Tax Controversy CPA

J. Frank Best a Tax Controversy CPA with locations in North Myrtle Beach & Myrtle Beach, SC and Wilmington & Raleigh, NC is rated in the Top 5 Tax Controversy CPA Profiles/Linkedin and as a United States Tax Court Litigator licensed in all States works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

Telephone 800.230.7090   Email: bestcpa@bestirscpa.com  Web: bestirscpa.com

Tax Return Preparer Penalties

A recent District Court decision was reported dealing with Tax Return Preparer Penalties.  J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in North Myrtle Beach and Myrtle Beach, SC & Raleigh and Wilmington, NC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for clients. J. Frank Best is rated in the Top 5 Tax Controversy CPA Profiles/Linkedin.

Tax Return Preparer Penalties

In Taylor v. Comm’r, 2018 PTC 236 (9th Cir. 2018), the Ninth Circuit affirmed a district court’s dismissal for lack of jurisdiction of an action by a tax return preparer seeking an abatement of Tax Return Preparer Penalties after rejecting the taxpayer’s argument that an exception in Code Sec. 6694(c) relieved him of his obligation to pay the penalties in full before bringing a refund suit in the district court. The court noted that, while Code Sec. 6694(c) confers district court jurisdiction when a tax return preparer has paid at least 15 percent of a penalty if the refund action is begun within 30 days after the earlier of the IRS’s denial of the refund claim or the expiration of six months after the day on which the refund claim is filed, the taxpayer did not file within those time limits and thus was not eligible to bring suit in the district court for Tax Return Preparer Penalties.

Settlement Proceeds Taxable: Tax Controversy CPA/U. S. Tax Court Litigator

A recent Tax Court decision was reported dealing with Settlement Proceeds.  J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for clients.

Discrimination and Hostile Work Environment Settlement Is Taxable: In Zinger v. Comm’r, T.C. Summary 2018-33, the Tax Court held that the $20,000 from Settlement Proceeds received by the taxpayer was not excludable from income under Code Sec. 104(a)(2). The court concluded that the settlement payment was for the resolution and withdrawal of the taxpayer’s discrimination and hostile work environment claims and not on account of personal physical injuries or physical sickness.

IRS Disallows Dependents. Can We Assist You? Raleigh, Wilmington-N. Myrtle Beach, Myrtle Beach

A recent Tax Court decision was reported dealing with Dependents.  J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

Parents Who Lost Custody of Children Could Not Claim Them as Dependents or Take Child Tax Credit or EITC

The Tax Court held that the biological parents of two dependent children who were adopted by, resided with and received primary financial support from their maternal aunt during the entire year at issue were not entitled to claim the children as dependents and, as a result, could not take the child tax credit or the earned income credit. The Tax Court reasoned that, although the children visited with their parents when not in school, the children did not share a principal place of abode with their parents, making the parents ineligible to claim the children as dependents or take the credits. Jusino v. Comm’r, T.C. Memo 2018-112.

United States Tax Court Decision of the Week-Underpayment Penalties

A recent Tax Court decision was reported dealing with Underpayment Penalties and additional tax.  J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

Couple That Relied Entirely on Tax Prep Software Can’t Avoid Underpayment Penalties: In Ayissi-Etoh v. Comm’r, T.C. Memo. 2018-107, the Tax Court held that a couple was liable for additional taxes for (1) underreporting certain income and not substantiating certain deductions, and (2) underreporting self-employment income from the International Monetary Fund that was subject to self-employment tax. In addition, the court held that the couple was liable for penalties for substantially understating their tax liabilities because the couple did not seek advice from a qualified tax professional but relied entirely on tax preparation software and their tax deficiency amounts exceeded both $5,000 and 10 percent of the amounts required to be shown on their returns.

The issues for decision are whether petitioners: (1) underreported a taxable refund of State income tax; (2) are entitled to deductions claimed on Schedules C, Profit or Loss From Business; (3) are entitled to deductions claimed on Schedules A, Itemized Deductions, for charitable contributions and unreimbursed employee expenses; (4) are liable for self-employment tax on wages received from an international organization; and (5) are liable for accuracy-related penalties. We resolve all issues in respondent’s favor.

