Prose by Tax Pros

Business has evolved more quickly than tax law, and this has led the IRS to take conflicting positions about the meaning of “limited partner.” The IRS is characterizing this term broadly or narrowly in different contexts in furtherance of its goal of always maximizing tax revenue. When it comes to the passive activity loss rules in Section 469, the IRS argues that “limited partner” must be loosely defined. However, when a case involves whether certain amounts from partnerships should be subject to self-employment taxes, the IRS argues for a tight definition of “limited partner” under Section 1402. This article, which is the third in a series, compares and contrasts the positions taken by the IRS in two important areas. 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.

Voluntary compliance is a hallmark of the U.S. tax system; taxpayers are expected to proactively file all returns with the IRS and pay all amounts due. Many taxpayers fail to meet that commitment, of course. This is where whistleblowers come into play. If they can provide data to the IRS that leads to the collection of taxes, penalties, and interest from non-compliant taxpayers, they stand to receive a percentage of the take. This financial reality has incentivized whistleblowers to bring to the IRS’s attention taxpayers falling into various categories, including “accidental Americans.” This article explains obligations of U.S. persons with foreign activities, describes the exit tax, identifies a special relief program for former U.S. citizens, summarizes the whistleblower process, and examines a recent Tax Court case that brings these concepts together. 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...