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Large Business & International Division

LB&I sheds light on when power generation property is considered “replaced” for 263(a) purposes

LB&I sheds light on when power generation property is considered “replaced” for 263(a) purposes

A recently released memorandum to all employees at IRS’s Large Business and International (LB&I) Division provides guidance to IRS examiners on how to determine when a major component pertaining to steam or electric generation property has been replaced under Reg. § 1.263(a)-3(k). The memo generally provides that a major component is considered to be replaced, […]

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IRS directs its auditors regarding treatment of cable operator network assets

IRS directs its auditors regarding treatment of cable operator network assets

IRS’s Large Business & International Division (LB&I) has issued instructions to its auditors on how to apply Rev Proc 2015-12, 2015-2 IRB 265, which provides several safe harbor accounting methods for property costs paid or incurred by cable system operators. LB&I has also provided instructions to auditors on how to handle audits of cable companies […]

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IRS says U.S. corporate tax audits down sharply after budget cuts

IRS says U.S. corporate tax audits down sharply after budget cuts

NEW YORK (Reuters) – Federal tax audits for U.S. businesses were down 6 percent in the last fiscal year, ended on Sept. 30, falling to their lowest level in eight years as the Internal Revenue Service faced budget cutbacks and a decline in enforcement staff, IRS Commissioner John Koskinen said in a statement on Monday. […]

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LB&I directive provides guidance to utilities on allocation of mixed service costs

Click here for LB&I-LB71-04-0814-007, “Allocating Mixed Service Costs Under I.R.C. Section 263A to Certain Self-Constructed Property of Electric and Natural Gas Utilities.” [Link Omitted] In a directive, IRS’s Large Business & International (LB&I) Division has provided guidance to examiners on determining whether a taxpayer’s method for allocating mixed service costs to certain self-constructed tangible personal […]

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Transmission & distribution property safe harbor accounting method rule extended

Transmission & distribution property safe harbor accounting method rule extended

Click here for LB&I Memo 04-0814-006, “Extending Transition Rules and the Scope Limitation Waiver for Taxpayers Adopting the Safe Harbor Method of Accounting for Electric Transmission and Distribution Property.” IRS’s Large Business & International (LB&I) Division has issued a memo that provides direction to the field as to whether a taxpayer who is subject to […]

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IRS won’t audit insurance co.’s hedging of variable annuity with guaranteed minimum benefits

IRS won’t audit insurance co.’s hedging of variable annuity with guaranteed minimum benefits

Click here for LB&I’s “I.R.C. §446: LB&I Directive Related to Hedging of Variable Annuity Guaranteed Minimum Benefits by Insurance Companies.” IRS’s Large Business & International Division has issued a Directive that directs its examiners not to challenge the accounting method for eligible guaranteed minimum benefit hedges, if certain conditions are met, for variable annuity contracts […]

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New LB&I directive clarifies information document request procedures

New LB&I directive clarifies information document request procedures

IRS’s Large Business and International division (LB&I) has issued an updated directive on the requirements for issuing and enforcing information document requests (IDRs). Among other things, the new directive states that examiners and specialists have discretion, as warranted by the circumstances, to grant an extension to taxpayers who either fail to respond to an IDR […]

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IRS liberalizes audit safe harbor for certain business acquisition fees

IRS liberalizes audit safe harbor for certain business acquisition fees

IRS’s Large Business & International (LB&I) division has updated a directive in which it instructed its examiners not to challenge taxpayers’ treatment of eligible milestone payments made or incurred in the course of a covered transaction under Reg. § 1.263(a)-5(e)(3) with respect to which the taxpayer incurs a success-based fee. The update liberalizes the definition […]

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New IRS information document request enforcement procedures delayed

New IRS information document request enforcement procedures delayed

IRS’s Large Business and International Division (LB&I) has indicated that a new IRS enforcement process applicable when taxpayers do not timely respond to an auditor’s information document request (IDR) will be delayed until Mar. 3, 2014.  We previously blogged on the new procedure in “IRS Creates New Information Document Request Enforcement Procedures.” Background. As part […]

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Hand over tax audit information, clock is running – U.S. IRS

Hand over tax audit information, clock is running – U.S. IRS

Hand over tax audit information, clock is running – U.S. IRS.  WASHINGTON (Reuters) – The U.S. Internal Revenue Service audit, already a feared ordeal, will get even sharper teeth in January when the IRS will start setting strict deadlines for delivery of information it wants from companies and wealthy people it is auditing. No such […]

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IRS Creates New Information Document Request Enforcement Procedures

IRS Creates New Information Document Request Enforcement Procedures

IRS’s Large Business and International Division (LB&I) has published guidance that it has provided to its auditors on a new enforcement process that applies when a taxpayer does not timely respond to the auditor’s information document request (IDR). Click here for the text of IRS’s LB&I-04-1113-009, “Large Business and International Directive on Information Document Request […]

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Tax Court denies life insurance company benefits from SILO & LILO transactions

Tax Court denies life insurance company benefits from SILO & LILO transactions

In a voluminous opinion, the Tax Court in John Hancock Life Insurance Company, etc., et al., v. Commissioner, (2013) 141 T.C. 1, has denied a life insurance company various deductions and tax benefits claimed in association with lease-in-lease-out (LILO) and sale-in-lease-out (SILO) transactions. After analyzing a number of test transactions, the Court found that the […]

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Court compels disclosure of some purported tax shelter documents, protects others

Court compels disclosure of some purported tax shelter documents, protects others

In Santander Holdings USA, Inc. & Subsidiaries, v. United States of America, United States District Court (D. Massachusetts), Civil Action No. -09-11043- GAO, concerning documents pertaining to a purported tax shelter, a district court has found that the work product doctrine did not protect against disclosure of tax reserve work papers, and that the tax […]

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Australian Prime Minister campaigns to sell unpopular carbon tax

Australian Prime Minister campaigns to sell unpopular carbon tax

As reported in Reuters, Australian Prime Minister Julia Gillard began an election-style campaign on Monday to promote a tax on carbon emissions, with her political survival hanging on a program highly unpopular with both industry and voters. Gillard’s poll rating remains near record lows and some 2,000 protesters denounced the tax when they marched through […]

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ScottishPower Wins Against IRS Over $932 Million in Deductions

ScottishPower Wins Against IRS Over $932 Million in Deductions

As reported in Bloomberg news, “ScottishPower Wins Against IRS Over $932 Million in Deductions” per the decision issued on June 19, 2012, by Judge Kroupa of the U.S. Tax Court.  It looks like Scottish Power will be celebrating their victory. ScottishPower Plc defeated the Internal Revenue Services’s bid in U.S. Tax Court to disallow more […]

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IRS News: Who’s eligible for domestic production deduction in contract manufacturing situations?

IRS News:  Who’s eligible for domestic production deduction in contract manufacturing situations?

Who’s eligible for domestic production deduction in contract manufacturing situations?  LB&I Directive “Guidance for Examiners on IRC § 199 Benefits and Burdens of Ownership Analysis in Contract Manufacturing Arrangements” IRS’s Large Business & International Division recently issued guidance for examiners seeking to determine which taxpayer in a contract manufacturing situation has the benefits and burdens […]

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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