Tax

In Mitchell, (TC Memo 2000-145), the Tax Court awarded a taxpayer litigation costs attributable to an accuracy-related penalty after finding it was not reasonable for the IRS to impose such a penalty. In the original case ( Mitchell, TC Memo 1999-283), the issue was the rule in IRC section 162(a).

Since its overhaul was mandated by Congress in the IRS Restructuring and Reform Act of 1998, the IRS has made considerable progress putting the various parts of its reorganization plan into place. A major component of the IRS restructuring was its split into four major operating divisions, replacing the regional

Alimony Deductible When “Almost-Exes” Live Together Two taxpayers married in 1972. In 1994, the husband filed for a divorce and the couple signed a temporary agreement under IRC section 71(b)(1)(A), which provided that the husband would pay the wife $2,000 a month in alimony but both parties would continue to

In 1991 Eldon Kenseth was terminated by his employer after 21 years of service. He retained an attorney, under a contingent fee arrangement, and sued his employer under the 1967 Federal Age Discrimination in Employment Act. In 1993, he agreed to settle the case for $229,501. A portion of the

In many tort cases, as well as in class action lawsuits, the attorneys receive a contingent fee equal to a fixed percentage of the award or recovery. Whether the taxpayer must include the full award in his or her income or only the part remaining after paying the contingent legal

An English department chairman in a San Francisco public high school audited two university extension program courses overseas. The courses—one in Thailand and one in Greece— were taught by university professors and met on a regular basis. For each the taxpayer had to follow a structured syllabus, complete extensive reading

The size of the automobile you buy for business use matters to the IRS. In fact, there is a tax benefit to purchasing a heavier, less fuel-efficient automobile. The annual depreciation deduction for most automobiles used in a trade and business is subject to the limited luxury automobile rules (LLAR),

As a general rule, passive activity losses can offset only passive income and cannot be used to reduce active or portfolio income. Also, tax credits derived from passive activity can offset only taxes incurred from passive income. Any loss or credit that is disallowed becomes suspended and is treated as

The IRS announced that, beginning with the 2001 filing season, taxpayers will be able to check off a box on form 1040 and designate a paid individual tax return preparer to resolve processing-related issues. IR 2000–23 says the designee will be able to speak directly to IRS customer service representatives

Generally, shareholders of Subchapter S corporations are able to use their distributive share of losses to offset income from other sources to the extent of their basis in stock and debt in the company under IRC section 1366(d)(1). With respect to debt loss, the IRS and the courts historically have

When negotiating a divorce settlement, the issue of how to separate ownership of a couple’s closely held business can cause significant problems. One option is for the corporation to redeem the stock owned by either of the spouses. The taxation of such a transaction, however, has been the subject of