TAXLITIGATOR – Tax Controversy (Civil & Criminal) Report

We are pleased to announce that Sandra Brown will be speaking at the upcoming Freeman webinar “FBAR: Current Legal Developments and Challenges,” Thursday, October 20, 2022, 1:10 p.m. – 2:00 p.m. (CST).

The Supreme Court has finally granted certiorari to look at the non-willful FBAR penalties imposed by the IRS. Originally enacted in the 1970s, the Bank Secrecy Act’s FBAR provisions have more recently become a prominent source of penalties associated with failures to report foreign accounts.  This panel of experts will discuss the FBAR and related penalty considerations, as well as caselaw development and the prospective challenges and potential implications of a Supreme Court decision in the area. 

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We are pleased to announce that Michel Stein and Sandra Brown will be speaking on the following topics at the upcoming 81st Institute on Federal Taxation being held at the Westin New York, October 23-28, 2022 and Hotel Del Coronado, November 13-18, 2022.

Sandra Brown
October 23, 2022 and November 13, 2022
“Tax Controversies”

Michel Stein
November 17, 2022
” When Are You Crossing a Line? Real Life Ethical Issues in Everyday Tax Practice”

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We are pleased to announce that Michel Stein , Robert Horwitz and Jonathan Kalinski will be speaking at the upcoming Strafford webinar “Partnership Audit Adjustments Under the Centralized Audit Regime,” Wednesday, October 19, 2022, 10:00 a.m. – 11:30 a.m. (PST).

This course will cover practical considerations for partners and advisers to partnerships operating under the new partnership audit regime. Our panel of experts will review the latest guidance, explain partnership audit adjustments, and recommend steps to implement this reporting regime.

IRS audits are taking place under the Bipartisan Budget Act’s new audit regime, and tax professionals are wrestling with the complexities of the new requirements. Under these rules, the partnership itself remits any underpayment resulting from an IRS examination at the end of an IRS review. It pays the additional tax due at the highest income tax rate (37 percent currently).

Alternatives include making a push-out election taxing the individual partners’ interests during the year examined and showing that partners have amended their returns to account for the adjustments. The Corrections Act in 2018 reduced the burden of filing amended returns by allowing partners to pay the amount of tax due and adjust any related tax attributes without the limitation of filing amended tax returns, the pull-in procedure.

The reporting regime includes Form 8986, Partner’s Share of Adjustments to Partnership-Related Items, and Form 8978, Partner’s Additional Reporting Year Tax. Partners receiving Form 8986 must file Form 8978 to report additional tax due as a result of examination adjustments. Multiple forms may be obtained, covering changes for different years, and these adjustments could be both negative and positive.

The rules are so complex that the AICPA recommended a new form AAR-EZ to simplify the reporting process.

Listen as our panel of experts explains the ins and outs of audits under BBA, including making push-out and pull-in adjustments, electing out, and best practices for handling the audit.

We are also pleased to announce that we will be able to offer a limited number of complimentary and reduced cost tickets for this program on a first come first serve basis. If you are interested in attending, please contact Sharon Tanaka at sht@taxlitigator.com. 

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We are pleased to let you know that the planning for the 38th Annual UCLA Extension Tax Controversy Institute is proceeding and we have an exceptional program lined up with top governmental officials and leading private practitioners from around the country. 

As you know the Institute is back in person this year after two years Covid/Zoom protocols and we are all excited to see old and new friends in person. 

Click Here to Register

We have had amazing sponsors of the program and we encourage those who have sponsored in the past to join us again and we always welcome new sponsors. Go to the following link for sponsorship information.

Click Here for Sponsorship Information

Now, for the Highlights –

• The Commissioner of Internal Revenue – Charles P. Rettig – will present a luncheon keynote on the state of Internal Revenue Service. 

• The Taxpayer Advocate – Erin Collins – will present a breakfast keynote on what the Taxpayer Advocate Service is doing to assist taxpayers and tax administration.  

• Darren J. Guillot – Deputy Commissioner, Operations and Collection, SB/SE – will present an afternoon keynote on “What IRS Collection Will Look Like Over the Next 10 Years”. 

In addition to these keynotes, we will hold the following panel presentations –

Employment Tax: Employee Retention Credits: “What’s Old Is New Again: IRS’s Renewed Focus on Employee

Tax Compliance Issues”

R&D Credits: “If You Build It, They Will Come…The Taxing Authorities Focus on R&D Credits”

How To Resolve Your Cases at IRS Appeals Including Cases Docketed Before the Tax Court

Crypto Compliance & Enforcement

Collection & Offer Specialist Panel & An IRS Campaign

BSA & F8300 Compliance

Criminal Tax Enforcement

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The U.S. Supreme Court said Monday it will consider a law firm’s bid to shield client communications from grand jury subpoenas seeking documents on its tax advice in a case concerning the scope of attorney-client privilege over mixed-use legal advice.

In a statement, Evan J. Davis of Hochman Salkin Toscher Perez PC, one of the firm’s representatives in
the case, told Law360 that the privilege issue at the center of the case “is really important beyond merely
tax – it impacts pretty much every area of the practice of the law.”

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Evan Davis, a veteran tax litigator with Hochman Salkin Toscher Perez PC, predicted that existing businesses, particularly limited liability companies, will find adhering to the beneficial ownership regs to be “a herculean task and will result in far less than 100% compliance.” He said many clients already fail to take the basic steps to maintain their LLCs in good standing and that the new reporting rules would only add to that burden. “Getting the word out to clients who don’t use CPAs and lawyers will also be a challenge,” Davis told Checkpoint.

