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A 360-Degree View: March and April 2018

by | Apr 5, 2018 | , ,

Wrapping Up March – and Looking Forward to April

Top March Posts You May Have Missed

White House Intends to Nominate Michael J. Desmond to High-Level Roles in the IRS and the Department of Treasury

The IRS May Be Coming for Your Bitcoins

Tax Court Judicial Conference This Week in Chicago

Upcoming Tax Controversy Activities in April

Our lawyers will present on key tax topics during the month of April. We hope to see you soon.

April 24, 2018: Todd Welty, Kristen Hazel, Elizabeth Erickson, John Lutz and Andrew Roberson will present “Taking Reasonable Positions and Retroactive Regulations” at McDermott’s Inaugural Tax Symposium in our Chicago office. The panel will address Gottesman, the ability of IRS to issue retroactive regulations, IRS authority issues, and impacts on return positions.

Led by our senior practitioners, our 2018 Symposium is a must-attend event for senior tax and employee benefits leaders seeking to optimize the opportunities and navigate the risks brought about by tax reform legislation.

April 30, 2018: Thomas Jones will present “Captive Insurance Tax Reform Update” at the Captive Insurance Council of the District of Columbia in Washington, DC. Captive Insurance has undergone a number of changes since the tax reform movement and our partner Tom Jones will cover the new regulations that your organization should be aware of.



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IRS Funding Woes Realized? Audit Rate at 15-Year Low!

by and | Mar 30, 2018 | , , , , ,

A shrinking Internal Revenue Budget (IRS) budget has meant that fewer agents are available to make sure that the tax laws are being enforced. We have reported previously about how Congress has decreased the IRS’s budget.  In 2017, the audit rate fell to its lowest levels in 15 years because of a shrinking IRS budget and workforce. Indeed, your chance of being audited fell to 0.6% in 2017, the lowest rate since 2002. Similarly, tax collection levies fell 32% from the prior year, and the IRS filed 5% fewer liens year-over-year. Detailed information from the IRS can be found here.

Practice Point. The decreased funding of the IRS in the wake of bipartisan disagreements seems to have quelled in recent weeks. We have seen movement to get the IRS more funding in the wake of tax reform but it remains to be seen whether some of those funds will be used to increase the enforcement functions of the IRS. We anticipate, however, an increase in enforcement activity as a result of some of the positions taken by taxpayers in anticipation of tax reform and the myriad of interpretive questions that are expected to result from the new tax laws.



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New Proposed Regulations Limit Use of Non-Government Attorneys

by | Mar 29, 2018 | , ,

On March 28, 2018, the Treasury Department and Internal Revenue Service (IRS) published Proposed Regulation § 301.7601-1(b)(3)(i) and (ii) which permits the IRS to hire outside specialists to assist in determining the correctness of a taxpayer’s tax liability. The Proposed Regulation also contains an exception specifically prohibiting the IRS from hiring outside attorneys to review summoned information or question witnesses providing testimony under oath.

The participation of outside attorneys became controversial during the audit of a large technology company when the IRS hired an outside law firm to augment its own resources for the transfer pricing audit of the company. On October 16, 2017, in response to the requirements of Executive Order 13789, requiring the Secretary of the Treasury to review all regulations issued after January 1, 2016, the Treasury Department and the IRS announced that they were considering proposing an amendment to Treas. Reg. § 301.7602-1(b)(3) in order to narrow the scope with respect to non-government attorneys. See our prior coverage here. (more…)



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IRS OVDP Ending | Time Is Now for Coming into US Tax Compliance – Especially for Those with Willfulness Issues

by , and | Mar 16, 2018 | , , , ,

On March 13, 2018, the Internal Revenue Service (IRS) announced that it will begin ramping down the current Offshore Voluntary Disclosure Program (OVDP) and urged taxpayers with undisclosed foreign assets to apply for the program prior to its close on September 28, 2018. We have previously reported on developments in the OVDP.

Access the full article. 



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Law360: US District Court To French Tax Authorities: Pas De Probleme

by and | Mar 15, 2018 | , , ,

Robin Greenhouse and Kevin Spencer recently authored, “US District Court To French Tax Authorities: Pas De Probleme” for Law360. The article discusses a case involving IRS summons and taxpayers’ rights in context of the US-France Treaty.

Read the full coverage on Law360.



