TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, September 21, 2017

Suing Someone for a False Information Return

ABA Tax Section (2017)Last week I went to the ABA Tax Section Meeting in Austin and really enjoyed attending a terrific panel on Section 7434.  The moderator was Professor Leslie Book, of Villanova School of Law and the presenters were Stephen Olsen, of Gawthrop Greenwood, PC; and Mandi Matlock, of Texas RioGrande Legal Aid Inc., Austin, TX.  

Continue reading

September 21, 2017 in ABA Tax Section, Tax, Tax Practice And Procedure | Permalink | Comments (2)

Friday, September 15, 2017

WaPo: The GOP's War On The EITC

EITCIn this op-ed in the Washington Post, columnist Catherine Rampell comments on a proposal in the Budget Committee Report 115-240 explaining the current budget legislation.  It's a proposal to tighten up processing of tax returns claiming the Earned Income Tax Credit (ETIC).  She writes:

Continue reading

September 15, 2017 in Gov't Reports, News, Tax, Tax Policy in the Trump Administration, Tax Practice And Procedure | Permalink | Comments (7)

Wednesday, September 13, 2017

Privatizing Tax Collection: The Idiocy Continues

Congress seems to be on an unceasing quest to undermine effective tax collection (for why I choose those words see my rant here).  In what can only be described as yet another boneheaded move,  Congress included a provision in the Fixing America’s Surface Transportation (FAST) Act in 2015 that required the Service to out-source collection work to private collection agencies (PCA's).

Continue reading

September 13, 2017 in ABA Tax Section, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Reforming Tax Administration

The current discussion about tax reform is focused on reforming substantive tax law and not tax administration.  Last April, however, a group of tax practitioner organizations put out a paper calling for tax administration reform.  You can find the proposal on the AICPA website here.

The nine practitioner organizations include the AICPA, the National Association of Enrolled Agents, and the National Association of Tax Professionals.  Notably absent from the list of practitioner groups are the main tax lawyer organization, the ABA Section on Taxation.

Continue reading

September 13, 2017 in ABA Tax Section, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (1)

Monday, September 11, 2017

Contesting Tax Liability In A Collection Due Process Hearing

Broadly speaking, tax administration (as currently structured) consists of two main functions:  determining tax liability and collecting the tax liabilities so determined.   There is, however, some overlap because taxpayers sometimes have the opportunity during the tax collection process to get a re-determination of the underlying tax liability.  The main opportunity comes in the Collection Due Process (CDP) hearing.  This is an administrative hearing conducted by the IRS Office of Appeals and is subject to judicial review by the Tax Court.   Two recent Tax Court cases — Mohamed v. Commissioner (TC Sum. Op. 2017-69) and Bruce v. Commissioner (TC Memo. 2017-172) — illustrate just how narrow this opportunity is for taxpayers.  To me, they teach the take-home lesson that the best shot taxpayers have at getting the most favorable result is to respond early and often to tax notices.  Taxpayers who wait are the taxpayers who cry.  For a lesson that Mohamed teaches about tax return preparer penalties see Les Book's great post here.  More below the fold.

 

Continue reading

September 11, 2017 in New Cases, Tax Practice And Procedure | Permalink | Comments (3)

Thursday, September 7, 2017

Dealing With IRS Scammers (And How To Tell They Are Not Private Debt Collectors)

Readers will recall that Congress, in §32102 of the 2015 (FAST) Act, amended IRC §6306 to force the Service to outsource some collection inventory to private collection agencies.

Now, I have no doubt that readers of this blog are totally compliant in their taxes.   And if any happen to be delinquent in their taxes, I have no doubt they are not in the category of delinquent taxpayers who face collection from private collection agencies.   But I also suspect many readers have received questions about the program from clients, friends, family members, workplace colleagues, neighbors, and others.

Continue reading

September 7, 2017 in Gov't Reports, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Wednesday, September 6, 2017

The (Lack Of) Human Touch In Collecting Taxes

The National Taxpayer Advocate Nina Olsen has a blog post here that is well worth your time to read.  It's about the Service's automated levy program called FPLP (Federal Levy Payment Program).  

One way the Service tries to collect unpaid taxes is by looking for people who owe the delinquent taxpayer money and snagging those payments.  That's called a levy.    FPLP is a computer program designed to snags payments owed by the federal government to delinquent taxpayers.  Now, some people consider it an irony that one hand of the federal government actually sends payments to many delinquent taxpayers who owe the federal government money. Notably, however, FPLP hits what are commonly viewed as "safety net" payments from Social Security and Federal Retirement programs.  So other people consider it an irony that one hand of the federal government would partially undo the safety net payments made by the other hand.

Continue reading

September 6, 2017 in Gov't Reports, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Tuesday, September 5, 2017

The Tax Consequences Of Hurricane Harvey (And Other Natural Disasters)

Hurricane HarveyThe Service has put up a very useful and comprehensive webpage titled "Help for Victims of Hurricane Harvey."  The page contains excellent information about all the different actions the Service takes in response to a natural disaster and has links to all kinds of useful sites. 

The Texas State Comptroller has a similarly useful webpage that describes the state and local tax relief (such as exemption from hotel taxes).

 

Continue reading

September 5, 2017 in IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (2)

Monday, September 4, 2017

The Evilness Of Section 6511

Tax Court (2017)Last week, in Borenstein v. Commmissioner, 149 T.C. No. 10 (Aug. 30, 2017), the Tax Court was asked to apply Section 6511 contrary to its very, very intricate terms.  The Court declined to do so.  That meant that a taxpayer lost out on a $30k+ refund.   Ms. B. had paid about $112k in taxes by the due date of her 2012 return (April 15, 2013), but she did not file the return.  While she did get the 6 month extension she still failed to file a return by October 15, 2013.  The months went by — 22 of them— before the Service was kind enough in June 2015 to send her an NOD but was unkind in slamming her with an asserted $1.2m deficiency.   You know that drill.  Ms. B. then quick-like-a-bunny filed a return that September, showing a $79k liability.  The Service said "oh, ok, that's good" and accepted her return as accurate.  So she now only needed to get her refund, right?  Wrong.  See below the fold for why.

Continue reading

September 4, 2017 in New Cases, Tax Practice And Procedure | Permalink | Comments (4)