Houston Tax Attorney: Tax Disputes Blog

Litigation Award for Damage to Dairy Farm Ordinary Not Capital

Houston Tax Attorney

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If a dairy farmer receives an award for damages to the farm, is the damage award capital or ordinary?  The distinction is important.  Unlike ordinary income, capital gains are generally afforded lower tax rates and not subject to self-employment taxes.  The court considered this fact pattern in Allen v. United States, No. 16-C-1412 (E.D. Wis. 2018). Facts & […]

Whistleblower Using Public Information Cannot Remain Anonymous

Houston Tax Attorney

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We have previously written about the court’s position that serial whistleblowers, those who submit more than one whistleblower claim with the IRS, cannot remain anonymous when litigating the right to their whistleblower claims.  In Whistleblower 7208-17 v. Commissioner, T.C. Memo. 2018-118, the court confirms that this extends to those who use public information to submit […]

When Forged Signatures Suffice: The Tacit Consent Exception

Houston Tax Attorney

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A tax return has to be signed to be valid.  But what if the return is signed by someone else?  Is a tax return with a forged signature a valid tax return?  The court addressed this in Coggin v. United States, No. 1:16-CV-106 (M.D.N.C. 2018). Facts & Procedural History The taxpayer relied on her attorney to […]

Avoiding Cancellation of Debt Using Rebates or Refunds

Houston Tax Attorney

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Can taxpayers avoid cancellation of debt income by structuring debt reductions as rebates or refunds?  The court touched on this issue in French v. Commissioner, T.C. Summary Opinion 2018-36. The Facts & Procedural History The taxpayers borrowed money to purchase a home.  When they failed to make their payments on the mortgage, the bank made contacted […]

Construing Tax Laws Tied to Activities, Time for a New Rule?

Houston Tax Attorney

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When Congress provides a tax benefit contingent on some activity, there is often a question as to whether the activity can be read broadly to encompass many sub-activities or has to be read narrowly.  The NextEra Energy, Inc. v. United States, No. 17-12304 (11th Cir. 2018) case provides a good example of the subjective distinctions taxpayers have make […]

Perception Can Be As Important as Substance in Tax Disputes

Houston Tax Attorney

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Taxpayers voluntarily submit information to the IRS.  The IRS not only evaluates the substance of this information, but also the taxpayer’s candor in preparing and providing the information.  The perception of candor is just as important as the substance in many cases.  The Guess v. Commissioner, T.C. Memo. 2018-97, provides an example of how things can […]