TAXLITIGATOR – Tax Controversy (Civil & Criminal) Report

We are pleased to announce that Robert Horwitz, Cory Stigile and Philipp Behrendt will be speaking at the upcoming Strafford webinar “Partnership Losses in Excess of Basis: Preparing for the IRS Audit Campaign,“ Tuesday, June 20, 2023, 10:00 a.m. – 11:50 p.m. (PST).

In February 2022, the IRS announced a partnership campaign to include audits of partners’ deductions of flow-through losses from partnerships. The Service believes that partners are deducting losses in excess of basis rather than suspending these losses when required. The IRS heightened its ability to track partners’ capital by implementing requirements to report negative tax basis capital in 2019, all partners’ capital accounts beginning in 2020, and added disclosures for Section 704(c) built-in gains and losses. The IRS is using data analytics to identify partnerships that are most likely noncompliant.

Practitioners who have been scrambling to meet these added reporting requirements must prepare to defend these positions and the calculations reported. Determining a partner’s outside basis, including whether tax basis capital has been appropriately captured and a partner’s share of liabilities, is complicated. Recent reporting rules have led to the discovery of allocation errors.

Pass-through entity advisers need to prepare for upcoming examinations and know how to handle audits of pass-through entities.  Listen as our panel of IRS partnership examination experts explains how to properly maintain and support partners’ basis in partnerships and how to defend these calculations when representing partners.

Click Here for More Information

I am very pleased to announce and ask you to Save the Date for this years ABA National Institute on Criminal Tax Fraud & Tax Controversy to be held December 7-9, 2023 at Wynn, Encore in Las Vegas, Nevada. I am honored again to be serving as Co-Chair with Kathryn Keneally. We look forward to the best programs in the nation on civil and criminal tax controversy and litigation and well—Las Vegas. 

The National Institute on Criminal Tax Fraud and the National Institute on Tax Controversy, combined together in one event, comprises the yearly gathering of the criminal tax controversy and criminal tax defense bar. The program brings together high-level government representatives, judges, corporate counsel, and private practitioners engaged in all aspects of tax controversy, tax litigation, and criminal tax prosecutions and defense. 

Stay tuned. 

Click Here for More Information

Steven Toscher, Managing Principal
Hochman Salkin Toscher Perez P.C.
toscher@taxlitigator.com

HOCHMAN SALKIN TOSCHER PEREZ P.C. is proud to be recognized by Chambers and Partners as one of only three top tier law firms in its U.S. 2023 High Net Worth Guide in the category of Tax: Private Client, as well as a top firm nationwide in the Tax Controversy and Tax Fraud areas.

Chambers concluded that HOCHMAN SALKIN TOSCHER PEREZ P.C., is “a superb firm for tax controversy matters” and “has a hugely impressive track record in tax controversy, alongside criminal and civil litigation at both state and federal levels.” Chambers quotes clients as noting: “They’re my go-to firm for sophisticated tax controversy matters.” “The firm’s lawyers have deep, substantive knowledge and key connections throughout the California federal bench.“

In addition to the recognition of the firm, Steven Toscher, Dennis Perez and Sandra R. Brown were named top tier lawyers in the 2023 High Net Worth Guide Tax: Private Client USA Rankings. Steven was also ranked as a top Tax Fraud litigator for a third consecutive year.

Chambers reports that Steve “is noted for his experience advising clients on contentious tax matters, including IRS and DOJ litigation. He regularly works with corporations and individuals.” “He is a well-regarded tax practitioner who advises clients on sensitive issues, including criminal tax fraud investigations.” “Steve Toscher has an excellent reputation as a litigator.“

Steve has been representing clients for almost 40 years before the United States Tax Court, the Federal District Courts, the Internal Revenue Service, the Tax Division of the U.S. Department of Justice and the Offices of the United States Attorney, numerous state taxing authorities in federal and state court litigation and appeals. He is a Certified Specialist in Taxation by the State Bar of California Board of Legal Specialization and is often ranked in California as well as nationwide as a top tax lawyer including being honored by the Taxation Section of the California State Bar with the 2017 Joanne M. Garvey Award.  

Dennis Perez represents high-net-worth clients in domestic tax examinations and administrative appeals as well as in civil and criminal litigation. As noted by Chambers, “He is one of the strongest practitioners in the country on the foreign reporting space.” “He’s a great practitioner. He is definitely somebody I can recommend in this area.”

