Cory Halliburton | TaxConnections

23 Mar 2022

Joint Committee On Taxation Report On Tax Treatment of Charitable Contributions

Joint Committee on Taxation Report on Tax Treatment of Charitable Contributions

On March 11, 2022, the Joint Committee on Taxation published its 49-page report (the “Report”) relating to the federal tax treatment of charitable contributions. The Report was the subject of a public hearing held on March 17, 2022 where the Senate Committee on Finance considered economic issues relating to federal tax incentives for charitable giving and data relating to charitable contributions. See hearing at Hearing | Hearings | The United States Senate Committee on Finance.

Overall, the Report is a useful resource, although it is not “law” and there are many intricacies that the Report does not address or that may be addressed, just not in full detail. This Insights article provides a brief summation of some key statistics and content of the Report.

Key Statistics

Written by Cory Halliburton | Posted in Charitable Contributions • Joint Committee On Taxation

27 Jan 2022

IRS’s Imperfect Designation of “Immediate Supervisor” Deemed Insufficient To Overturn Penalties

Tomato, Toma-toe: IRS’s Imperfect Designation of “Immediate Supervisor” Deemed Insufficient to Overturn Penalties Under Code Section 6751(b)(1)

Section 6751(b)(1) of the Internal Revenue Code provides that “[n]o penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination[.] . . .” 26 U.S.C. § 6751(b)(1). In the Tax Court opinion of Long Branch Land, LLC v. Commissioner, No. 7288-19, T.C. Memo. 2022-2 (U.S. Tax Ct. Jan. 13, 2022) (mem. op.), the court addressed what is meant by “immediate supervisor,” as that term is used in Section 6751(b)(1), as well as the doctrine of “presumption of regularity.”

In the case, Long Branch Land, LLC (“LBL”) claimed a $10,425,000 charitable contribution deduction for a conservation easement it granted to a charitable organization as well as a $3,475,000 charitable contribution deduction for LBL’s donation of a fee simple interest in real property associated with that easement. The IRS selected LBL’s return for examination.

Written by Cory Halliburton | Posted in IRS Audit • Section 6751(b)(1)

25 Jan 2022

Market Value vs. Book Value – Proving Consequential Damages

On January 14, 2022, the Texas Supreme Court issued its opinion in Signature Industrial Services, LLC v. Ogden, _ S.W.3d _ (Tex. Jan. 14, 2022) [20-0396). The court address the age-old question of How to measure consequential damages in a breach of contract case? In its 30-page opinion, the supreme court answered that basic question and a few others. This article focuses on the former.

Facts: Signature Industrial Services, LLP (SIS) contracted with International Paper Company (IP) for SIS to provide services, with a total payment obligation of about $775,000. The scope of the project grew, and SIS invoiced $2.4 million in addition to what IP paid. See id. at 3. Before litigation between them ensued, SIS received an acquisition purchase offer of $42 million from a third party. IP was unaware of the potential purchase transaction. But, due allegedly to IP’s failure to make payment, SIS faced significant cash-flow issues which led to payroll taxes and other debts that SIS could not manage such that SIS “all but collapsed.” SIS and its president sued IP, alleging breach of contract and fraud claims. SIS then received three more offers from the prospective purchaser. The first was at the $42 million level, although with less cash up front. The latter two offers were around $10 million each. SIS rejected all of them and proceeded against IP. Id. at 4.

Written by Cory Halliburton | Posted in Market Value V. Book Value

20 Jan 2022

Document Retention For Engineering And Architecture Services Companies

Document retention.

That phrase reminds me of a Dilbert cartoon from about a decade ago that depicted the “pointy-haired boss” confronting Alice, the engineer, about her exceeding the company’s permitted email storage. The boss was depicted holding a white piece of paper. When Alice responded to his apparent sole work activity of carrying a piece of paper around the office, the boss emphatically informed her, “It’s not a piece of paper; it’s a document!”

That cartoon apparently made the “keep permanent” category of my brain’s retention protocol.

Now, many years later, my law practice includes engineering, architecture and related professional services firms that have sought counsel about, among other things, document retention policies, procedures, and practices. This article provides an overview of business and legal considerations for developing and implementing a document retention program, with a focus on a few unique considerations for engineering and related professional services firms.

Written by Cory Halliburton | Posted in Document Retention • Engineering And Architecture Services