Houston Tax Attorney: Tax Disputes Blog

When the IRS Raises A New Matter on the Eve of Trial

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During the course of litigating a tax matter, the IRS may increase the amount of tax, penalties, and interest that it alleges the taxpayer owes. The IRS is typically allowed to do this. If it does, the IRS may have a harder time prevailing on this type of issue. This “new matter” rule was recently […]

Deducting Fringe Benefits for Family Members

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Small business owners often look for ways to reduce their taxes.  With family businesses, these plans often involve employing the owner’s children.  This raises the question of whether a small business owner employ their children as independent contractors and deduct seemingly personal expenses for the children as fringe benefits if the children did in fact […]

The Government’s Ability to Recoup Tax Preparation Fees

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Tax preparers can grow their businesses in a short period of time by filing fraudulent tax returns.  As word spreads about the size of the refunds these preparers are able to secure for their clients, the preparers pick up new clients and increase the amount of fees they earn.  These noncompliant tax return preparers are […]

Credit for Employment Taxes Reported in Error for Another Entity

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If employment taxes are paid by one legal entity but incorrectly reported to the IRS for another legal entity, can the entity that paid the taxes get credit for the payment? The IRS said ‘no;’ the U.S. Tax Court said ‘yes.’ The case is E.C.C.B.A. v. Commissioner, T.C. Memo. 2018-55. Facts & Procedural History The case […]

Transferring Property to a Spouse After IRS Lien

Houston Tax Attorney

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There are a number of difficult questions that come up when one spouse owes the IRS and also owns property jointly with their spouse. The question is often whether the spouses can transfer the property to the non-liable spouse. The answer is, maybe. The court recently addressed this in U.S. v. Gerard, No. 1:14-CV-67-TLS (N.D. […]

Applying Tax Overpayments to Later Years is Usually a Bad Idea

Houston Tax Attorney

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Instead of requesting a refund, taxpayers can ask the IRS to hold the overpayment and apply it to the taxpayer’s tax liability for the following year. These tax payment credits can result in significant headaches. The recent Schuster v. Commissioner, No. 17-11647 (11th Cir. 2018) case provides an example of why taxpayers should request refunds […]

Establishing Tax Basis in IRA Contributions

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Contributions to IRAs are deductible.  If not deductible, the taxpayer has basis in his IRA so that this amount is not taxable when taken out of the IRA.  The idea is that the taxpayer probably paid income taxes on the money prior to putting it into the IRA and should not be taxed on it […]