Tax Controversy Sentinel

The increasingly complex area of tax law in the U.S. can cause a variety of legal setbacks for any business. The more notable the tax controversy, the more roadblocks that can be created between a company and its success. Our Tax Controversy Sentinel blog addresses the latest developments in all aspects of tax controversy matters.

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Recent Blog Posts

  • Falsely Padding Deductions Garners Eighth Spot on IRS “Dirty Dozen” for 2018 As part of its annual “Dirty Dozen” list of tax scams, the Internal Revenue Service warned taxpayers to avoid falsely inflating deductions or expenses on tax returns. Common areas targeted by unscrupulous tax preparers involve overstating deductions such as charitable contributions, padding business expenses, or improperly claiming credits such as the Earned Income Tax Credit or Child Tax Credit. Compiled annually by the IRS, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time of the... More
  • Improper Claims for Business Credits Rank Seventh on IRS “Dirty Dozen” List for 2018 The Internal Revenue Service has warned taxpayers to avoid making improper claims for business credits, a common scam used by unscrupulous tax preparers. Two common credits targeted for abuse include the research credit and the fuel tax credit. While both credits have legitimate uses, there are specific criteria that must be met in order to qualify for them. Compiled annually by the IRS, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time of the year,... More
  • Falsely Inflated Refunds Ranks Sixth on IRS “Dirty Dozen” for 2018 The Internal Revenue Service has warned taxpayers to be alert to unscrupulous return preparers touting inflated tax refunds. According to the IRS, these scam artists frequently prey on older Americans, low-income taxpayers, and others with promises of big refunds. These refund scams remain on the annual “Dirty Dozen” list of most common tax scams, particularly during tax filing season. Compiled annually by the IRS, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time of the... More
  • IRS Releases Draft FATCA Compliance Certification Forms, Indicates July 1 Deadline May Be Extended by 90 Days The Foreign Account Tax Compliance Act (FATCA) requires a foreign financial institution to appoint a “Responsible Officer” who is obligated to submit periodic compliance certifications to the Internal Revenue Service attesting to the institution’s compliance with various FATCA duties.  For most Participating Foreign Financial Institutions (FFIs) and Reporting Model 2 FFIs, the first deadline for their Responsible Officers to submit such compliance certifications is July 1, 2018.  The first certification required to be filed addresses the FFI’s due diligence with... More
  • Changes for Individuals in New Federal Tax Law The Tax Cuts and Jobs Act, enacted in December 2017, is the most significant change to the U.S. Tax Code since 1986 and dramatically alters the tax landscape for individuals. A number of changes take effect this year, while other provisions will not take effect until 2019. Many provisions are temporary, set to expire in 2026, which creates uncertainty for tax planning. New Income Tax Rates and Loss of Itemized Deductions Most fundamentally, the new law significantly lowers income tax rates for... More
  • Internal Revenue Service’s LB&I Division Unveils Five More Compliance Campaigns On March 13, 2018, the Internal Revenue Service’s Large Business and International Division announced that it was adding five more compliance campaigns to its previously-announced list of 24 such campaigns. The compliance campaigns signify LB&I’s move toward “issue-based examinations” premised upon pre-selected issues that present the greatest risk of non-compliance. According to LB&I, the stated goal of this effort is to “improve return selection, identify issues representing a risk of non-compliance, and make the greatest use of limited resources.” In January... More
  • State Crackdown on “Zappers” Continues: Washington State AG Files $5.6 Million Criminal Tax Case Against Restauranteur Calling it the largest sales suppression software case in state history, Washington State Attorney General Bob Ferguson announced the filing of criminal charges last week against the owner of six restaurants for allegedly using illicit point-of-sale software to delete cash transactions and pocket more than $5.6 million in sales tax. The charges include six counts of first-degree theft and three counts of possessing and using sales suppression software, commonly known as a “zapper,” which is illegal in the state of... More
  • Eleventh Circuit Holds Forfeited Deposit on Terminated Sale is Ordinary Income In CRI-Leslie, LLC, the Eleventh Circuit confronted whether a taxpayer is entitled to capital gains treatment for a forfeited deposit on the sale of land.  CRI-Leslie, LLC, Donald W. Wallace, Tax Matters Partner v. Commissioner, 11th Cir., No. 16-17424, February 15, 2018.  It is not a stretch to describe this area as “among the most frustrating in income tax law.”  Sirbo Holdings, Inc. v. Commissioner, 509 F.2d 1220, 1223 (2d Cir. 1975). In 2005, CRI-Leslie paid almost $14 million for a... More
  • Fake Charities Garner Fifth Spot on IRS “Dirty Dozen” for 2018 The Internal Revenue Service today warned taxpayers against scam groups masquerading as charitable organizations, luring people to make donations to groups or causes that don’t actually qualify for a tax deduction. These phony charities, which attempt to attract donations from unsuspecting contributors using a charitable reason and a tax deduction as bait for taxpayers are ranked fifth on the annual IRS “Dirty Dozen” list of tax scams. Perpetrators of illegal scams can face significant penalties and interest and possible criminal... More
  • IRS Ranks Tax Return Preparer Fraud As Number Four on the IRS “Dirty Dozen” for 2018 Continuing its daily “countdown” of the annual “Dirty Dozen” tax schemes, the Internal Revenue Service announced that return preparer fraud is the fourth entry on that esteemed list for 2018. With more than half of the nation’s taxpayers relying on someone else to prepare their tax return, the Internal Revenue Service reminded consumers today to be on the lookout for unscrupulous tax preparers looking to make a fast buck from honest people seeking tax assistance. The IRS recognizes that the... More