‘tax resolution’ companies

Sunday, Nov 11th, 2012

If you want to work on your tax situation, you should not hire out-of-state ‘tax resolution’ companies.  The link is to an article in Forbes describing why. Minnesota attorneys (and CPAs) are locally licensed and regulated. http://www.forbes.com/sites/janetnovack/2012/03/18/owe-the-irs-taxmasters-bankruptcy-shows-why-not-to-get-help-from-tv-pitchmen/

promoter penalties and collection due process

Thursday, Jul 19th, 2012

Well, in a major shift on one of my promoter penalty cases, IRS National Office, which had issued a formal opinion to the contrary, in the midst of litigation reversed itself and allowed the alleged promoter to challenge the merits of the promoter penalties in CDP litigation, without the prior payment of a percentage of… Read more »

transferee liability and the offer-in-compromise, and a few other things

Tuesday, Jun 5th, 2012

A recurring issue with collection of employment taxes.  Corporation A owes employment taxes but ceases business.  Corporation A has one owner, Mr. B, who has been impoverished through the collapse of the business of Corporation A.  The IRS moves against the assets of Corporation A for payment.  The poverty of  Mr. B is irrelevant to… Read more »

new office location

Thursday, May 3rd, 2012

We have changed our physical office location (as shown on the contact page): U.S. Bank Building 101 E. Fifth Street, Suite 910 St. Paul, MN 55101 The prior phone, fax, and email remain the same.  We are still in downtown St. Paul, because there is no better city to work in.

equitable recoupment in Minnesota

Tuesday, May 1st, 2012

Interesting to note that apparently (after Westlaw searches for the term) Minnesota courts have not issued a tax opinion either accepting or rejecting equitable recoupment, the federal tax principle under which the taxpayer may raise time-barrred refund/credit claims to offset tax assessments based on the same transaction, e.g. Estate of Orenstein v. Commissioner, T.C.Memo. 2000-150 (taxpayer… Read more »

the missed Commissioner’s Order

Saturday, Mar 31st, 2012

It’s interesting how much bleaker the situation is on the Minnesota level, as compared with the federal level, for the taxpayer who fails to receive a notice of tax determination – Commissioner’s Order from Minnesota, Notice of Deficiency from the IRS.  At the federal level, the Notice of Deficiency is sent certified mail as a… Read more »

listen for us on WCCO

Friday, Mar 2nd, 2012

Our latest WCCO radio ad, playing various weekdays in the morning, and during The Real Estate Radio Hour on Saturday mornings 10-11 am and Your Money Sunday mornings 8:30-9:30 am. Eric Johnson Tax Attorney 21312 (4)

negligence penalty is not automatic

Wednesday, Feb 29th, 2012

Sat through another federal audit where the examiner explained that the negligence penalty under I.R.C. §6662 is a “compliance penalty”, applicable to every case except where the taxpayer disproves it.  It is worth noting that the initial burden for showing a basis for the penalty is on the IRS, not on the taxpayer.  I.R.C. §7491(c)…. Read more »

failure-to-deposit penalties

Monday, Jan 16th, 2012

It should be noted that there is a reasonable cause exception to failure-to-deposit penalties for employment tax purposes, although IRS personnel sometimes suggest otherwise.  I.R.C. §6656(a).  It involves a showing that business cash flow prevented timely deposit of employment taxes.  See, Diamond Plating Co. v. United States, 390 F.3d 1035 (7th Cir. 2004); Van Camp… Read more »

Mathematical & Clerical Errors

Wednesday, Nov 16th, 2011

An interesting aspect of federal income tax procedure is the power of the IRS to impose ‘mathematical or clerical error’ assessments without going through the standard deficiency procedures necessary prior to assessment.  Under standard deficiency procedures, prior to an income tax assessment the IRS must go through a series of procedural hurdles, including the issuance… Read more »

Minnesota criminal tax enforcement

Tuesday, Oct 4th, 2011

It’s worth noting: Minnesota is vastly increasing its criminal tax enforcement, especially for chronic non-filers.

Gambling Losses in Wisconsin

Monday, Aug 29th, 2011

For non-professional gamblers, the Wisconsin Department of Revenue asserts that deductions for gambling losses must be added back into federal taxable income to reach Wisconsin taxable income.  (Gambling losses at the federal level are deductible itemized expenses to the extent they offset gambling gains.)  The position is based on Wis.Stat. §71.07(5)(a)7, which requires an addback… Read more »

Minnesota civil tax fraud

Thursday, Aug 25th, 2011

Interesting that Minnesota law, with respect to civil tax fraud, has traditionally put the burden of persuasion on the taxpayer to show a lack of fraud, in complete contrast to the federal rule.  F-D Oil Co., Inc. v. Commissioner, 560 N.W.2d 701 (Minn. 1997).  It is difficult to show in detail all the fraudulent activities… Read more »

underpayment rates drop dramatically

Friday, Aug 19th, 2011

Federal underpayment rates will drop for Q4 of 2011 to 3%.  Not bad.  If you can manage not to incur the failure-to-file or failure-to-pay penalties, say in an amended return situation, your loan from the United States is now really quite reasonable, considering that rates for a typical mortgage rate are still over 4%.  The… Read more »

innocent spouse deadline expanded

Friday, Aug 5th, 2011

Interesting that the IRS has expanded (will expand) the innocent spouse deadline under the catch-all equitable provision of I.R.C. §6015(f), which several courts had ruled was properly subject to the two-year-from-initial-collection time limitation, e.g. Lantz v. Commissioner, 607 F.3d 479 (7th Cir. 2010).  The IRS (Treasury) of course has the power to do this, because… Read more »

national ‘tax help’ firm closes

Thursday, Jul 21st, 2011

http://blogs.sacbee.com/crime/archives/2011/05/tax-lady-roni-d.html Roni Deutch – the ‘tax lady’ – is done.  A taxpayer seeking competent advice on an offer-in-compromise is well advised to seek a ‘regular’ attorney.

avoiding joint income tax liability – another issue

Monday, May 23rd, 2011

On a largely esoteric note, it should be pointed out that I.R.C. §6015 ‘innocent spouse’ status may not be the only avenue for avoiding joint income tax liability.  The threshold issue with joint liability is the existence of a valid joint return.  An area of the case law that has been somewhat dormant since the… Read more »

collateral estoppel and MN adjustments to federal items

Wednesday, Apr 27th, 2011

Minnesota is perceptibly increasing audits of federal income tax items, e.g. passive activity losses from limited partnerships where the activity of the limited partnership is in a state different from the state residence of the taxpayer.  A question that often arises is the effect of the Minnesota adjustments on federal reporting.  Of course, a fully… Read more »

in defense of embezzlers

Tuesday, Aug 17th, 2010

No one likes to defend embezzlers.  But some of the case law on the tax repercussions of embezzlement and restitution is unduly harsh.  In some cases, the courts have held that restitution of embezzled funds is not an ordinary I.R.C. §162 deduction, but at most a miscellaneous itemized deduction, e.g. in O’Hagan v. Commissioner, T.C…. Read more »