Prose by Tax Pros

Enforcement actions against alleged promotors of abusive transactions and taxpayers who participate in them are firmly linked. Therefore, effectively defending against IRS challenges requires an understanding of the overlapping rules, standards, and procedures. Many taxpayers are myopic, thinking solely about how certain events will affect them personally and immediately. This is understandable, but it rarely achieves the best overall result when it comes to multi-faceted disputes with the IRS. This article explains unique aspects of promoter penalties, various actions the IRS takes in promoter investigations, effects of such measures on taxpayers, recent events suggesting that investigations might surge in the near future, and thoughts about the best path forward in the current environment. 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 partner in the Tax Controversy Section of Chamberlain Hrdlicka.  He defen...

If people have learned anything from the recent disputes over conservation easement donations, it is that IRS has a playbook. It involves announcing that the main problem is excessive valuation, followed by attacking essentially everything but what the donation is worth. The IRS often concludes that taxpayers should get a tax deduction of $0, and steep penalties apply. The IRS has already experienced problems using this strategy in the easement context, and things might get harder if it plods ahead in the same manner when it comes to art donations. This article explains the general rules for donating artwork, recent IRS announcement about “promotions” of improper donation schemes, and hurdles that the IRS might encounter if it insists on applying the economic substance doctrine, alleging that art donations are worth $0, or badgering recipients of such donations. 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 partne...

  Congress realized that taxpayers desperately needed financial help during the COVID crisis, so it created the Paycheck Protection Program and the Employee Retention Credit. Taxpayers that got dual relief are beginning to understand that enforcement actions, timeframes, and consequences differ for each. This article, the latest in a multi-part series, explains the fundamentals of these benefits, interplay between the two, and distinct mechanisms used to recoup benefits that were improperly issued to taxpayers. 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 partner in the Tax Controversy Section of Chamberlain Hrdlicka.  He defends clients in tax audits, tax appeals, and Tax Court litigation, covering both domestic and international issues.