Federal
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May 15, 2024
House Judiciary Chair Seeks Docs On IRS Backdating Probe
The House Judiciary Committee's Republican chairman asked an IRS watchdog to reveal findings from investigations into allegations of IRS employee misconduct, including in a high-profile $38 million conservation easement deduction case in which the agency admitted to backdating evidence.
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May 15, 2024
Senate Finance Panel Schedules Hearing On Tax Accounts
The Senate Finance Committee will meet next week to discuss investment in tax-advantaged accounts and its impact on children, the committee said Wednesday.
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May 15, 2024
Pardoned NJ Atty Suspended Over Tax, Fraud Convictions
A former Gilmore & Monahan PA partner — who was convicted of failing to pay payroll taxes and lying on a loan application, and was pardoned by then-President Donald Trump — has received a two-year suspension from practicing law in New Jersey, though it will be largely offset by a previous suspension he served, according to a Wednesday order.
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May 15, 2024
IRS Not On Hook For Ohio Woman's Legal Fees, Court Says
The Internal Revenue Service is not liable to pay nearly $87,000 in legal fees of an Ohio woman because the agency's position was "substantially justified" throughout the woman's pursuit of a refund, the U.S. Tax Court ruled Wednesday.
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May 15, 2024
Applicable Federal Interest Rates To Rise In June
Applicable federal rates for income tax purposes will increase in June, the Internal Revenue Service said Wednesday.
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May 15, 2024
IRS Issues Static Mortality Tables For 2025 Defined Plans
The Internal Revenue Service on Wednesday released the updated static mortality tables used to calculate the funding target and other items for defined benefit pension plans during the 2025 calendar year.
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May 15, 2024
Pension Plan Segment Rates Increase In May
Segment rates for calculating pension plan funding rose in May, the Internal Revenue Service said Wednesday.
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May 15, 2024
IRS Working To Prevent Child Support Collection Disruption
The Internal Revenue Service is working to prevent disruption of federal tax refund offsets — including garnishment for owed child support — affecting Native American tribal governments and other taxpayers, the agency said.
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May 14, 2024
Northwestern Settles Tax Law Prof's Age Bias Suit
Northwestern University agreed to settle a law school professor's age bias suit filed in Illinois federal court claiming he was given smaller raises year-over-year in comparison with his younger colleagues after he cast aside the institution's push for him to retire early.
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May 14, 2024
Law Prof Comes To Treasury's Aid In 3M Transfer Pricing Fight
The U.S. Department of the Treasury did not act arbitrarily when it wrote transfer pricing regulations that allowed the government to disregard foreign legal restrictions on royalty payments when allocating income to 3M from an affiliate, a law professor told the Eighth Circuit on Tuesday.
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May 14, 2024
Yellen, Werfel Urged To Make E-Filing Program Permanent
The Internal Revenue Service's pilot program for free electronic tax return filing should be made permanent and grown, a coalition of groups that endorse the project told IRS Commissioner Daniel Werfel and Treasury Secretary Janet Yellen in a letter Tuesday.
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May 14, 2024
Billionaire's Pilot Cops To Tax Count, Avoids Insider Trial
A pilot from Virginia accused of profiting from stock tips fed to him by British billionaire Joe Lewis on Tuesday copped to dodging taxes on $500,000 of income from Lewis' company, in a plea deal that avoids an insider trading trial.
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May 14, 2024
Microsemi Calls IRS' Penalty Approval 'Woefully Inadequate'
An Internal Revenue Service supervisor's sign-off on a transfer pricing penalty for Microsemi was "woefully inadequate" to meet statutory requirements for penalty approval, the semiconductor manufacturer told the U.S. Tax Court.
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May 14, 2024
Ex-Husch Blackwell, Dykema Atty Pleads Guilty To Tax Evasion
A former Husch Blackwell LLP partner who helped launch Dykema Gossett PLLC's Milwaukee office two years ago has agreed to plead guilty in Wisconsin federal court to willfully evading paying income tax, which could land him in prison for over a year and will force him to pay almost $4 million in restitution to the IRS.
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May 14, 2024
Big Refund Filings Could Be Improper, IRS Says
Inaccurate advice from social media, as well as a series of tax scams, has resulted in an increase in questionable, inflated refund claims, the Internal Revenue Service said Tuesday.
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May 14, 2024
ER Doc Can't Deduct His Film Co.'s Costs, 5th Circ. Told
An emergency room doctor with a passion for music was correctly denied business deductions for his unprofitable production company, the IRS told the Ninth Circuit in asking it to uphold a U.S. Tax Court ruling that found the doctor owed more than $59,000 in taxes and penalties.
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May 14, 2024
IRS Floats Property Rule Changes On Interest Capitalization
The Internal Revenue Service floated changes Tuesday to the interest capitalization requirements for improvements constituting property production, including removing the so-called associated property rule that was invalidated by the Federal Circuit.
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May 14, 2024
Ex-Whiteford Taylor Business Co-Chair Joins Baker Donelson
Baker Donelson Bearman Caldwell & Berkowitz PC has welcomed a new shareholder who spent more than a decade with the Internal Revenue Service and previously co-chaired Whiteford Taylor & Preston LLP's business department, the firm announced on Monday.
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May 14, 2024
IRS Finalizes Slash Of Preparer ID Fee
The Internal Revenue Service will reduce the cost to apply for or renew a preparer tax identification number by nearly 50%, the agency said in a final rule released Tuesday.
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May 13, 2024
NJ Fraudster Gets More Prison Time, Owes $6M For Tax Evasion
A New Jersey man who was convicted of dodging taxes on more than $16 million he stole from securities fraud victims was handed a six-year prison sentence — most of which will be served simultaneously with his fraud sentence — and ordered to pay over $6 million in restitution during a Garden State federal court hearing Monday in which he denied the crimes.
