In a 2013 count case in Wisconsin the Freedom From Religion Foundation (FFRF) challenged the Minister’s housing allowance, claiming it provided an unconstitutional subsidy of religion. They won that case, but it was overturned on appeal. The reason for overturning it was that the appeals court indicated that the FFRF did not have standing (or reason to sue) as they had not been damaged by the housing allowance law. The FFRF took it to heart and certain leaders in FFRF paid themselves a housing allowance and excluded it from tax on their individual 1040’s. The IRS disallowed some of them. This led to a new suit, heard by the same Wisconsin judge who made the 2013 ruling. Once again, she ruled the housing allowance unconstitutional.
Tag Archive for Tax Court
About this time every year, my wonderful staff of attorney-advisors presents me with early drafts of the discussion of the ten most litigated issues in federal courts that are ultimately published in the National Taxpayer Advocate’s Annual Report to Congress. Editing these drafts is one of my favorite tasks, because I get to review in a concentrated fashion a significant swath of tax litigation. There are always one or two cases I have missed over the year that leap out at me during the editing process. Mescalero Apache Tribe v. Commissioner is one such case. Read more
Every time we turn around, it seems there’s a new development in the online sales tax debate. As states continue to get involved and look for new ways to bolster their revenue, the issue continues to grow larger and more complex. Now Indiana is looking to the courts to settle the matter.
Indiana’s Online Sales Tax Lawsuit Read more
The linchpin legislation of the U.S. government in its effort to combat tax evasion abroad over recent years has been the Foreign Account Tax Compliance Act (FATCA). Last week, the latest legal challenge to FATCA was thwarted when the United States Court of Appeals for the Sixth Circuit affirmed a lower court’s decision to dismiss the case against FATCA.
Quick FATCA Background Read more
High net worth individuals are loathe to transfer assets to any entity over which they have no control. This fact creates an unresolvable problem when forming an offshore asset protection trust: so long as a U.S. person can exert even a modicum of control over a foreign entity, a U.S. court has sufficient grounds to rule that a U.S. based debtor can repatriate assets. More importantly, failure to comply with a repatriation order could lead to contempt citation against the U.S. debtor. The facts of Federal Trade Commission v. Affordable Media typify this problem. Read more
A Canadian man pleaded guilty today in Rochester, New York to conspiring to defraud the United States and stealing government funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney James P. Kennedy Jr. for the Western District of New York. Read more
One of the primary objections I hear from insurance agents about captives is that commercial policies are comprehensive. But, the devil is really in the details here — or, more specifically, in the legal precedent interpreting the policies.
For example, how comprehensive is a duty to defend? On the surface, the wording looks pretty iron clad. But there’s a big split among the states as to what duties this actually encompasses: Read more
Self-preparing your tax return can be a risky endeavor, especially for U.S. expats with heightened reporting obligations.
Expat taxpayers are particularly susceptible to errors because of the complex international tax issues and additional reporting requirements that can significantly affect the tax return of a U.S. citizen living abroad.
A recent U.S. District court case has again shone a spotlight on the lack of a clear statutory or regulatory definition of “willful” for purposes of applying the more severe penalties for failure to file the FBAR.
In Bedrosian v. United States, 2017 U.S. Dist. LEXIS 56535 (ED PA 2017), the Court denied summary judgments by the both taxpayer and government on the issue of the taxpayer’s culpability in failing to report a Swiss bank account on a timely-filed FBAR.
This is one more of my posts about Mr. FBAR. Mr. FBAR is a mean, nasty vicious thug who has no place in any civilized society.
Thomas Jefferson once said:
Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.
Following the trend of the past several years, the Tax Court continues to review foreign earned income exclusion cases at a relatively high rate. In most of the recent cases, the Tax Court has denied the FEIE claims on a number of different grounds.
Taxpayers who do not agree with their notice of assessments or reassessments can file a notice of objection, appealing the Minister’s decision. Generally, one would first to go the appeals division as opposed immediately to Tax Court. Sometimes we file a T1 adjustment form where the Ministers’ adjustments are simply based on incorrect information. However, where there is a misinterpretation of the facts or it is a grey area, the appeals process is the best route. The appeal process also stops the tax collection process but still with arrears interest accruing on the account until the matter is resolved.