IRS Insights

September 2023

Read the latest tax rulings in our September edition of IRS Insights:

• Supreme Court to Hear Challenge to Section 965 transition tax
  
  • The Supreme Court has agreed to hear a constitutional challenge to the Section 965 transition tax. If the Supreme Court invalidates the Section 965 transition tax, taxpayers may be entitled to refund but only if they filed a protective refund claim before the applicable refund statute of limitations expired.

• IRS Offers Relief for Estimated Tax Payments for New Corporate Alternative Minimum Tax
  
  • In June 2023, the IRS announced penalty relief for corporations that did not pay estimated tax related to the new corporate alternative minimum tax (CAMT).

• District Court upholds IRS denial of charitable deduction as assignment of income and due to lack of sufficient contemporaneous written acknowledgement
  
  • In Keefer v. United States,¹ the district court granted partial summary judgment in favor of the government and held the Internal Revenue Service properly denied a charitable deduction stemming from the donation of a 4% limited partnership interest to a private foundation to establish a donor advised fund (“DAF”).

• Supreme Court Rules on Notice Required for Third-Party Bank Account Summons
  
  • Recently, the Supreme Court ruled that third-party account holders could not challenge an IRS bank account summons on the basis that the taxpayer did not have a legal interest or title in the account.²

• Court Holds that Signature Defects in a Claim for Refund Do Not Raise Jurisdictional Issues
  • In Lonnie Cooper v. United States,³ the taxpayer brought a refund suit to recover a late-filing penalty assessed in connection with his 2014 Form 1040, US Individual Income Tax Return. In deciding the case, the US Court of Federal Claims relied on binding precedent establishing that a signature verification defect on a refund claim does not raise jurisdictional issues.⁴

• US Tax Court Holds that IRS Assessment was Untimely Following Adequate Disclosure of Gift
  • In Ronald Schlapfer v. United States,⁵ the US Tax Court granted the taxpayer’s Cross-Motion for Summary Judgment and determined that the taxpayer substantially complied with the adequate disclosure requirements when he filed Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, for the 2006 tax year. As such, the three-year period of limitations to assess gift tax expired before the IRS issued its notice of deficiency.

¹ Keefer v. United States, No. 3:20-cv-0836, 2022 U.S. Dist. LEXIS 118271 (N.D. Tex. July 6, 2022).
² Polselli v. IRS, 143 S. Ct. 1231 (2023).
³ 165 Fed. Cl. 531 (2023).
⁴ 22 F.4th 1008 (Fed. Cir. 2022).
⁵ TC Memo 2023-65 (May 22, 2023).

Archive

May 2023
Recent Tax Court decision holds Form 5471 penalties are not immediately assessable by the IRS

March 2023
IRS proposes regulations regarding taxpayer access to Appeals

November 2022
Failure-to-file penalties apply when certain forms are paper file

August 2022
Tax Court reiterates rule that each tax year stands on its own

June 2022
Taxpayer refund suit dismissed for inability to prove timely mailing of refund claim

February 2022
Ninth Circuit adopts primary purpose test for determining whether attorney-client privilege applies to dual-purpose communications

October 2021
The IRS issued Notice 2021-39, announcing transition relief for Schedules K-2 and K-3 filers for taxable years beginning in 2021.

July 2021
In Crandall v. Commissioner of Internal Revenue, the Tax Court addressed a question about the scope and effect of a closing agreement signed between the taxpayers and the IRS

April 2021
Court holds that Section 6676 erroneous refund penalty does not apply in Exxon Mobil Corp. v. United States

January 2021
Nonresident USVI taxpayer “filing” under Section 6501(a)

November 2020
Federal Claims Court Rules on Failure to Meet Reasonable Cause in Payroll Tax Obligations

September 2020
IRS Request Comments on Revenue Procedure 94-59

July 2020
CCA Memo on Meaning of “Attributable To” in 6511(d)(2)

May 2020
IRS issues Rev. Proc. 2020-23 to allow BBA partnerships to utilize relief provisions provided in the CARES Act

March 2020
Tax Court Tentatively Disallows Conservation Easement Deduction Due to Omitted Required Basis Information