Prose by Tax Pros

Taxpayers in tax disputes with the IRS can seek judicial review in any one of three courts, but they often choose the Tax Court. This makes sense because the Tax Court is favorable to taxpayers in many ways. For instance, the parties must work cooperatively to exchange evidence, narrow issues, and agree on facts, and pre-trial discovery demands are often minimal. Things have started changing, though, particularly when it comes to cases involving conservation easements. This article explains the IRS’s main data-gathering tools during audits, pre-trial discovery actions, general limitations on depositions of potential witnesses, and three recent Tax Court Orders allowing the IRS to conduct non-consensual depositions of various persons affiliated with partnerships that donated easements. 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 Intern...

Creating foreign entities to safeguard assets is not necessarily problematic for U.S. taxpayers, but failing to characterize them appropriately sure is. Taxpayers have utilized foreign vehicles called “stiftungs” for decades. Various court decisions and administrative rulings over the years have concluded that certain stiftungs should be treated as trusts. This triggers the duty for taxpayers to file several information returns with the IRS, the most critical of which are Forms 3520 and Forms 3520-A. Violations lead to large penalties, endless assessment periods, and other things taxpayers want to avoid. This article defines the concept of foreign trusts, chronicles the major cases and IRS rulings from 1955 to the present, explains the IRS’s foreign trust compliance campaign, and explores potential relief for taxpayers thanks to a recent Revenue Procedure. 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 t...