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Legal Advice

Taxpayer had to compute depletion allowance under two separate methods

Taxpayer had to compute depletion allowance under two separate methods

Legal Advice Issued by Field Attorneys 20161401F In a redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that where a taxpayer that mined minerals and used some of its mined mineral to manufacture certain products, it had to perform two Code Sec. 613 percentage depletion allowance calculations: one for the mineral it […]

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“Bad boy” carve-outs don’t automatically end treatment as nonrecourse liability

“Bad boy” carve-outs don’t automatically end treatment as nonrecourse liability

Legal Advice Issued by Associate Chief Counsel 2016-001 Legal Advice Issued by Associate Chief Counsel, “Nonrecourse Carve-Out” Guarantee of a Partnership Liability. In Legal Advice Issued by Associate Chief Counsel, IRS — reversing its previous position — has concluded that if a partner’s guarantee of a partnership’s nonrecourse obligation is conditioned on the occurrence of […]

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Field Advice – No partnership existed for tax purposes because there was no risk of loss or chance of gain

Field Advice – No partnership existed for tax purposes because there was no risk of loss or chance of gain

Legal Advice Issued by Field Attorneys 20161101F In a highly redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that a taxpayer’s investment in an arrangement which was to provide it with Code Sec. 45 refined coal production tax credits wasn’t a bona fide partnership. The purported partner did not engage in a […]

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IRS memo shows potential pitfalls in calculation of structural component disposition loss

IRS memo shows potential pitfalls in calculation of structural component disposition loss

Legal Advice Issued by Field Attorneys 20154601F In Legal Advice for Field Attorneys (LAFA), IRS has pointed out errors in a taxpayer’s calculation of the amount of loss it should be able to take with respect to structural component dispositions (SCDs). Background. Final Code Sec. 168 regs issued in 2014 apply to tax years beginning on […]

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Settlement payment to ward off foreign bribery charges isn’t deductible as business expense

Settlement payment to ward off foreign bribery charges isn’t deductible as business expense

  Legal Advice Issued by Field Attorneys 20154702F In Legal Advice Issued by Field Attorneys (LAFA), IRS concluded that Code Sec. 162(f) barred a business deduction for a settlement payment made to a foreign government to ward off bribery charges. The fact that the taxpayer’s business reputation may have been protected by the payment was […]

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Internal IRS guidance provides insight on reasonable compensation and R&E

Internal IRS guidance provides insight on reasonable compensation and R&E

Legal Advice Issued by Field Attorneys 20154501F In Legal Advice Issued by Field Attorneys (LAFA), IRS highlights significant case law and other considerations it finds instructive in applying the reasonable compensation test under Code Sec. 162, determining what constitutes research or experimental (R&E) expenditures for purposes of the credit for increasing research activities, and applying […]

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IRS rejects bifurcation of CFC income between sales and services for subpart F purposes

IRS rejects bifurcation of CFC income between sales and services for subpart F purposes

Legal Advice Issued by Field Attorneys 20153301F In a heavily redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has characterized the entire amount of an intercompany referral fee derived by certain controlled foreign corporations (CFCs) as subpart F income—specifically, foreign base company sales income.It held that the taxpayer erred in treating any portion of […]

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Multiple poker tournament buy-ins weren’t identical wagers for purposes of withholding rules

Multiple poker tournament buy-ins weren’t identical wagers for purposes of withholding rules

Legal Advice Issued by Field Attorneys 20153601F In Legal Advice Issued by Field Attorneys, IRS has held that, where a poker tournament had an initial buy-in amount in order to participate, and also allowed players who lost all their initial buy-in chips to buy in a second, third, etc. time, multiple buy-ins were not “identical […]

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No deduction for partially worthless debts where charge-off requirement not met

No deduction for partially worthless debts where charge-off requirement not met

Legal Advice Issued by Field Attorneys 20153501F In Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that a taxpayer couldn’t deduct partially worthless debts because it failed to charge off the amounts on its books during the tax year.Click here for Legal Advice Issued by Field Attorneys 20153501F. Background. A deduction is allowed for […]

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Failure to adequately describe gifts allowed IRS to assess gift tax at any time

Failure to adequately describe gifts allowed IRS to assess gift tax at any time

Legal Advice Issued by Field Attorneys 20152201F Background on gift tax limitations period. The Code imposes a tax on a transfer of property by gift. (Code Sec. 2501(a)) In general, any individual who makes a transfer by gift in any calendar year must file a gift tax return for that year using Form 709, United States […]

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Cost of services provided to taxpayer’s joint venture was capital contribution

