The United States Tax Court is a federal trial court established by Congress under Article I of the U.S. Constitution, section 8. The Tax Court specializes in adjudicating disputes over federal income tax, generally prior to the time at which formal tax assessments are made by the Internal Revenue Service. The U.S. Tax Court is not an agency of, and is independent of, the executive branch. The U.S. Tax Court is the only forum in which taxpayers may file a case without having first paid the disputed tax in full. Tax Court judges are appointed for a term of 15 years, subject to presidential removal for actions related to neglect, inefficiency, or malfeasance.
Top Tax Cases Of 2015: Bhutta v. IRS – Treaties And How They Affect Income Of Foreign Nationals
Issue
How can treaties between the United States and other countries affect the income of foreign nationals in the United States?
Facts
Bhutta, a citizen of Pakistan and a foreign medical school graduate, entered the United States in 2009 to participate in an internal medicine residency training program. During the three-year residency training program, for which he received an annual salary, Bhutta treated patients, with supervision; conducted and presented research; and supervised and trained third- and fourth-year medical students. His supervising and training of medical students consisted of having the medical students observe him during “rounds”, preparing the students for monthly examinations, and evaluating the students monthly.
Congratulations on your New Home Purchase…Oops! You’re liable for Seller’s Taxes!
Congratulations on your New Home Purchase…Oops! You’re liable for Seller’s Taxes!
As a buyer, no more rude shock can intrude on your new home celebration than finding out you are liable for Seller’s taxes. Understandably, by the time of your closing, you may have nearly depleted your bank account, paying the purchase price plus the myriad fees and charges for your new home. When the IRS comes calling soon afterwards, asking you to also pay Seller’s taxes, you can be excused for being very astonished. Yes, this can happen; this scenario is not as far-fetched as it may sound.
Negligence or Tax Fraud? What is “Negligent” and What Is “Willful” Conduct to the IRS?
What does the IRS consider to be negligent or non-wilful conduct when it comes to tax-related activity like filing income tax returns and making deductions? What does it consider wilful conduct? When is such activity tax fraud?
Tax fraud is a general term which is defined as taxpayer’s intent to defraud the government by not paying taxes that the taxpayer knows are lawfully due. Tax fraud can be punishable either civilly, criminally, or both. Under federal law, civil violations are primarily located in Title 26 and criminal violations mainly in Title 18, respectively, of the United States Code (“U.S.C.”).
Relating to the allocation of partnership liabilities and the tax implication of a foreclosure
Issue
What is the allocation of partnership liabilities and the tax implication of a foreclosure?
Related Tax Rule or Regulation
Internal Revenue Code Section 465
Internal Revenue Code Section 704
Internal Revenue Code Section 731
Internal Revenue Code Section 752
Internal Revenue Code Section 1001
Tax Regulation § 1.1001-2(c),
Case Study
WHAT IS AN OFFER-IN-COMPROMISE?
Taxpayers that are unable to pay their tax bill have several options. All is not lost. Taxpayers who can’t pay their tax liability or who create a financial hardship by paying this liability may take advantage of a federal tax program in which they utilize a mechanism known as an “Offer In Compromise” to resolve and settle these tax problems with finality. The Offer in Compromise (or “OIC” in IRS and legal jargon) program is not for everyone and the IRS advises that taxpayers explore all other payment options before submitting an OIC. An experienced tax professional is absolutely essential in all steps of the process of formulating, making, and awaiting the IRS to accept, an OIC.
PAYROLL TAX: THE TRUST FUND RECOVERY PENALTY
Employers must deduct taxes from their employees’ wages. Employers must make tax deposits and payments on time or they are subject to a Trust Fund Recovery Penalty (“TFRP”). To avoid the TFRP, employers must make sure that all employment taxes are collected, accounted for, and paid to the IRS when required . There are three parts or types of payroll or employment taxes withheld from the employee and reported on form 941, filed quarterly:
SURGEON WHO HID MONEY FROM WIFE AND IRS IN DIVORCE ACTION MAY GET PRISON TIME OF UP TO 95 YEARS FOR TAX FRAUD AND EVASION
Tax evasion is a serious crime. It is an enormous task and undertaking that rarely succeeds unless exorbitant monetary penalties and prison time are the ultimate goal. Taxpayers risk everything when they attempt to conceal any part of their financial portfolio, including any amount of their assets, from the IRS.
How Should You Respond to a Notice of a Tax Audit?
There are few things as disconcerting as receiving the notice that the IRS will be conducting a tax audit on your return. Such a notice can be very upsetting and understandably so when it is totally unexpected. However, instead of panicking or believing the worst, it is important to remember that the IRS will often conduct random audits every year which mean that your filing may actually be fine.
How to handle Tax Summons
Typically, when you are receiving anything from the IRS, the experience is very stressful. Of course, there is the positive experience of receiving a refund check, but when people receive anything other than this, great stress is typically involved. Many people even take steps to avoid opening the document altogether.
However, avoiding the situation can be very dangerous and will only work to escalate the situation even further. Most of the time, the IRS will request information through a particular form called an Information Document Request, Form 4564. Surprisingly, you actually have no legal obligation to respond to this form, but by avoiding it, you may find yourself in an even more stressful situation.