Houston Tax Attorney: Tax Disputes Blog

The Dilemma: File A Timely or An Accurate Tax Return?

Houston Tax Attorney

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If you have an ongoing dispute with the IRS for one or more years and the outcome of that dispute will impact the current year, can you take a wait and see approach to filing the current year tax return?   The Namakain v. Commissioner, T.C. Memo. 2018-200, case provides an opportunity to consider this question. Facts […]

Court Clarifies Inventory Capitalization Rules for Producers

Houston Tax Attorney

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There are a few items that are low hanging fruit that make for easy adjustments for IRS auditors.  The adjustment for indirect costs is an example of such an adjustment that can be made for any taxpayer that has inventory.  The recent Patients Mutual Assistance Collective Corporation v. Commissioner, 151 T.C. No. 11 (2018), case provides […]

For Early IRA Distribution, Compulsive Gambling Not a Disability

Houston Tax Attorney

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Early distributions from IRAs are subject to a 10 percent additional tax.  The 10 percent additional tax does not apply if the distribution is taken when the IRA owner is disabled.  The recent Gillette v. Commissioner, T.C. Memo. 2018-195, case addresses whether medically-induced compulsive gambling qualifies as a disability. The Facts & Procedural History The taxpayer-wife is a […]

Planning for Tax Deductible Entertainment Expenses

Houston Tax Attorney

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Entertainment expenses are deductible but the deduction is limited to 50 percent of the amount spent. There have been a number of disputes between taxpayers and the IRS as to what counts as a limited entertainment expense. The law was recently changed such that entertainment expenses are no longer deductible.  This change to full disallowance […]

U.S. Taxpayer With U.S. Residence Cannot Exclude Foreign-Earned Income

Houston Tax Attorney

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There are a number of tax issues that U.S. citizens and residents who live abroad have to consider.  One of these is whether they qualify to exclude their foreign-earned income in computing U.S. income taxes.  This exclusion has resulted in a number of tax disputes.  The Leuenberger v. Commissioner, T.C. Summary Opinion 2018-52, case addresses the […]

Documenting Tax Losses for Worthless Securities

Houston Tax Attorney

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Tax losses for worthless securities are often challenged by the IRS.  It particularly important to document the loss.  There are several elements taxpayers have to establish to secure the benefit of tax losses for worthless securities.  The recent Giunta v. Commissioner, T.C. Memo. 2018-180, case provides an opportunity to consider these elements. Facts & Procedural History The […]

Court May Explain How to Allocate Tax Basis to Intangible Assets

Houston Tax Attorney

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If the U.S. government allows a taxpayer to call a liability an asset and then acts to make the asset worthless, can the taxpayer take a tax loss for the loss of the so-called asset?  The Citigroup, Inc. v. United States, No. 15-953T (Ct. Cl. 2018) court case addresses this fact pattern.  The case gets to one […]