Restitution Payment- J. Frank Best, Tax Controversy CPA/U.S. Tax Court Litigator

Restitution Payments

A recent Tax Court decision was reported dealing with Restitution Payments as Part of a Criminal Sentence.  J.  Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The Tax Court held that a taxpayer was not entitled to a miscellaneous itemized deduction for a $400,000 restitution payment made in 2014. The court concluded that (1) the taxpayer did not show that the restitution payment promoted or protected his trade or business of being an employee; (2) the taxpayer did not present any evidence that the primary purpose or motive for the payment was other than that he was required to make the payment as part of a criminal sentence; and (3) the taxpayer did not enter into the restitution transaction with the intention of making a profit. Washburn v. Comm’r, T.C. Memo. 2018-110.

Conclusion

The Tax Court held that Washburn could not deduct the restitution payments as a miscellaneous itemized deduction in 2014. The court began by noting that the restitution payments would be deductible as a miscellaneous itemized deduction if they constituted expenses attributable to the performance of services as an employee under Code Sec. 162(a), losses related to the performance of services as an employee under Code Sec. 165(c)(1), or losses incurred in a transaction entered into for profit under Code Sec. 165(c)(2).

“Serious IRS Problem Resolution”/J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator

Serious IRS Problem Resolutions

J. Frank Best is rated in the Top 5 Tax Controversy CPA Profiles/Linkedin and is a United States Tax Court Litigator licensed in all States and works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

Telephone 800.230.7090   Email: bestcpa@bestirscpa.com  Web: bestirscpa.com

Business Expenses-J. Frank Best, Tax Controversy CPA/U.S. Tax Court Litigator

A recent Tax Court decision was reported dealing with Business Expenses.  J.  Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients. 

Couple Can’t Deduct Entire Grocery Bill for Household That Includes Foster Individuals: In Kho v. Comm’r, T.C. Summary 2018-32, the Tax Court denied a couple a deduction for total grocery expenses as business expense where they provided foster care for two men with developmental disabilities, one of which required a gluten-free diet. The court noted that any excess cost to the couple in providing gluten-free meals to their client had already been accounted for in the amount that the IRS allowed as a deductible expense for groceries and that the couple could not deduct their entire grocery bill as  business expenses because such costs were personal expenses.

The Tax Court also concluded that petitioners are liable for the penalty imposed under section 6662(a) with respect to the portions of the underpayments attributable to the adjustments that were sustained in this case.

IRS FRIVOLOUS ARGUMENT PENALTY-RALEIGH & WILMINGTON, NC NORTH MYRTLE BEACH & MYRTLE BEACH, SC

A recent Tax Court decision was reported dealing with Frivolous Arguments’ Penalty.  J.  Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully Informed and prepared for our clients.

J. Frank Best, Tax Controversy CPA is rated in the top 5 Tax Controversy CPA/Profiles Linkedin https://www.linkedin.com/title/tax-controversy-cpa

EMAIL: bestcpa@bestirscpa.com

PHONE: 1-800-230-7090

IRS Frivolous Arguments’ Penalty/J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator

A recent Tax Court decision was reported dealing with Frivolous Arguments’ Penalty.  J.  Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients. 

IRS Supervisor Approval Not Required for Tax Court to Assess Frivolous Arguments’ Penalty

The Tax Court held that its authority to impose a frivolous argument penalty under Code Sec. 6673 for making a frivolous argument before the Tax Court is not subject to the IRS supervisor approval requirement in Code Sec. 6751(b)(1). The Tax Court found that (1) Congress’s intent in enacting the supervisor approval requirement was to prevent IRS agents from threatening unjustified penalties to encourage taxpayers to settle, while Code Sec. 6673 is designed to deter bad behavior in the Tax Court and conserve judicial resources, and (2) Code Sec. 6751(b)(1) was clearly not intended as a mechanism to restrain the Tax Court. Williams v. Comm’r, 151 T.C. No. 1 (2018).

The Tax Court concluded that Code Sec. 6751(b)(1) was not intended as a broad restraint mechanism on the federal judiciary. In the court’s view, Congress did not intend for the statute to cover the imposition of penalties that could be imposed by courts because of misbehavior by a litigant during the course of a judicial proceeding.