schemes, the agency said on January 21, 2022.

The IRS said the chief counsel's office is looking to recruit attorneys for jobs at more than 50 locations across the country, including in Washington, D.C., in order to fight tax schemes including abusive microcaptive insurance arrangements and syndicated conservation easements.

Attorneys who are hired will serve on trial teams, handle U.S. Tax Court cases and provide legal advice to IRS staff conducting audits, as well as perform other duties, the agency said.

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 Tax Court found in Willetts, TC Summary Opinion 2021-39, that an individual was entitled to the refund he claimed on his 2014 return. The Form 1040 the individual mailed to the IRS on April 14, 2018, was a properly filed return even though the IRS rejected it due to possible identity theft.

A taxpayer must submit a refund claim during the "limitations period." The limitations period ends on the later of: (1) three years from the time the relevant return is filed, or (2) two years from the time the tax was paid (limitations period). (Code Sec. 6511(a))

The taxpayer, James Willetts, got an extension, to October 15, 2015, to file his 2014 return. Willetts eventually mailed this return, on which he claimed a refund, to the IRS on April 14, 2018. The IRS received Willetts' 2014 Form 1040 on May 2, 2018, but did not process the return after deeming it "a return that may have been the result of potential identity theft."

The IRS did not dispute that Willetts had an overpayment for 2014. Rather, the IRS argued that Willetts failed to file a refund claim within the limitations period.

According to the IRS, Willetts' 2014 return wasn't "filed" on April 14, 2018, because the IRS rejected that return. Instead, the IRS argued, Willetts filed his 2014 return on July 29, 2019, when he submitted to the IRS a copy of his 2014 Form 1040. Therefore, Willetts failed to file his refund claim before the limitations period ended on October 15, 2018.

The Tax Court Determined That Willetts' 2014 Return Was "Properly Filed" On April 14, 2018.

First, the Tax Court determined that the 2014 Form 1040 Willetts submitted to the IRS on April 14, 2018, was a "return" under the test in Beard, (1984) 82 TC 766. Under the Beard test, a document is a return for limitations purposes if:

1. there is sufficient data to calculate a tax liability,

2. the document purports to be a return,

3. there is an honest and reasonable attempt to satisfy the requirements of the tax law, and

4. the taxpayer executed the document under penalties of perjury.

Next, the Tax Court determined that Willetts' 2014 return was filed on or before May 2, 2018. According to the Court, a return is considered filed when it is "delivered, in the appropriate form, to the specific individual or individuals identified in the Code or Regulations." (Allnut, TC Memo 2002-311)

In addition, a valid return is deemed filed on the day it is delivered, regardless of whether the IRS accepts it. (Blount, (1986) 86 TC 383)

The return Willetts mailed to the IRS on April 14, 2018, was delivered to the IRS on May 2, 2018. Thus, Willetts return was filed on the date it was delivered to the IRS, May 2, 2018. 

Since Willetts refund claim was embedded in his 2014 return his refund claim was filed concurrently with that return. Thus, Willetts' refund claim was filed on May 2, 2018, before the three-year period of limitation expired on October 15, 2018.

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 honky-tonk bar under neon lights on the town square serves Grand Teton Amber Ale and Yellowstone Lemonade. The Cowboy Coffee Co. offers bison chili and the Five & Dime General Store sells Stetson hats and souvenirs made from bullets. 

A dozen international clients who created Wyoming trusts were identified in the Pandora Papers, a trove of more than 11.9 million records obtained by the International Consortium of Investigative Journalists and shared with The Washington Post, exposing the movement of wealth around the world. The documents offer a rare look at Wyoming’s discreet financial sector and the people who rely on its services.

For years, anti-money laundering experts and law enforcement have warned federal and state lawmakers that suspect money was flowing into U.S. tax havens, eluding taxing authorities, creditors and criminal investigators. In Wyoming, with the support of state lawmakers, the industry charged ahead, promoting a suite of financial arrangements to potential customers around the world.

Click here to read the full story : International Consortium of Investigative Journalists

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

Him A Louisiana doctors' ex-wife isn't on the hook for a deficiency on taxes she and her then-husband filed for 2015, the U.S. Tax Court said in Bradley M. Blappert and Catherine M. Blappert v Commissioner, docket number 10417-18, on January 8, 2022.

Catherine Blappert met Bradley Blappert, a physician, when she was working as a medical sales representative. The Blapperts married in 2005 and had four children during their marriage. In early 2013, Dr. Blappert opened a medical practice, Peak Medical Partners LLC (Peak Medical).

