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Tax Court Archives

Watch Your Offshore Assets! Tax Court Increases Incentive for Whistleblowers

Be careful who you share your offshore account information with---whistleblowing just got more lucrative.  On August 3, 2016, the US Tax Court issued an opinion in a whistleblower claim case finding that the whistleblowers were entitled to an award based upon a percentage of $74,131,694 in tax restitution, a criminal fine, and civil forfeitures paid to the government. 147 T.C. No. 4. The targeted taxpayer pleaded guilty to conspiring to defraud the IRS and was ordered to pay $20,000,001 in tax restitution, a $22,050,000 criminal fine, and $15,821,000 civil forfeiture.

Tax Court Re-Affirms Subpoena Notification Requirement, To IRS' Dismay

On July 8, 2016, Judge Mark V. Holmes issued an order in US Tax Court case Ernest S. Ryder & Associates, Inc., APLC, et al., v. Commissioner requiring the Internal Revenue Service (IRS) to notify the taxpayer of any and all subpoenas, with their responses and responsive documents, issued by the IRS to third parties. In this case, there were 77 such subpoenas issued and not yet disclosed, due to the absence of any direct requirement to do so within the Tax Court rules.

Tax Court Proposes New Rules Related to IRS Passport Revocation

The United States Tax Court Chief Judge Michael B. Thornton recently announced that the Tax Court has adopted interim amendments and has issued proposed amendments to the Tax Court Rules of Practice and Procedure relating to the Bipartisan Budget Act of 2015, the Fixing America's Surface Transportation Act, and the Protecting Americans from Tax Hikes Act of 2015. Among the proposed amendments to the Tax Court Rules are rules relating to the new ability of the IRS to issue a certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport in the case of "seriously delinquent tax debts." I.R.C. sec. 7345(a).

VIDEO: What happens when parties cannot reach a settlement?

In many of the cases we handle, our tax attorneys are able to reach a settlement through negotiations with the other side. However, this isn't always possible, especially if the parties simply do not agree on an issue, or the issue involves an area of law that is unresolved.

Tax Court rejects proposed addition to tax for fraudulent failure to file

In Kernan v. Commissioner, T.C. Memo. 2014-228, the Tax Court sustained the IRS's proposed deficiencies and additions to for tax years 2001 through 2006 due to the taxpayer's failure to file income tax returns. However, the Court rejected the IRS's proposed penalties for fraudulent failure to file these same returns.

Court finds settlement proceeds from mortgage fraud lawsuit were not includible in income

In a Summary Opinion, the Tax Court found that a taxpayer did not have $10,000 in unreported income with regard to settlement proceeds resulting from a mortgage fraud lawsuit. Kadir v. Commissioner, T.C. Summ. Op. 2014-43.

Taxpayers can waive the attorney-client privilege by raising good faith and state-of-mind defenses during litigation

The Tax Court recently issued an opinion in AD Investment v. Commissioner, 142 T.C. No. 13, in which the Court granted the IRS's motion to compel the production of documents. The controversy arose in the context of two consolidated Tax Court proceedings involving partnership-level actions related to a possible Son-of-BOSS tax shelter from tax year 2000.

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