criminal investigation Archives - TAX CONTROVERSY 360

IRS Roundup for November 25 – December 13, 2024

by Kevin Spencer, Evan Walters and Samuel F. Hamer | Dec 17, 2024 | IRS Guidance, Tax Reform

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for November 25, 2024 – December 13, 2024.

November 25, 2024: The IRS released Treasury Decision 10011, which modifies the regulations governing the sale of a taxpayer’s property that the IRS seizes by levy. The modified regulations allow the IRS to maximize sale proceeds for the benefit of the taxpayer and the public fisc. Effective November 5, 2024, these regulations affect all sales of property the IRS seizes by levy.

November 26, 2024: The IRS issued Notice 2024-85, announcing revisions to transition relief for third-party settlement organizations under Internal Revenue Code (Code) § 6050W, also known as “payment apps” and “online marketplaces.” Under this guidance, payors will be required to report transactions when the amount of total payments is more than $5,000 in 2024, more than $2,500 in 2025, and more than $600 in calendar year 2026 and after.

November 26, 2024: The IRS issued Announcement 2024-40 in which it confirmed that amounts paid or incurred by a taxpayer for the construction, expansion, or modernization of advanced manufacturing facilities pursuant to an agreement entered into with the US Department of Commerce under 15 U.S.C. § 4652(a)(6)(C) (the CHIPS Act of 2022) will not fail, solely by reason of such agreement, to constitute a “qualified investment” for purposes of determining the amount of any advanced manufacturing investment credit under Code § 48D.

December 2, 2024: The IRS released Internal Revenue Bulletin 2024-49, which includes the following:

Revenue Ruling 2024-25, which provides the interest rates for overpayments and underpayments of tax for the calendar quarter beginning January 1, 2025.
Revenue Ruling 2024-26, which provides the December 2024 applicable federal rates for purposes of Code § 1274(d) and relates to the determination of issue price in the case of certain instruments issued for property.
Notice 2024-81, which provides an update for weighted average interest rates, yield curves, and segment rates.
Notice 2024-83, which provides an update to the fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Trust Fund. This update is effective for plan years ending on or after October 1, 2024, and before October 1, 2025.

December 2, 2024: The IRS issued proposed regulations under Code § 959 regarding companies’ previously taxed earnings and profits (PTEP). These proposed regulations are the first in a series of guidance on PTEP rules. This first tranche of guidance includes a framework on which to build rules on mergers and acquisitions, along with provisions addressing basis adjustments under Code § 961 and foreign-currency gains and losses.

December 2, 2024: The IRS announced that December 2 marked the beginning of the 9th annual National Tax Security Awareness Week. The IRS warned of holiday scams and [...]

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Weekly IRS Roundup March 25 – March 29, 2024

by Kevin Spencer, Evan Walters and Jeremy Kass | Apr 2, 2024 | IRS Guidance, Tax Reform, Tax Refunds

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 25, 2024 – March 29, 2024.

March 25, 2024: The IRS released Internal Revenue Bulletin 2024-13, which includes the following:

Notice 2024-28, which invites the public to submit items they want included in the 2024-2025 Priority Guidance Plan. The Priority Guidance Plan identifies and prioritizes the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices and other published administrative guidance.
Revenue Procedure 2024-11, which provides general rules and specifications from the IRS for paper and computer-generated substitutes for Form 941, Schedule B (Form 941), Schedule D (Form 941), Schedule R (Form 941) and Form 8974.
Proposed regulations, which would modify existing regulations to allow certain unincorporated organizations that are organized exclusively to produce electricity from certain property to be excluded from the application of partnership tax rules.

March 25, 2024: The IRS announced that almost 940,000 people across the nation have unclaimed refunds for tax year 2020 and face a May 17 deadline to submit their tax returns.

March 25, 2024: The IRS released the transcript of Commissioner Danny Wefel’s one-year anniversary speech.

March 25, 2024: The IRS reminded taxpayers they can access a free recording of the 2023 Form 1099-K webinar, which provides important info for tax professionals and anyone who receives a Form 1099-K, including people who use popular payment apps and online marketplaces.

March 25, 2024: The IRS announced that individuals and businesses in the Wrangell Cooperative Association of Alaska Tribal Nation that were affected by severe storms, landslides and mudslides that began on November 20, 2023, now have until July 15, 2024, to file various federal individual and business tax returns and make tax payments.

March 25, 2024: The IRS released Notice 2024-32, which provides guidance on the eligibility of loan borrowers through State Supplemental Loan programs and the loan size limitation for State Supplemental Loans. The notice also provides guidance on whether an issue of state or local bonds, the proceeds of which are used to finance or refinance qualified student loans (as defined in § 1.150-1(b)) or to finance qualified mortgage loans (as defined in § 1.150-1(b)), is a refunding issue.

March 26, 2024: The IRS released Announcement 2024-16, which provides general information on advance pricing agreements and the Advance Pricing and Mutual Agreement Program.

March 26, 2024: The IRS reminded taxpayers filing 2023 tax returns that they must check a box indicating whether they received digital assets as a reward, award, or payment for property or services or disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer.

March 27, 2024: The IRS announced that the previous February 15, 2024, [...]

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Don’t File Fraudulent Returns Because Amending Them Will Not Help

by Kevin Hall, Kevin Spencer and McDermott Will & Emery | Jun 22, 2018 | Court Procedure Matters, IRS Guidance, Trial Courts, Uncategorized

The US Tax Court (Tax Court), in a short opinion, provided a reminder to taxpayers that penalties for filing fraudulent returns cannot be avoided by subsequently filing amended returns. In Gaskin v. Commissioner, TC Memo 2018-89, the taxpayer admitted his original returns were fraudulent. While under criminal investigation, he attempted to cure the fraudulent filings by filing amended returns, reporting more than $100,000 of additional tax. Ultimately, the tax due exceeded the amount reported on the amended returns.

Despite admitting his original fraud, the taxpayer argued that the fraud penalty did not apply because the tax due only modestly exceeded the tax reported on his amended returns. The Tax Court disagreed. Relying on the regulations and Supreme Court precedent, the court held that the amount of the underpayment and the fraudulent intent are both determined by reference to original—not amended—returns. It therefore upheld imposition of the fraud penalty.

Practice Point: Don’t file fraudulent returns! All joking aside, this case reminds us that although filing an amended return can cure some infirmities on your return, you have to be very careful in choosing whether to amend a return. As long as you did your best to accurately calculate your tax due on your original return, you are not required to amend that return if you later find out you were wrong. This is true even if the statute of limitations is still open. Indeed, there is no requirement to amend a return. However, there may be reasons to file an amended return; for example, if you know that you will need to base a future return’s position on a previous return’s position (e.g., the amount of earnings and profits stated on the return). Taxpayers need to be mindful, however, that if you amend your return, it must be accurate to the best of your knowledge when you sign it as to all items and any other errors discovered after the original return was filed must also be corrected. Accordingly, you cannot amend only the favorable positions discovered after you filed your original return.