A recent Tax Court decision underscores an increasingly rigorous examination of Section 831(b) microcaptive insurance arrangements.[1] This ruling may be insightful to taxpayers considering or currently operating microcaptives, has broad implications for businesses seeking legitimate tax incentives created by Congress. Overview of the Case The case at hand involves the Internal Revenue Service’s (“IRS”) rejection…
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With the filing deadline for individuals to file their income tax returns approaching and people becoming more acutely aware of how much in taxes they will pay for the last year, now, perhaps more than other times of the year, I receive comments from people about “starting an LLC to reduce taxes,” or “having expenses…
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We have previously written about the requirements to file a Report of Foreign Bank and Financial Accounts (“FBAR”) for foreign bank accounts held by US taxpayers pursuant to the Bank Secrecy Act.[1] In a recent case out of the United States District Court for the District of Idaho, the Court ruled that a decedent’s widow…
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Starting in 2002, and every year since, the IRS has published its list of the top tax scams that taxpayers should be aware of, known as the Dirty Dozen. Parker Durham and I have discussed the IRS’s Dirty Dozen list in prior years.[1] Recently, the IRS released its Dirty Dozen list for 2025.[2] While last…
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Common in estate and trust planning is the gift or sale of assets to an irrevocable grantor trust[1] structured to be outside of the grantor’s taxable estate.[2] Often, such gifts or sales are made of interests in family entities such as LLC’s.[3] These entities can provide significant non-tax benefits including consolidation of assets, centralized management,…
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In a recent Tax Court decision, the Court again approached the critical issues surrounding loss deductions and tax compliance.[1] This case involves Heather and Stewart Weston, a married couple from California, who claimed a $2.1 million loss deduction on their 2017 tax return tied to failed business ventures in Indiana. The Internal Revenue Service (“IRS”)…
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Litigation involving estates and trusts, while sometimes impossible to avoid, is usually exhausting to all parties involved, especially given that such litigation is often among family members and/or is following the death of a loved one. Alternative dispute resolution (“ADR”) is an alternative to traditional litigation, encompassing various methodologies, including mediation and arbitration, aimed at…
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We have written numerous articles over the years about substantiating deductions, whether they be charitable donations or business expenses or any other type of deduction.[1] As noted by the Supreme Court, deductions “are a matter of legislative grace, and taxpayers bear the burden of proving their entitlement to any deduction claimed.”[2] A recent Tax Court…
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Most U.S. citizens are familiar with the concept of filing an income tax return. As with any other work product, errors and omissions can occur in tax returns. Once a tax return has been filed, the taxpayer can generally only correct the return by filing an amended tax return. The IRS recently published a third-party…
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Treasury recently finalized regulations imposing significant reporting obligations on persons involved in what the regulations describe as “related party basis adjustment transactions.” These regulations designate such transactions as “transactions of interest,” a form of reportable transactions.[1] Reporting obligations can apply to transactions completed prior to the date of these regulations and also may extend many,…
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