Prose by Tax Pros

  The IRS believes that certain partnerships that donate conservation easements are using inflated appraisals to claim excessive tax deductions. The partnerships disagree, and battles ensue. They often entail prolonged audits, administrative appeals, and Tax Court trials. All this fighting has a large cost to the IRS, the partnerships, and the judicial system. The enclosed article provides an overview of the rules related to conservation easement donations, identifies supposed “technical” flaws that the IRS attacks, describes several Tax Court holdings that are beneficial to all partnerships, explores the use of Qualified Offers, and demonstrates that easement cases can be resolved before trial where the IRS acts reasonably by focusing on the real issue, valuation. 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 Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Grou...

  The IRS has drastically changed its procedures for reviewing appraisals. It first issued a memo about Section 6695A penalties, which eliminated the multi-level review procedure formerly used to safeguard appraisers against improper penalties and premature disciplinary referrals. Next, the IRS ignored several suggestions from accounting and valuation organizations about potential problems. Doubling down on its initial position, the IRS most recently issued a Chief Counsel Advisory to its personnel further reducing appraiser rights. This article, which supplements an earlier one, analyzes the main concepts around conservation easement donations, evolution of appraiser penalties, disregarded suggestions from professional organizations, and recent IRS actions depriving appraisers of historical protections. 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 Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka...

According to the IRS, many partnerships have incorrectly treated their owners as “limited partners,” thereby allowing them to escape self-employment (“SECA”) taxes on their distributive shares. The positions taken by partnerships are based on a law enacted in 1977, which has never been updated or clarified, by Congress or the IRS. The broad scope of the “limited partner” exception from the outset, coupled with governmental inaction during the next five decades, has led to chaos. This article, the first in a series, chronicles the major events culminating in the current confusion about the application of SECA taxes to modern entities.  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 Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.