Posts

Settling Syndicated Conservation Easement Cases with the IRS

Image
There is a method the IRS often uses to combat transactions it opposes. The precise steps vary, but it generally entails warning the public, labeling items “abusive,” conducting lots of audits, forcing weak cases to trial quickly to obtain favorable court decisions, introducing settlement programs with terms designed to tempt risk-averse taxpayers, and encouraging Congress to make legislative changes. Does this sound familiar? It sure does to those involved with conservation easements, with one exception. When it comes to easements, the IRS has been launching settlement programs for years, which, for different reasons, have made resolving matters before trial unappealing and/or impractical for many partnerships. This article, which expands on earlier ones, examines challenges with three IRS settlement programs. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients ...
Read more

The Unavoidable Overlap of Promoter Investigations and Taxpayer Audits – Interactions and Insights

Image
Enforcement actions by the IRS against alleged promoters of abusive transactions and the taxpayers who participate in them are firmly linked. Therefore, defending effectively against IRS challenges requires an understanding of the overlapping rules, standards, and procedures. This article explains unique aspects of so-called promoter penalties, various actions the IRS takes in connection with promoters, effects of such IRS measures on taxpayers who engaged in the transactions under scrutiny, recent events suggesting that promoter investigations might surge, and thoughts about the best path forward in the current environment. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.
Read more

IRS Issues New Worker-Classification and Section 530 Guidance in 2025

Image
Companies treat some workers as independent contractors, and the IRS insists that they are really employees. This is an old story, one that often triggers disputes. The IRS generally has many procedural advantages when it comes to tax disputes, but companies have a unique tool when it comes to worker-classification fights. This obscure instrument is called “Section 530.” Used correctly, it can result in companies avoiding employment taxes and penalties for past years, while retaining the ability to treat workers as independent contractors in future years. This article, which builds on several others by the author, explains the existing authorities regarding Section 530 and then analyzes the newest guidance from the IRS in 2025. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and inte...
Read more

The Limited Partner Exception to SECA Taxes: Three Tax Court Decisions and Future Clashes

Image
  Ambiguity about when distributions to “limited partners” are exempt from self-employment taxes has existed for five decades. This vagueness has led to many disputes, including numerous cases now winding their way through the courts. The Tax Court has made some significant rulings already, but many of the key issues are far from resolved. This article, the latest in a series, summarizes the relevant law and regulations, describes the only precedential case on the books for many years, explains the Compliance Campaign launched by the IRS, analyzes three recent Tax Court decisions, and identifies several additional cases on the way. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.
Read more

Draft Legislation and Other Matters Threatening Private Placement Life Insurance

Image
Justified or not, some members of Congress and the IRS are passionate about eliminating tax benefits associated with Private Placement Life Insurance (“PPLI”). The problem, according to those urging a legislative change, is that only certain taxpayers are financially able to access PPLI and this limitation somehow undermines the congressional purpose for offering insurance-related tax inducements. This article, which builds on an earlier one, explains the main benefits of PPLI, chronicles major events over the past decade, and examines the draft legislation that has the potential to upend present treatment of PPLI. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.
Read more

The Resurgence of Qualified Opportunity Zone Issues: Recent Tax, Enforcement, and Legislative Matters

Image
Not long ago, it was hard to go anywhere without hearing about Opportunity Zones. Time passed, and attention waned. That will soon change, though. Why? Some taxpayers recently maximized their tax-reduction abilities, the chance to defer taxes on prior capital gains will end soon, permanent exclusion of certain passive income from taxes will be accessible in the near future, the IRS is focusing on two groups heavily involved in Opportunity Zones (i.e., high-income individuals and large partnerships), and Congress is considering changes to the rules in 2025. This article, which expands on two earlier ones, addresses these key issues and others. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.
Read more

40 Important Events in the First Five Years of the ERC

Image
Five years have passed since Congress introduced the Employee Retention Credit (“ERC”) in 2020, a remarkably long list of things have happened since then, and most people have trouble keeping up.   Failure to understand the four ERC laws, evolving IRS guidance, court cases, and related matters could result in financial tragedy for many companies.   Mindful of this reality, this article, which builds on more than two dozen others by the same author, provides legislative background and then explores 40 important events that have occurred during the first half-decade. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.)  is a partner at Eversheds Sutherland.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.
Read more