A former senior trial attorney with the IRS District Counsel in Los Angeles, California, Mr. Perez has, for more than 35 years, represented and advised clients in foreign and domestic civil tax examinations and administrative appeals where substantial civil income tax and penalty issues may arise, and he has extensive experience in representing clients in criminal tax fraud investigations and prosecutions. He is also a Certified Specialist in Taxation, the State Bar of California Board of Legal Specialization. Mr. Perez is the first-ever recipient of the Los Angeles Lawyer Sam Lipsman Service Award.

Sandra R. Brown represents high-net-worth individuals and businesses in a broad range of civil and criminal tax investigations. Chambers reports that “She is a very good attorney. She is knowledgeable, technical and knows her stuff.” “Sandra Brown is exceptional. She has a wealth of experience she is really clever and a very good strategist. I would happily refer a case to her.”

In more than 30 years as a tax litigator, Ms. Brown has a vast depth of experience in complex civil and criminal tax matters, having personally handled over 2,000 cases before the United States District Courts, the Ninth Circuit Court of Appeals, the United States Bankruptcy Court, the United States Bankruptcy Appellate Panel and the California Superior Court.  Those cases included nationally significant civil tax cases such as two Supreme Court decisions and a multitude of published 9th Circuit decisions. Ms. Brown received her LL.M. in Taxation from the University of Denver, served as the Acting U.S. Attorney for the Central District of California, Chief of the Tax Division, and, in 2021, was named a Top Women Lawyer in California.

HOCHMAN SALKIN TOSCHER PEREZ P.C., enjoys an unparalleled reputation for excellence and integrity in the tax community. For more than 60 years, the firm has been serving clients throughout the United States with federal and state civil tax litigation, defense of criminal tax prosecutions, and tax disputes with the federal, state and local taxing authorities. More information about the firm and our attorneys is available at https://www.taxlitigator.com/

We are pleased to announce that Steven Toscher and Evan Davis will be speaking at the upcoming CalCPA webinar “Defending Civil Fraud Case in light of the new IRS Office of Civil Fraud 2023,“ Tuesday, June 13, 2023, 9:00 a.m. – 10:00 a.m. (PST).

In September 2020, the IRS created the Office of Fraud Enforcement (OFE) to improve fraud detection and development of fraud cases to address areas of high fraud and risks noncompliance with the tax laws. With this new office, the IRS emphasized its focus on case selection when determining to pursue civil fraud penalties and the appropriate cases to refer to IRS-Criminal Investigation (CI). With an $60 billion budget over the next ten years and a focus on hiring and enforcement and the IRS’s increased ability to analyze data, the increased attention to non-compliance taxpayers is almost certain. This program’s learning objections will help you better recognize what may be a sensitive audit and when intrusive demands for evidence and your client’s interview, an often “touchy issue” may signal issues beyond a tax deficiency.  

Click Here for More Information

The FTB issued Notice 2023-02 (Notice) on May 31, 2023 providing taxpayers a time-limited opportunity to resolve tax matters relating to potentially abusive Micro-captive Insurance (MCI) and Syndicated Conservation Easement (SCE) Transactions in return for zero or reduced penalties.  

Click Here for Full Article

We are very pleased to announce that on May 18, 2023, following the success of the firm’s participation in the Taxation Section of the California Lawyers Association’s “DC Delegation,” the following principals and associates of Hochman Salkin Toscher Perez P.C. were sworn in as members of the Supreme Court of the United States by Chief Justice John Roberts. 

Principals

Sandra R. Brown

Michel Stein

Associates

Garabed “Gary” Markarian

Philipp Behrendt

Chief Justice Roberts was joined by all eight Associate Justices for the swearing in ceremony. Also in attendance in the courtroom was retired Associate Justice Stephen Breyer.

Prior to the Supreme Court swearing in ceremony, our firm, represented by Sandra Brown, Michel Stein, Gary Markarian, Philipp Behrendt, along with Robert Horwitz, Edward Robbins and Michael Greenwade, met with government officials from the Department of Treasury, Internal Revenue Service, Department of Justice Tax Division, Joint Committee on Taxation, House Ways and Means and the Senate Finance as part of the “DC Delegation” and presented three separate papers all of which focused on advocating for improvements in various aspects of federal tax administration, including partnership audits, “safe harbor” penalty relief for appraisers and due process changes to the IRS’s assertion of certain foreign penalties. Additionally, several of our attorneys were invited to orally contribute to presentations by other members of the Tax Section which were focused on FATCA loopholes and digital asset “ponzi scheme” losses.  