Throughout 2015, the Blapperts were married, and each of them earned income. Dr. Blappert was the primary income earner, and he had income from multiple sources. His medical practice received payments from insurance companies, which was the principal source of income. The practice also received patient copayments by credit card, which were processed using Square, a payment processing service. Dr. Blappert also received nonemployee compensation for providing contract medical services in settings outside his own practice. Ms. Blappert worked part-time as a sales representative for Peak Medical and a surgical center in the same building as Peak Medical for part of 2015. For her work with Peak Medical, she earned wages of $36,479.

Peak Medical employed professionals to handle its bookkeeping and finances. From the outset, Peak Medical employed an office manager to help with finances. The office manager handled both insurance payments and credit card payments. Dr. Blappert also hired a certified public accountant (CPA) for both the medical practice and the preparation of the Blapperts' personal tax return. Ms. Blappert delivered documents to the CPA if Dr. Blappert requested, but she was not otherwise involved with Peak Medical's bookkeeping, finances, or taxes. She did not participate in Dr. Blappert's meetings with the office manager or the CPA.

The Blapperts' have conflicting views of Ms. Blappert's role in Peak Medical's finances. Ms. Blappert characterized herself as having no meaningful role in the finances of Peak Medical, whereas Dr. Blappert characterized Ms. Blappert as "a partner" in the business, as having transacted with and accessed Peak Medical's bank accounts, and as having received a significant portion of Peak Medical's earnings as her wages.

Dr. Blappert's testimony in this regard was not credible. There is no evidence that Ms. Blappert was a partner in the business. Although Peak Medical has the word "partners" in its name, the Blapperts' tax return identifies Peak Medical as a sole proprietorship and Dr. Blappert as the proprietor. Likewise, there is no evidence of Ms. Blappert accessing Peak Medical's accounts while the business was in operation. The only record of Ms. Blappert transacting on behalf of Peak Medical is three withdrawals that she made from Peak Medical's bank accounts after it had wound down its operations. Lastly, at trial, Dr. Blappert characterized Ms. Blappert's approximately $36,000 of wages as a sales representative for Peak Medical as constituting a substantial portion of the business's profit. But the Schedule C, Profit or Loss from Business, shows gross receipts of nearly $650,000, and a net profit of approximately $276,000, after deducting for wages and other expenses. In sum, the documentary record conflicts with Dr. Blappert's testimony; there is no evidence of Ms. Blappert having any role in Peak Medical's finances.

Ms. Blappert's main role in 2015 was in the home. Because Dr. Blappert worked long hours, Ms. Blappert managed the household and served as the primary caregiver for the children, one of whom had special needs. The Blapperts maintained a household account that Ms. Blappert used to pay household expenses. She also made expenditures related to the children, including their Catholic school tuition.

Dr. Blappert began winding down his medical practice the fall of 2015. Peak Medical ceased operations in December 2015, and Dr. Blappert started a new job with Prime Healthcare in January 2016. In December 2016, Ms. Blappert made a total of three withdrawals from Peak Medical's two accounts, which were separate from the Blapperts' household account. She believed that she and Dr. Blappert were closing out the Peak Medical accounts because the business was no longer in operation.

The Blapperts filed a joint tax return for 2015. When Ms. Blappert signed the return, she believed that she and Dr. Blappert reported all of their income, and nothing gave her reason to believe otherwise. She knew Dr. Blappert had income from Peak Medical and contracts for his medical services, but she did not know the amounts. Ms. Blappert signed the return after reviewing the first page. She did not scrutinize the entire return because she did not know about the finances of Peak Medical and because the Blapperts had hired a CPA to prepare the return.

The Blapperts led a lifestyle in 2015 that was commensurate with their reported income. Their largest expenditure was for their children's Catholic school tuition.

According to information reported to the Commissioner by third parties, the Blapperts underreported Peak Medical's income by $108,318. The Commissioner mailed the Blapperts a notice of deficiency determining an income tax deficiency of $41,204. The Commissioner also determined a substantial understatement penalty under section 6662 and an addition to tax under section 6651(a)(1). The Blapperts resided in Louisiana when they timely filed a petition for redetermination.

After filing the petition, the Blapperts separated. They began living apart in January 2019. In June 2020, they divorced. While this deficiency case has been pending, Ms. Blappert submitted to the Commissioner a Form 8857, Request for Innocent Spouse Relief.

Catherine Blappert neither knew nor had reason to know that her ex-husband had underreported income from the medical practice he owned in 2015, so she is eligible for innocent spouse relief, the Tax Court said. The court said it was reasonable for Blappert to be unaware of the underreporting because she wasn't involved in the practice's bookkeeping or finances, and the couple lived a life commensurate with the reported income.

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 (888-882-9243)

Read more at: Tax Times blog