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Settlement

Tax Court – gift tax return filed as part of settlement can’t escape late payment interest rules

Tax Court – gift tax return filed as part of settlement can’t escape late payment interest rules

Estate of La Sala, TC Memo 2016-42 The Tax Court has held that an estate’s agreement to file a gift tax return and pay the gift tax due with that return, as part of a settlement with IRS that reduced IRS’s proposed estate tax deficiency, did not prevent late payment interest from accruing with respect […]

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Settlement of fraudulent conveyance claim wasn’t deductible

Settlement of fraudulent conveyance claim wasn’t deductible

Chief Counsel Advice 201552028 In Chief Counsel Advice (CCA), IRS has concluded that amounts paid by a company in settlement of a fraudulent conveyance claim didn’t qualify as deductible trade or business expenses under Code Sec. 162 and had to be capitalized under Reg. § 1.263(a)-2(e)(1) as amounts paid to defend or perfect title to […]

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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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Court of Appeals 7th Circuit affirms: informant’s award under False Claims Act is ordinary income

Court of Appeals 7th Circuit affirms: informant’s award under False Claims Act is ordinary income

Patrick v. Comm., (CA 7 8/26/2015) 116 AFTR 2d ¶2015-5180 The Court of Appeals for the Seventh Circuit, affirming the Tax Court, has ruled that nearly $7 million received by an informant as a result of his bringing two qui tam actions under the False Claims Act (FCA) was taxable as ordinary income.The Seventh Circuit […]

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Court of Appeals holds Tax Court erred when it required taxpayer to accept settlement terms

Court of Appeals holds Tax Court erred when it required taxpayer to accept settlement terms

Shah, (CA 7 6/24/2015) 115 AFTR 2d ¶ 2015-856 The Court of Appeals for the Seventh Circuit has vacated a Tax Court order that required a taxpayer to accept terms of a settlement agreement with IRS where the taxpayer never agreed to many of those terms and the Tax Court said that he wasn’t being […]

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Fund Which Aggregates Amounts Deposited With a Court is a Designated Settlement Fund

Fund Which Aggregates Amounts Deposited With a Court is a Designated Settlement Fund

Chief Counsel Advice 201450019   In Chief Counsel Advice (CCA), IRS has concluded that a fund in which a court aggregated cash deposited by litigants as directed by court orders, pending the resolution of litigation, was a disputed ownership fund (DOF) taxed as a designated settlement fund and thus was subject to current income tax. […]

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Settlement in malpractice suit against tax preparers wasn’t includible in the taxpayers’ income

Settlement in malpractice suit against tax preparers wasn’t includible in the taxpayers’ income

Cosentino, TC Memo 2014-186 The Tax Court has concluded that the settlement in a malpractice suit that taxpayers received with regard to accountants who advised them to use a tax-avoidance plan to dispose of rental property was, for the most part, not includible in income. The amount represented a nontaxable replacement of capital. But for […]

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SB/SE memo provides guidance on Fast Track Settlement program

SB/SE memo provides guidance on Fast Track Settlement program

Click here for SBSE-04-0414-0010, Interim Guidance for Small Business/Self-Employed Fast Track Settlement, Technical Procedures and Guidelines. IRS’s Small Business/Self-Employed (SB/SE) Division has issued a memo providing interim guidance on the SB/SE Fast Track Settlement (FTS) program.Among other things, the memo covers eligibility for the program, how to apply, the roles and responsibilities of SB/SE during […]

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Settlement payment wasn’t penalty but was compensatory and hence deductible per Chief Counsel Advice 2013-08027

Settlement payment wasn’t penalty but was compensatory and hence deductible per Chief Counsel Advice 2013-08027

In a highly redacted Chief Counsel Advice (CCA), 2013-08027, IRS has concluded that a taxpayer’s payment under an agreement in satisfaction of claims against it by the State Attorney General wasn’t a nondeductible penalty under Code Sec. 162(f). Rather it was compensatory and hence a deductible business expense. Background. Under Code Sec. 162(a), a taxpayer […]

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Switzerland, U.S. consider solution to tax dispute

Switzerland, U.S. consider solution to tax dispute

As reported in the news in Reuters, “Switzerland, U.S. Consider Solution to Tax Dispute,” several interested folks will be taking careful note of the ongoing talks between the respective governments.    The Swiss and U.S. governments are considering a possible solution to a long-running dispute over Swiss banks accused of helping wealthy Americans evade billions of […]

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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