Click Here for full article.

We are pleased to announce that Steven Toscher, Sandra Brown and Jonathan Kalinski will be speaking at the upcoming Strafford webinar “Handling Cannabis Tax Examinations: Sec. 280E, Audits, IRS Guidance,” Tuesday, October 11, 2022, 10:00 a.m. – 11:30 a.m. (PST).

The sale and distribution of cannabis for recreational or medical use is a powerful economic engine generating billions in annual revenue, with over 40 states and the District of Columbia having some form of legalization of the substance. Despite state relaxation of marijuana prohibition laws, without careful planning, regulated cannabis businesses can be subject to hefty tax assessments and penalties.

Under Section 61, all gross income must be reported from whatever source it is derived. However, under Section 280E, cannabis businesses cannot deduct rent, wages, and other expenses unless it is for the cost of goods sold (COGS), resulting in a substantially higher tax rate than other companies on their income. The IRS issued guidance to its agents on conducting audits of cannabis businesses giving IRS agents the authority to change a cannabis business’ accounting method. Under Section 280E, COGS does not include certain costs. Thus, they remain non-deductible for income tax purposes.

As more states legalize cannabis and make available licenses to grow, manufacture, distribute, and sell cannabis, the IRS has increased cannabis tax audits, which could result in unbearable tax liabilities.

Listen as our panel discusses federal and select state tax law provisions impacting cannabis businesses, critical items of focus by the IRS when examining cannabis operations, and tactics for managing audits.

We are also pleased to announce that we will be able to offer a limited number of complimentary and reduced cost tickets for this program on a first come first serve basis. If you are interested in attending, please contact Sharon Tanaka at sht@taxlitigator.com. 



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ROBERT HORWITZ

to receive the

JOANNE M. GARVEY AWARD

in recognition of His Outstanding Contributions in the Field of Tax Law

November 3, 2022

We are very pleased to announce that our friend and partner Robert Horwitz has been recognized for his outstanding contributions in the field of taxation by the California Lawyers Association 2022 Annual Meeting of the Tax Bar and Tax Policy Conference, November 2-4, 2022.

Robert has over 40 years of experience as a tax attorney specializing in the representation of clients in civil and criminal tax cases, including civil audits and appeals, tax collection matters, criminal investigations, administrative hearings and in civil and criminal trials and appeals in federal and state courts. He has served as a member of the Executive Committee of the Taxation Section of the State Bar of California and was Chair of the Taxation Section for 2015-2016 year. He was previously Chair of the Tax Procedure and Litigation Committee of the State Bar Taxation Section.

Sandra Brown, Evan Davis and Jonathan Kalinski will also be speaking on the following topics:

• Criminal Tax Bootcamp – How to Represent Clients in Criminal Tax Matters

• In re Grand Jury and the Impact on Dual-Purpose Attorney Client Privilege

• Responsible Persons Liability

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We are pleased to announce that Steven Toscher, Sandra Brown and Evan Davis will be speaking at the upcoming Spidell webinar “New Corporate Transparency Act: The World is Changing,” Friday, October 7, 2022, 10:00 a.m. – 12:00 p.m. (PST).

On January 1, 2021, Congress enacted the National Defense Authorization Act for Fiscal Year 2021 (NDAA). Contained within the NDAA is the Anti-Money Laundering Act of 2020 (the AMLA), which introduces extensive reforms to U.S. anti-money laundering (AML) and counter-terrorism financing (CFT) laws. Within the AML, Congress passed the Corporate Transparency Act (CTA). The CTA requires certain corporations and limited liability companies (reporting companies) to disclose beneficial owner information to FinCEN and update ownership information within one year of any changes. This new regulatory reporting regime will impact over 25 million existing business entities and millions of new entities each year. Without an awareness of and compliance with these new reporting obligations, noncompliance can result in civil and criminal liability. 

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The following are additional Spidell topics we will be speaking on throughout the rest of this year.

Form 8300 Reporting/Cash Intensive Business Audits

Handling Estate and Gift Tax Audits, including Hot Topics in Enforcement and Valuation

Cryptocurrency Tax Compliance in the

Post $50,000 Bitcoin World

We are pleased to announce that Dennis Perez, Sandra Brown and Cory Stigile will be speaking at the upcoming Spidell webinar “Research and Development Tax Credits: IRS Scrutiny of Qualified Research Activity and Related Expenses,” Thursday, September 29, 2022, 10:00 a.m. – 12:00 p.m. (PST).

Research and development (R&D) is the lifeblood of a growing and prosperous economy, and many businesses perform some type of research and development. IRC §41 creates incentives for increased R&D activities in the form of tax credits for companies involved in qualified research activities. Businesses that consider R&D tax credits soon learn, however, that the potential benefits may come at a price. This program’s learning objectives include understanding how to navigate IRC § 41’s abundant and changing requirements and challenges, as well as the changes under the Inflation Reduction Act and the Internal Revenue Service’s increased focus on potential abuses of the R&D tax credit. Taxpayers and their tax advisors need to be prepared even when they are merely taking advantage of a tax benefit to which they are entitled. More easily identify key strategies to minimize exposure from IRS examinations of R&D credits

Click Here for more information.

The following are additional Spidell topics we will be speaking on throughout the rest of this year.

New Corporate Transparency Act:

The World is Changing

Form 8300 Reporting/Cash Intensive Business Audits

Handling Estate and Gift Tax Audits, including Hot Topics in Enforcement and Valuation

Cryptocurrency Tax Compliance in the

Post $50,000 Bitcoin World