Prose by Tax Pros

Taxpayers often file their tax returns  late, the IRS penalizes them, and they  try to place the blame, rightly or wrongly,  on their attorneys, accountants, or return  preparers. In other words, taxpayers frequently  attempt to shirk penalties by  raising the reasonable-reliance-on-a-tax- professional defense. this is common  knowledge. What is not widely understood,  though, is that the Supreme Court  ruled many decades ago, in 1985, that  such a defense only applies in situations  where a return preparer gives erroneous  substantive tax or legal advice to a taxpayer,  not where the preparer simply  flubs the  ministerial task of meeting a  filing deadline. What is even more obscure  is the recent case, in 2019, extending  the historic Supreme Court decision  to cases where taxpayers rely on preparers  to e-file their returns, and something  goes awry. This article analyzes the gen...

The IRS is attacking partnerships that donate conservation easements to charitable organizations and then pass along the corresponding tax deductions to their partners. In an effort to dispense with cases quickly and avoid addressing the key issue — valuation of easements — the IRS often raises a long list of technical arguments. These generally focus on unintentional flaws with the deed of conservation easement, the appraisal, or Form 8283, “Noncash Charitable Contributions.” To the dismay of many in the conservation, tax, and legal communities, the Tax Court has ruled in favor of the IRS on technical issues in several recent cases. The IRS, leveraging the momentum from its recent victories, issued a release in late June describing a potential path to resolution (the settlement initiative). The Tax Court has a backlog  of conservation easement cases, with many more to come; the IRS has limited resources; and the IRS knows that many of the technical issues it is currently exploitin...