Prose by Tax Pros

Are taxpayers who acquire Private Placement Life Insurance (“PPLI”) doing something wrong? Certain politicians and academics think so. They argue that taxpayers who have the financial ability to purchase PPLI are somehow “abusing” the system. This article explains the general tax rules favoring life insurance policyholders and their beneficiaries, recent reports and cases putting PPLI in a bad light, and three recent proposals urging legislative changes by Congress and/or increased enforcement by the Internal Revenue Service. 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.

Congress instructed the IRS to publish guidance on specific, limited issues related to the Employee Retention Credit (“ERC”). The IRS did so, first issuing regulations about its ability to recapture “erroneous refunds,” followed by additional regulations about its authority to grab related interest payments. These new rules, if they withstand scrutiny, will enhance the IRS’s enforcement capabilities. This article, the latest in a long series, explores four major ERC laws, two sets of regulations recently introduced by the IRS, various assessment periods applicable to ERC claims, and how they all interrelate.  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.

Enforcement actions regarding Employee Retention Credit (“ERC”) claims are on the uptick. An important question is how long the IRS and the Department of Justice have to carry out their missions. The normal rules on timing are straightforward, but things get complicated when one considers exceptions, special rules for particular quarters, potential changes contemplated by Congress, and a novel decision by a Court of Appeals that has received little attention. This article, the latest in a long series on ERC issues, explores the key timing issues, old and new, in the context of ERC disputes. 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.

  Many taxpayers parting ways with the United States must file Form 8854 (Initial and Annual Expatriation Statement). Failure to do so is problematic because it can expose taxpayers to the notorious “exit tax.” Few people have seemed to notice, but significant changes might be on the way. This article analyzes worldwide obligations of U.S. individual taxpayers, exit taxes, foundations for Form 8854 filing duties, legislative proposals for increased enforcement, a recent case invalidating the IRS document that introduced Form 8854, and IRS actions in other contexts where the courts have shot down administrative guidance. 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.

The IRS tries to gather as much information and documentation as possible when conducting an audit. It attempts to get the data directly from the taxpayer, but it often turns to other sources, too. This is called making third-party contacts. The IRS has been criticized over the years for giving insufficient warnings to taxpayers before starting third-party contacts, and Congress took notice. It enacted a law creating safeguards against inappropriate third-party contacts and later strengthened it. Now, the IRS has issued proposed regulations that severely undercut historical taxpayer protections. This article analyzes the filing and record-keeping duties of taxpayers, information-gathering tools of the IRS, and changes in protections for taxpayers and third-parties over the years. 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 ...

Conservation easement disputes have lasted nearly a decade and the end is far for clear. What is apparent, though, is that the IRS is now eager conclude as many cases as possible, and fast. Why? The IRS might be concerned about losing a major case on valuation issues, which could unleash many taxpayer victories in later cases. Another possibility is that the IRS wants to clear its massive inventory of existing SCET cases. Yet another motive might be that battling sophisticated taxpayers in high-dollar, complex, document-intensive cases takes a serious toll on the IRS. The true reasons for the IRS’s desire to resolve conservation easement cases now is not particularly important; what matters is understanding the relevant settlement programs and their nuances. This article, which expands on several of my earlier ones, compares and contrasts three different IRS programs. 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 ...

  What began as an initiative to help businesses keep workers on the payroll during the COVID crisis has become a quagmire. The processing of new employee retention credit (“ERC”) claims is on hold, guidance is often dense and retroactive, legislation is in limbo, and audits and investigations are starting in earnest. Convinced that billions of dollars in ERC claims were improper, the government has initiated several actions. This article, another in a long series by the author, explores recent administrative, legislative and executive actions to address ERC 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 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.