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What Is The United States Tax Court And What Happens When The Tax Court Hears A Case?

The United States Tax Court is a federal trial court established by Congress under Article I of the U.S. Constitution, section 8. The Tax Court specializes in adjudicating disputes over federal income tax, generally prior to the time at which formal tax assessments are made by the Internal Revenue Service. The U.S. Tax Court is not an agency of, and is independent of, the executive branch. The U.S. Tax Court is the only forum in which taxpayers may file a case without having first paid the disputed tax in full. Tax Court judges are appointed for a term of 15 years, subject to presidential removal for actions related to neglect, inefficiency, or malfeasance.

Marvel Entertainment And Cancellation Of Indebtedness Income

Issue

Under the tax code, when cancellation of indebtedness income excluded from gross income results in a reduction of combined net operating losses, and a business entity can carry forward this reduction to offset income in following tax years, must this net operating loss be reduced at the combined entity level or at the individual entity level?

Related Tax Rules And RegulationsMarvel Entertainment And Cancellation Of Indebtedness Income

Internal Revenue Code Section 108

Facts

Should Donald J. Trump Release His Tax Returns?

In this most interesting presidential election primary season, many different issues have dominated the news.  Perhaps no candidate has dominated the airwaves more than Donald J. Trump, the leading candidate in the Republican primaries.   Unsurprisingly, Mr. Trump has made a number of controversial statements, antagonizing a variety of groups and countries alike.  It is no surprise then that Trump is again in the center of the latest controversy – the release of his tax returns.

Congratulations on your New Home Purchase…Oops! You’re liable for Seller’s Taxes!

Congratulations on your New Home Purchase…Oops!  You’re liable for Seller’s Taxes!

 

As a buyer, no more rude shock can intrude on your new home celebration than finding out you are liable for Seller’s taxes.  Understandably, by the time of your closing, you may have nearly depleted your bank account, paying the purchase price plus the myriad fees and charges for your new home.  When the IRS comes calling soon afterwards, asking you to also pay Seller’s taxes, you can be excused for being very astonished.  Yes, this can happen; this scenario is not as far-fetched as it may sound.

Negligence or Tax Fraud? What is “Negligent” and What Is “Willful” Conduct to the IRS?

What does the IRS consider to be negligent or non-wilful conduct when it comes to tax-related activity like filing income tax returns and making deductions? What does it consider wilful conduct? When is such activity tax fraud?

Tax fraud is a general term which is defined as taxpayer’s intent to defraud the government by not paying taxes that the taxpayer knows are lawfully due. Tax fraud can be punishable either civilly, criminally, or both. Under federal law, civil violations are primarily located in Title 26 and criminal violations mainly in Title 18, respectively, of the United States Code (“U.S.C.”).

Is there a business deduction for expenses incurred in marijuana related enterprises?

Issue

Is there a business deduction for expenses incurred in marijuana related enterprises?Is there a business deduction for expenses incurred in marijuana related enterprises?

Related Tax Rules or Regulations

Internal Revenue Code Section 61

Internal Revenue Code Section 280E

Prior to 1982, an illegal business was able to reduce its revenue by the cost of any product it sold (Cost of Goods Sold, or COGS), as well as other ordinary and necessary general and administrative (G&A) business expenses like rent, packaging, utilities, travel expenses, and even the cost of a small scale used to weigh the controlled substances sold by the taxpayer. In 1982, the IRS enacted Section 280E which dictated that businesses that trafficked in controlled substances, as defined by the Controlled Substance Act, could no longer deduct its expenses.

Do The Monies Or Amounts Received By An Egg Donor In Exchange For Her Eggs Constitute Taxable Income?

Issue

Do the monies or amounts received by an egg donor in exchange for her eggs constitute taxable income?

Related Tax Rules or Regulations

Internal Revenue Code Section 61 provides that gross income includes all income from whatever sources derived, including compensation for services.

Internal Revenue Code Section 104(a)(2) excludes from taxable income the amount of any damages (other than punitive damages) received on account of personal injuries or physical sickness.

Income Tax Regs sec. 1.104-1(c)(1) defines the term “damages” as “an amount received (other than workers’ compensation” through prosecution of a legal suit or action, or through a settlement agreement entered into in lieu of prosecution.”

HOW MUCH OF MY MORTGAGE CAN I REALLY DEDUCT?

What can taxpayers deduct from their mortgage payments? What portion of a payment consisting of principal, interest, taxes and insurance, if any, is deductible? To deduct the expenses of owning a home, at least those costs paid in your mortgage payment, taxpayers must first itemize deductions.

Simply put, interest paid on a mortgage is tax deductible. Points that are paid to lower the interest rate are also deductible. Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible. If the loan is not a secured debt on your home, it is considered a personal loan, and the interest you pay generally isn’t deductible.

OWE THE IRS? YOU MAY LOSE YOUR PASSPORT

The Internal Revenue Service, probably the most-hated government agency in America, just became more powerful, and probably more ominous.  As everyone knows, IRS is the only agency that can, without going to Court, seize your asses and empty your bank accounts – one of the reasons they earned the title of being the most feared agency.  Now, the IRS has been empowered to seize American passports of delinquent taxpayers, maybe even preventing those taxpayers from domestic flights.

TOP TEN TAX BREAKS FOR MILITARY PERSONNEL

The IRS has made available several tax breaks for military personnel, especially over the last few decades. For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. Some of these tax breaks are retroactive, and thus require the filing of an amended return by the affected taxpayer. Remember that if you away from home because of duty in the military, your spouse can use a power of attorney to file a joint return on your behalf. Here are ten tax breaks worth noting for military personnel.

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