Is IRS Manger Approval Required for Computer Generated Penalties?

Houston Tax Attorney

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The IRS and the courts have invalidated penalties where the IRS fails to obtain IRS manager approval before assessing the penalty. It has done so in cases where the penalties are manually assessed by IRS personnel. But what about penalties that are automatically assessed by the IRS’s computers? The court addresses this in Atl & […]

Can Gambling Losses be Deducted as Casualty Losses?

Houston Tax Attorney

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If a taxpayer cannot deduct gambling losses given the restrictions on gambling losses, can they deduct them as casualty losses instead? What if the gambling loss are attributable to prescription medications known to cause compulsive gambling? The court addresses this in Mancini v. Commissioner, T.C. Memo. 2019-16. Facts & Procedural History The taxpayer diagnosed with […]

The IRS’s Math Error Powers

Houston Tax Attorney

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With our tax system, taxpayers are generally required to file returns to tell the IRS how much tax is due. This is no easy task as the tax reporting process can be confusing. Errors happen. Congress has authorized the IRS to correct mathematical and clerical errors made on tax returns. The IRS’s CCA 129453-17 memorandum […]

The Sec. 179D Government-Owned Building Allocation

Houston Tax Attorney

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Section 179D provides an incentive for building owners to install energy efficient systems. The IRS released CCA 2018-005, which addresses one of the controversial aspects of Sec. 179D–namely, the ability for government building owners to allocate the deduction to the designer of the energy efficient property. About Section 179D Section 179D was enacted in 2005, […]

Use of Accounting Board Order in Criminal Tax Case

Houston Tax Attorney

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If an accountant is disciplined by the accounting board, can the discipline be used to increase his criminal sentence for tax fraud when the accounting board’s discipline did not prohibit or address fraud? The court addressed this in United States v. Iley, No. 17-1269 (10th Cir. 2019). Facts & Procedural History The defendant was a […]

How to Allocate Tax Basis for Real Estate

Houston Tax Attorney

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If you sell real estate, you pay tax on the gain. Gain is the product of the sales price less tax basis. Tax basis in turn is the amount invested in the property. But how do you calculate and then prove tax basis for buildings located on the property when you sell some but keep […]

Is Election to Waive NOL Carryback Irrevocable?

Houston Tax Attorney

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You have to be careful when electing to waive the right to carry back a net operating loss. This is particularly true if there are items on your tax returns from earlier years that the IRS may eventually adjust if audited. The Bea v. Commissioner, No. 18-10511 (11th Cir. 2019), case provides an example of […]