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Are LB&I’s Campaigns Stuck in the Trenches?

by | Mar 14, 2018 | , , ,

In January 2017, the Internal Revenue Service (IRS) Large Business & International (LB&I) Division released its announcement related to the identification and selection of its campaigns. The primary purpose of the campaigns was to end the resource intensive continuous audit program (where the LB&I audits a large taxpayer year after year for decades) and a move to an issue focused coordinated approach. LB&I originally identified 13 campaign issues and in November 2017, identified 11 additional campaigns and on March 13, 2018, identified 5 additional campaigns. We have extensively discussed LB&I’s campaign examination process including posts on Understanding LB&I “Campaigns”, Run for Cover – IRS Unveils Initial “Campaigns” for Audit, IRS Continues to Barrage Taxpayers with New Campaigns.

At the March 9 meeting of the Federal Bar Association Section on Taxation, an LB&I executive indicated that the rollout of the campaigns may have hit a snag. John Hinding, Director of Cross Border Activities at LB&I, reported that “the campaign work is still a minority of our work,” and its implementation has been slow going. According to Hinding, “A lot of the issue spotting that we’d like to do is driven by data analysis, and changes to systems to allow that is a lengthy process to get in place.” (more…)



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Taxpayer Bill of Rights | Another Tool for Taxpayers?

by | Mar 13, 2018 | , ,

In 2015, after repeated efforts by Nina E. Olson, the National Taxpayer Advocate, Congress enacted the Taxpayer Bill of Rights (TBOR) in Internal Revenue Code (Code) Section 7803(a)(3). We have previously written about TBOR here, here and here.

Since TBOR was enacted, the IRS has issued information on its website regarding the 10 rights contained in Code Section 7803(a)(3). The IRS provides a summary of these rights. Additionally, the IRS has provided specific information on these rights. To summarize, the 10 rights are:

  1. The right to be informed.
  2. The right to quality services.
  3. The right to pay no more than the correct amount of tax.
  4. The right to challenge the position of the Internal Revenue Service and be heard.
  5. The right to appeal a decision of the Internal Revenue Service in an independent forum.
  6. The right to finality.
  7. The right to privacy.
  8. The right to confidentiality.
  9. The right to retain representation.
  10. The right to a fair and just tax system.

(more…)



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More Changes to IRS Appeals’ Practices?

by and | Mar 12, 2018 | , ,

We have previously commented on changes at the Internal Revenue Service (IRS) Appeals Division, including: (1) the allowance of Appeals to invite representatives from the IRS Examination Division (Exam) and IRS Office of Chief Counsel to the Appeals conference, (2) the limitations on in-person conferences, and (3) the use of “virtual” conferences.

IRS Appeals Chief Donna Hansberry discussed these changes at a recent tax law conference held by the Federal Bar Association. According to reports, Ms. Hansberry wants feedback from practitioners on the compliance attendance and virtual conferences. (more…)



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Statutes of Limitation and International Taxes

by and | Mar 8, 2018 | , , , ,

In late 2017, we provided a brief overview of statutes of limitation in the international tax context. At that time, we noted a forthcoming article on the subject.  We are pleased to report that our expanded article on the subject has been published in the January-February 2018 edition of the International Tax Journal.  The full article can be viewed here.



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A 360-Degree View: February and March 2018

by | Mar 6, 2018 | , ,

Wrapping Up February – and Looking Forward to March

Top February Tax Controversy 360 Blog Posts

Types of Tax Court Opinions and Their Precedential Effect

The Slow Death of the Section 385 Regulations

Court Rules That a Family Office Is a Business!

 Upcoming Tax Controversy Activities in March

Our lawyers appear are making the following Tax Controversy speeches in March:

March 7, 2018: Andrew Roberson will be presenting “Nuts & Bolts Collections Workshop: A Guide to Assisting Pro Bono Clients with Collection Matters” at the ABA Section of Taxation Webinar.

March 9, 2018: Jay Singer will be presenting “Section 355 Developments” at the at the Federal Bar Association’s 2018 Tax Law Conference in Washington DC.

March 15, 2018: Mary Kay Martire will be speaking at Tax in the City® in McDermott’s Chicago office about the upcoming oral argument before the US Supreme Court in the case challenging the Quill physical presence requirement for sales tax nexus.

March 27, 2018: Andrew Roberson will be presenting “Discovery & Stipulations Process” at the US Tax Court Judicial Conference at the Northwestern University Pritzker School of Law in Chicago, IL.



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