Prose by Tax Pros

In life, things often are going great, until they are not. This is true in the tax world, too. Congress introduced the employee retention credit (“ERC”) in early 2020 to assist businesses struggling because of COVID. Things started positively, but they changed when the IRS began identifying significant numbers of aggressive or fraudulent claims. The IRS increased enforcement efforts. This scrutiny has already triggered finger pointing in various directions, with more on the way. This article explains the congressional and IRS guidance regarding ERCs, deadline for making claims, potential consequences facing taxpayers and advisors engaged in improper behavior, and obscure issues sparked by two recent ERC events events. 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.

You start with the macro and then move to the micro, as time permits and need demands. This method is followed in many contexts, including taxes. Congress first introduced the employee retention credit (“ERC”) in early 2020, and then made several legislative tweaks thereafter. The IRS, likewise, issued multiple Notices over the years supplying more detail. Naturally, as time passes and unanticipated issues arise, the guidance becomes more focused, more granular. That is precisely the case with ERCs. This article summarizes the main ERC rules, prior guidance on whether governmental employers are eligible for ERCs, and a recent Chief Counsel Advice exploring the status of federal credit unions. 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.

The IRS has argued that the existence of Tax Result Insurance might deprive an entity of partnership status, taxpayers cannot claim deductions for premiums paid, and purchasing coverage supposedly demonstrates that taxpayers lack reasonable cause for their positions, such that penalties apply. The IRS has focused these arguments on partnerships donating easements, but these extreme positions should concern all insurers and taxpayers for several reasons. First, the IRS is now taking stances that directly contradict those that it adopted earlier in regulations and Revenue Procedures. Second, the use of Tax Result Insurance is increasing in many areas. Finally, if the IRS were to convince the courts to accept any of three positions that it is currently advocating in the easement field, it likely would attempt to apply them to the detriment of taxpayers in many other situations, too. This article, which is the third in a series, explains why certain taxpayers are acquiring insurance, two m...

  Taxpayers with Canadian retirement plans have long faced tricky issues when it comes to U.S. income taxes and information-reporting duties. As the situation evolved over time, the IRS issued several pieces of guidance that facilitated tax-deferral and decreased disclosure obligations. The IRS ultimately announced that it would grant automatic, retroactive and prospective, tax-deferral elections. Nonetheless, the IRS continues to challenge taxpayers who fall into non-compliance. This article explains the normal tax and reporting requirements for taxpayers with worldwide reach, special rules applicable to Canadian retirement plans, evolution of solutions offered by the IRS, and a recent Tax Court case highlighting all the key issues. 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.