Appeals Office Memorandum Update – Audit Planning Opportunities Arise


The IRS recently updated its policies to provide that Appeals Officers will not raise a new issue nor reopen an issue on which the taxpayer and the IRS are in agreement.  (For those lucky enough to be unfamiliar with the IRS tax dispute process, the Appeals Office provides a cost-efficient means for taxpayers to haveRead More

You can’t make this stuff up – are parsonage allowances unconstitutional?


As most folks around Birmingham know, we at Sirote represent many civic, charitable, and faith-based organizations.  We like that work and see it is a way to support the good work being done by these worthy organizations.  We recognize and highly value the key role these organizations play in serving the needs of our communitiesRead More

Why responding to IDRs became much more important


If you have been involved in an audit, you have probably reviewed or received an IDR or Information Document Request.  IDRs are informal requests issued by the IRS to obtain information or documents from the taxpayer (and in some cases, a third party).  The deadline to respond to an IDR is set by the IRSRead More

Proposed form to report under new Section 1411


In late summer, we posted in our Tax Planning blog an article entitled “New Section 1411:  A Maze of New Rules”.  Under this blog entry, we outlined how new taxes under §1411 will cause additional tax (compared to taxes in prior years) to be collected from taxpayers beginning in 2013 that will be surprising andRead More

Audit alert – The IRS knows more about your revenues than you realize


Beginning in 2012, all payment processors (credit card companies, banks, etc.) were required to file 1099-K forms with the IRS reporting the gross amount of each merchant’s card transactions for the 2011 year, as well as to provide a corresponding statement to merchants.  The 1099-K forms filed by the credit card companies report the creditRead More

Documenting loans by owners to their business is critical


Small business owners typically invest significant amounts of money in their businesses.  Whether that money is a loan or a capital contribution is important for tax purposes because loan repayments are not included in gross income, while other payments to an owner may be taxable.  Likewise, if the business cannot repay the money, deduction ofRead More

Risks in consenting to voluntary interviews with IRS criminal investigators


In most white collar and tax criminal investigations, investigators attempt to conduct “voluntary” interviews with potential targets of prosecution.  These interviews or attempts are conducted when the subject is not in custody, and often in such settings as an office, a conference room, home, or even in an open space such as a parking lot. Read More

What constitutes “reasonable cause” and reliance on tax advisors – mixed messages from the Tax Court?

Tax Penalties

The Tax Court (Judge Halpern) recently issued a third opinion (“Whitehouse-III”) in the ongoing conservation easement litigation between Whitehouse Hotel Ltd. (“Whitehouse”) and the IRS. The focus of this blog is the opinion’s relevance to “reliance” on a professional and how the decision from Halpern contrasts with another recent Tax Court decision in Crimi v.Read More