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May 13, 2024
Corp. Transparency Act An Overbroad Dragnet, 11th Circ. Told
Congress exceeded its authority in passing the Corporate Transparency Act, which prompted the U.S. Treasury Department to solicit personal information for law enforcement purposes from those that registered and owned state-registered entities, a small-business group told the Eleventh Circuit on Monday.
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May 13, 2024
US Tells DC Circ. Ayahuasca Church's Settlement Inapt
Federal regulators are telling the D.C. Circuit to ignore a recent settlement that will allow a Phoenix-based church to continue using ayahuasca in its ceremonies, saying it has nothing to do with the Iowa-based ayahuasca church challenging the IRS's refusal to give it tax-exempt status.
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May 13, 2024
House GOP Bills Target Foreign Funding To Tax-Exempt Orgs
The House Ways and Means Committee will vote Wednesday on a package of bills that would increase scrutiny of foreign donations to tax-exempt organizations, including legislation that would require those organizations to publicly report the donations, the Joint Committee on Taxation announced Monday.
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May 13, 2024
Biz Coalition Pushes Senate To Renew R&D Tax Break
The U.S. Senate should act quickly to renew a provision allowing research and development expenses to be immediately deductible, a coalition of businesses told the chamber's leaders in a letter Monday.
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May 13, 2024
2nd Circ. Won't Revive UBS Suit Over Disclosed Account Info
The Second Circuit declined Monday to revive a couple's suit accusing UBS of fraudulently flagging an account to the Internal Revenue Service, finding that any alleged harm resulting from an audit would have been caused by the agency itself.
Expert Analysis
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How Law Firms Can Use Account-Based Marketing Strategies
Amid several evolving legal industry trends, account-based marketing can help law firms uncover additional revenue-generating opportunities with existing clients, with key considerations ranging from data analytics to relationship building, say Jennifer Ramsey at stage LLC and consultant Gina Sponzilli.
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While Risks Exist, AI Could Transform IRS Enforcement
The Internal Revenue Service's recently announced use of artificial intelligence could revolutionize the agency's enforcement efforts, and transparency about its use and a forum for challenging AI findings could help mitigate fears that the technology will increase bias, say attorneys at Lewis Brisbois.
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Strategic Succession Planning At Law Firms Is Crucial
Senior partners' reluctance to retire, the rise of the nonequity partner tier and generational differences in expectations are all contributing to an increasing number of departures from BigLaw, making it imperative for firms to encourage retirement among senior ranks and provide clearer leadership pathways to junior attorneys, says Laura Leopard at Leopard Solutions.
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Maximizing Law Firm Profitability In Uncertain Times
As threats of an economic downturn loom, firms can boost profits by embracing the power of bottom-line management and creating an ecosystem where strategic financial oversight and robust timekeeping practices meet evolved client relations, says Shireen Hilal at Maior Strategic Consulting.
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Enforcement Of International Tax Reporting Is Heating Up
Since the U.S. Supreme Court’s February decision in Bittner v. U.S. changed how penalties for failure to report offshore accounts are calculated, recent developments suggest the government is preparing to step up enforcement and vigorously pursue the collection of resulting penalties, say Daniel Silva and Agustin Ceballos at Buchalter.
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How Gov't Agencies Will Fare In The Event Of A Shutdown
With a federal shutdown potentially set to begin at the end of this month, it may be useful to consider the approximate timelines that agencies such as the Federal Trade Commission and IRS have announced for curtailing operations, and potential strategies for mitigating challenges that may arise while agency functions are limited, say attorneys at Cleary.
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IRS Notice Clarifies R&E Amortization, But Questions Remain
The IRS and Treasury Department’s recent notice clarifying the treatment of specified research and experimental expenditures under Section 174 provides taxpayers and practitioners with substantive guidance, but it misses the mark in delineating which expenditures are amortizable, say attorneys at Eversheds Sutherland.
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Preparing Your Legal Department For Pillar 2 Compliance
Multinational entities should familiarize themselves with Pillar Two of the Organization for Economic Cooperation and Development’s BEPs 2.0 project and prepare their internal legal tracking systems for related reporting requirements that may go into effect as early as January, says Daniel Robyn at Ernst & Young.
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What Large Language Models Mean For Document Review
Courts often subject parties using technology assisted review to greater scrutiny than parties conducting linear, manual document review, so parties using large language models for document review should expect even more attention, along with a corresponding need for quality control and validation, say attorneys at Sidley.
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Participating In Living History Makes Me A Better Lawyer
My role as a baron in a living history group, and my work as volunteer corporate counsel for a book series fan association, has provided me several opportunities to practice in unexpected areas of law — opening doors to experiences that have nurtured invaluable personal and professional skills, says Matthew Parker at the Nebraska Department of Health and Human Services.
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Private Equity Owners Can Remedy Law Firms' Agency Issues
Nonlawyer, private-equity ownership of law firms can benefit shareholders and others vulnerable to governance issues such as disparate interests, and can in turn help resolve agency problems, says Michael Di Gennaro at The Law Practice Exchange.
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Kentucky Tax Talk: Taking Up The Dormant Commerce Clause
Attorneys at Frost Brown examine whether the U.S. Supreme Court is likely to review Foresight Coal Sales v. Kent Chandler to consider whether a Kentucky utility rate law discriminates against interstate commerce, and how the decision may affect dormant commerce clause jurisprudence.
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Prevailing Wage Rules Complicate Inflation Act Tax Incentives
Nicole Elliott and Timothy Taylor at Holland & Knight discuss the intersection between tax and labor newly created by the Inflation Reduction Act, and focus on aspects of recent U.S. Department of Labor and U.S. Department of the Treasury rules that may catch tax-incentive seekers off guard.