Cost of services provided to taxpayer’s joint venture was capital contribution

Legal Advice Issued by Field Attorneys 20153101F In Legal Advice Issued by Field Attorneys, IRS has concluded that the cost of services that a taxpayer incurred on behalf of a joint venture in which it was a participant, was a capital contribution to the joint venture and a deductible expense of the joint venture. Background. Code […]

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LIFO recapture applies to a Qsub election for C corporations

LIFO recapture applies to a Qsub election for C corporations

Legal Advice Issued by Field Attorneys 20153001F In Legal Advice Issued by Field Attorneys (LAFA), IRS has untangled the last-in, first-out (LIFO) recapture consequences resulting from the C corporation parent of a consolidated group merging with an S corporation’s subsidiary, followed by that S corporation electing to treat the parent’s consolidated group as qualified subchapter […]

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Obligation to indemnify mortgage buyers wasn’t a security under mark-to-market rules

Obligation to indemnify mortgage buyers wasn’t a security under mark-to-market rules

Chief Counsel Advice 201529006 In Chief Counsel Advice (CCA), IRS has concluded that a mortgage originator/seller who was obligated to indemnify purchasers in the event of mortgage defects, couldn’t claim mark-to-market losses with respect to the obligation because it wasn’t a security under the mark-to-market rules. Background. A securities dealer is generally required by Code Sec. […]

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IRS sheds light on when incoming and outgoing FATCA information becomes confidential

IRS sheds light on when incoming and outgoing FATCA information becomes confidential

Legal Advice Issued by Associate Chief Counsel 2015-005 In a redacted Legal Advice Issued by Associate Chief Counsel, IRS has given its opinion on the exact moment when information that it provides to, and information it receives from, foreign tax authorities and other parties pursuant to the Foreign Account Tax Compliance Act (FATCA), becomes protected […]

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Grain sales by cooperative’s partnership didn’t result in per-unit-retain-paid-in-money

Grain sales by cooperative’s partnership didn’t result in per-unit-retain-paid-in-money

Legal Advice Issued by Field Attorneys 20150801F In a redacted Legal Advice issued by Field Attorneys (LAFA), IRS has concluded that a cooperative that was a partner in a partnership that wasn’t itself a cooperative couldn’t treat the partnership’s grain purchases as the cooperative’s per-unit-retain-paid-in-money (PURPIM) under Code Sec. 1388(f). Further, the cooperative couldn’t re-characterize […]

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Determining if CFC’s Foreign Sales Branch is Treated as Separate Corporation

Determining if CFC’s Foreign Sales Branch is Treated as Separate Corporation

Legal Advice Issued by Associate Chief Counsel 2015-002   In a generic legal advice memorandum, the Associate Chief Counsel (International) has illustrated the proper application of Code Sec. 954(d)(2), which provides special rules for the treatment of a foreign branch of a controlled foreign corporation (CFC). As illustrated in the memorandum, the foreign sales branch […]

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IRS could rely on corporation’s consent to extend the statute of limitations despite errors

IRS could rely on corporation’s consent to extend the statute of limitations despite errors

Legal Advice Issued by Field Attorneys 20152301F Click here for Legal Advice Issued by Field Attorneys 20152301F. A heavily redacted Legal Advice Issued by Field Attorneys (LAFA) has concluded that IRS could rely upon a consent to extend the statute of limitations on assessment signed pursuant to a power of attorney (POA) executed by the […]

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IRS addresses tax treatment of intangible property transfers

IRS addresses tax treatment of intangible property transfers

Legal Advice Issued by Field Attorneys 20151701F In a heavily redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has addressed the tax treatment, under Code Sec. 382 and Code Sec. 482, of a domestic corporation’s transfer of intangible property (IP) to a foreign subsidiary. The LAFA concluded that whether the IP transfer should be […]

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Determining if CFC’s foreign sales branch is treated as separate corporation

Determining if CFC’s foreign sales branch is treated as separate corporation

Legal Advice Issued by Associate Chief Counsel 2015-002 In a generic legal advice memorandum, the Associate Chief Counsel (International) has illustrated the proper application of Code Sec. 954(d)(2), which provides special rules for the treatment of a foreign branch of a controlled foreign corporation (CFC). As illustrated in the memorandum, the foreign sales branch of […]

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Whether payments under cost sharing arrangement qualify as recognized built-in loss

Whether payments under cost sharing arrangement qualify as recognized built-in loss

Legal Advice Issued by Field Attorneys 20151702F In a heavily redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that a corporation failed to establish that its receipt of an advance lease payment from its wholly owned foreign subsidiary in a platform contribution transaction (PCT), in the first year of the recognition period […]

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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