Firm Resolves IRS Dispute

A former California law firm and one of its partners have reached an agreement in a dispute with the Internal Revenue Service over documents related to tax shelter advice. Details of the agreement reached last week are not available, the National Law Journal reports. The defunct firm–Lee, Goddard & Duffy…

Jul 31, 2007 11:46 AM CDT

IRS E-Mail Advice to Be Disclosed

A federal appeals court has ruled that the Internal Revenue Service must release e-mail advice prepared by the Office of Chief Counsel for field personnel. The U.S. Court of Appeals for the District of Columbia Circuit disagreed with the IRS, which contended that e-mails prepared in less than two hours…

Jul 25, 2007 7:52 PM CDT

Taxpayer v IRS in Sex-Change Claim

A ground-breaking tax case is scheduled to go to trial next week over an IRS denial of a taxpayer’s medical expense deduction. Rhiannon O’Donnabhain, 63, wrote off $25,000 in surgery expenses. But the Internal Revenue Service disallowed them, saying that her sex-change operation six years ago, from male to female,…

Jul 17, 2007 8:16 PM CDT

Judge Calls Interference on Prosecutors, Dismisses 13 from KPMG Case

Updated: Saying that prosecutors inappropriately interfered with their defense, a federal judge in Manhattan has dismissed charges against 13 of 16 KPMG former employees charged in a tax shelter fraud case. In a ruling today, U.S. District Judge Lewis A. Kaplan said he had no choice but to dismiss the…

Jul 16, 2007 7:37 PM CDT

New IRS Weapon: Tax Professionals

New IRS rules that hold accountants, lawyers and others who prepare tax returns more accountable for client errors are changing the way some practice and may be driving a wedge between client and professional. Tax professionals now at least arguably have more accountability than their clients for filing a problematic…

Jul 12, 2007 1:28 AM CDT

More Tax Evaders Face New $5 K Fine

Unhappiness about the Iraq War is prompting more Americans to protest by not paying their taxes, even though a new law ups the ante for tax evasion from $500 to $5,000. Despite the threat of criminal prosecution, reports AP, some 8,000 to 10,000 are protesting the war by refusing to…

Jul 5, 2007 10:21 PM CDT

Tax Shelter Probe Points to More Attys

It isn’t just Sidley Austin and the now-defunct Jenkens and Gilchrist that come to mind these days when one thinks of the federal investigation of allegedly abusive tax shelters. Other law firms names, too, are in the news for those who are following the sprawling tax shelter investigation brought by…

Jul 4, 2007 12:10 AM CDT

NY Attorneys Failed to File Tax Returns

Four lawyers are among seven professionals who recently pleaded guilty to misdemeanor charges of failing to file New York state tax returns. The four attorneys, who earned between just under $400,000 and more than $2.7 million during the period, did not file state tax returns for four consecutive years, according…

Jul 3, 2007 9:52 PM CDT

Tax on Emotional Damages Upheld

A federal appeals panel has reversed course and upheld the power of the federal government to tax an award for emotional distress. The U.S. Court of Appeals for the D.C. Circuit ruled today that Congress has the power to impose the tax under Article 1, Section 8 of the Constitution.…

Jul 3, 2007 8:08 PM CDT

High Court Declines Tax Case

The U.S. Supreme Court yesterday refused to hear an appeal seeking to exempt an out-of-state business from income and franchises taxes in West Virginia. MBNA, the credit card unit of Bank of America, had no physical presence in the state. An appeals court ruled it was nonetheless subject to the…

Jun 19, 2007 5:28 PM CDT

Filing Error Costs Gov’t $100 M Tax Bill

Oops. After winning a tax evasion case against a man described as the biggest tax evader in U.S. history, federal prosecutors made a mistake. They cited the wrong statutory language in a written plea agreement with telecommunications entrepreneur Walter Anderson, reports AP. And that means the government can’t recover some…

Jun 19, 2007 1:07 AM CDT

Diplomatic Property-Tax Case Allowed

The U.S. Supreme Court ruled today that foreign governments are not immune to suits for payment of local property taxes. “Property ownership is not an inherently sovereign function,” said the majority opinion by Justice Clarence Thomas. The court ruled 7-2 for New York City, which is seeking back property taxes…

Jun 14, 2007 4:06 PM CDT

Misconduct Cited in KPMG Motion

Ex-employees of KPMG cite a “pattern of misconduct” by the government in their motion to dismiss the criminal case against them.

They contend comments by prosecutors at a February 2004 meeting put pressure on their employer to cut off legal fees, according to the New York Law Journal. The employees had been accused of helping create illegal tax shelters.

Jun 12, 2007 12:27 PM CDT

IRS Acts After IBM Saves $1.6 Billion

The Internal Revenue Service has moved to close a loophole that saved IBM $1.6 billion in income taxes. The agency will issue regulations requiring companies to pay taxes on stock repurchases by international subsidiaries, the Wall Street Journal (sub. req.) reports. That will make the earnings subject to U.S. tax…

Jun 7, 2007 3:29 PM CDT

Lawyer, Big Four Partners Charged in Tax Fraud Scheme

A former lawyer for the Internal Revenue Service is among four past and present partners of Ernst & Young charged today in an alleged tax fraud scheme intended to benefit wealthy clients and earn big fees. Robert Coplan, 54, a Texas lawyer who once worked for the IRS Legislation and…

May 30, 2007 8:26 PM CDT