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Common Ethical Issues in a Tax Practice

In Ethics by Ryan DeanLeave a Comment

The nature of tax practice presents a number of unique ethical issues.  Tax practice requires compliance with multiple ethical frameworks.  This creates ambiguities and raises complex questions. Courts have even questioned whether certain regulatory frameworks, such as Circular 230, are applicable to certain conduct of attorneys in practice before the IRS.[1]   These ambiguities can leave tax practitioners facing practical questions.  …

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The Sham Trust Doctrine – When will a Court Disregard a Trust for Federal Tax Purposes?

In Economic Substance, Sham Trust, Trust by Jason FreemanLeave a Comment

When will a court disregard a trust for federal tax purposes?  The Tax Court’s recent opinion in Wegbreit v. Commissioner demonstrates the pitfalls when a court finds that a trust should be disregarded for tax purposes.   But first of all: What is a trust? A trust is an entity or relationship created and governed under state (or other) law. …

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Recent FBAR Case Allows Multiple Penalties for Single Failure to File FBAR

In FBAR, International Tax by Jason FreemanLeave a Comment

A recent FBAR case held that non-willful failures to report foreign bank accounts can give rise to a $10,000 penalty per account—per year.  In United States v. Boyd, a federal district court upheld the IRS’s assessment of multiple penalties for non-willful failures to file a FBAR.  A $10,000 penalty per account creates substantial exposure for taxpayers with multiple unreported accounts. …

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International Tax Enforcement: The Joint Chiefs of Global Tax Enforcement

In International Tax by Jason FreemanLeave a Comment

Leaders from the Joint Chiefs of Global Tax Enforcement recently issued a notice, available here, commemorating the one-year anniversary of the formation of the so-called J5 Group.  The Joint Chiefs of Global Tax Enforcement have combined forces across the globe in an effort to target international tax evasion, hidden bank accounts, and money laundering.  The J5 intends to usher in …

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Innocent Spouse Relief: A Primer

In Innocent Spouse Relief by Jason FreemanLeave a Comment

The Internal Revenue Code provides that only “spouses” are eligible to file a joint tax return. I.R.C. § 6013(a).  Spouses who file a joint tax return are jointly and severally liable for the taxes related to a joint tax return.  That means that one spouse can be held liable for the entire amount owed—all of it.  Thus, joint tax returns can present …

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The IRS Office Audit

In Audit by Larry JonesLeave a Comment

Our last Insight article on IRS audits covered correspondence audits.  Here we will discuss the office audit.  When a tax return has been selected for office examination, generally the examination of the return will be conducted at the office of the IRS.  Normally a taxpayer will find an office examination has begun when the taxpayer receives a letter or telephone …

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Tax Preparers and Criminal Exposure: Be Careful Out There!

In Criminal by Jason FreemanLeave a Comment

The recent case of United States v. Berger demonstrates the criminal exposure that accountants face when advising clients about taxes and preparing tax returns.  In that case, Berger, a CPA, was found guilty of aiding and abetting the preparation of false tax returns.  A copy of the Indictment is available here.  The charges, which were brought under IRC section 7206(2), are …

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Advising International Business Ventures: “Tested Income” under GILTI

In International Tax, Tax Reform by Jason FreemanLeave a Comment

Freeman Law frequently advises international business ventures.  International operations often give rise to unique (and sometimes unanticipated) compliance obligations and complex reporting requirements. Recent tax reform rules and regulations have imposed a number of new requirements.  The IRS and Treasury Department have elaborated on these new rules through proposed regulations and other guidance.  This post provides a short introduction to the …