Judicial Jurisdiction for Assessable and Foreign Information Penalties

IRC Section 6695A Appraiser Penalties

BBA Imputed Underpayment Abuse of Discretion

A special thanks to Annette Nellen, Tiffany Creswell, Adria Price, Natascha Fasteabend, Myriam Bouaziz, Jaclyn Zumaeta, and Troy Van Dongen, who, on behalf of the Taxation Section of the California Lawyers Association, made the 2023 “DC Delegation” not only possible, but a huge success. 

Please join us in congratulating our colleagues in their membership before the highest court in the United States and their presentations as part of the “DC Delegation.” 

We are pleased to announce that Dennis Perez, Robert Horwitz and Jonathan Kalinski will be speaking at the upcoming CPA Academy webinar “Resolving Employment Tax Disputes,“ Tuesday, June 6, 2023, 2:00 p.m. – 3:00 p.m. (PST).

The IRS is increasing civil and criminal enforcement against taxpayers who fail to comply with withholding and remitting of employment taxes. Noncompliance can cause heavy penalties and interest against taxpayers that could destabilize a company and its operations. Tax professionals and advisers must grasp a complete understanding of tax rules and available techniques to avoid or minimize tax assessments and penalties. This webinar will guide tax professionals and advisers on critical issues relating to employment taxes.

Click Here for More Information

An amendment to the U.S. Sentencing Guidelines Manual that takes effect November 1 will include a new two-level reduction for true first offenders having their first contact with the criminal justice system. The amendment, subject to certain exceptions, will apply to offenders with no criminal history points, including offenders with no prior convictions. In adopting this definition of “zero-point offenders,” the Commission opted to hew to the long-standing and carefully crafted criminal history rules set forth in Chapter Four, regarding which prior convictions count for criminal history purposes and which do not. Notably, this reduction in likely to be in play for those charge with certain white collar crimes, including criminal tax violations. 

Click Here for Article

Sandra R. Brown is a Principal at Hochman Salkin Toscher Perez P.C., and former Acting United States Attorney, First Assistant United States Attorney, and the Chief of the Tax Division of the Office of the U.S. Attorney (C.D. Cal). Ms. Brown specializes in representing individuals and organizations who are involved in criminal tax investigations, including related grand jury matters, court litigation and appeals, as well as representing and advising taxpayers involved in complex and sophisticated civil tax controversies, including representing and advising taxpayers in sensitive-issue audits and administrative appeals, as well as civil litigation in federal, state and tax court.

I thought you would be interested in the following story from The Wall Street Journal.

Click Here for Link to the Article

Download the Wall Street Journal app here: WSJ.

Steven Toscher specializes in civil and criminal tax controversy and litigation. He is a Certified Tax Specialist in Taxation, the State Bar of California Board of Legal Specialization, a Fellow of the American College of Tax Counsel and has received an “AV” rating from Martindale Hubbell. In addition to his law practice, Mr. Toscher has served as an Adjunct Professor at the USC Marshall School of Business since 1995, where he teaches tax procedure. He has also served on the faculty of the American Bar Association Criminal Tax Fraud Program since 1998. He is a former Internal Revenue Agent with the Internal Revenue Service and a trial attorney with the Tax Division of the United States Department of Justice in Washington where he received its Outstanding Attorney Award.

We are pleased to invite you to register now for the

15th Annual NYU Tax Controversy Forum

to be held June 8 and 9

Westin New York, Times Square

You do not want to miss this program.

Two of our principals will be speaking on the following topics:

Sandra Brown

Employee Retention Credit Audits and Investigations

June 8

Steven Toscher

Recent Developments Affecting International Reporting Penalties

June 9

For 15 years, the NYU School of Professional Studies Tax Controversy Forum has brought together government representatives and expert private practitioners to share their perspectives on a variety of topics involving federal tax audits, appeals, and litigation. The forum covers a wide range of controversy work, from procedural seminars to substantive programs, international issues, ethical problems, current enforcement initiatives, sensitive audits, and civil and criminal tax penalties.

Click Here for More Information

We are also pleased to announce on June 7, 2023, Michel Stein will be speaking at the Agostino & Associates International and Domestic Tax Controversy Update at the Bergen Community College at the Meadowlands. BBQ to follow at The Green at Hackensack Court Square.

Click Here for the BBQ

Click Here for the BBQ Seminar