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Bona fide loan

Advances to new employee weren’t bona fide loans for bad debt deduction purposes

Advances to new employee weren’t bona fide loans for bad debt deduction purposes

Dickinson, TC Memo 2014-136 The Tax Court has found that a taxpayer who advanced funds to a new employee wasn’t entitled to deduct as a business bad debt either the funds that he knowingly advanced or the funds that the employee misappropriated from the business. The Court agreed with IRS that the taxpayer failed to […]

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Bad debt deductions denied; loans weren’t bona fide

Bad debt deductions denied; loans weren’t bona fide

In DF Systems, Incorporated v. Commissioner, (CA 5 12/10/2013) 112 AFTR 2d ¶ 2013-5647, the Court of Appeals for the Fifth Circuit has held that the Tax Court properly denied a taxpayer’s claimed bad debt deductions because the advances upon which the deductions were based did not constitute bona fide loans. Background. Business bad debts […]

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Increases in borrowing from lender made alleged interest payments nondeductible

Increases in borrowing from lender made alleged interest payments nondeductible

In Chief Counsel Advice (CCA) 2013-34037, IRS has concluded that amounts that a corporate taxpayer paid to its foreign parent were not deductible as interest where the taxpayer, in effect, borrowed from its parent to make those payments. Facts. Throughout the years at issue, Taxpayer maintained a general account into which it deposited amounts derived […]

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Where loan forgiveness depends on job creation, income is deferred under all-events test, per Chief Counsel Memo 2012-2014

Where loan forgiveness depends on job creation, income is deferred under all-events test, per Chief Counsel Memo 2012-2014

A Chief Counsel Memo (CCM) 2012-2014, concludes that an advance from a state to a company that was partially or completely cancellable depending on how many jobs the company was a bona fide loan rather than a prepayment for services to be rendered (i.e., job creation). The company could defer reporting income from any loan […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney