***This article is a follow-up to a prior article from 2019 which can be found here. Life insurance is a great tool that can serve a variety of purposes. Most often, it is thought of as an income replacement/hedge against premature death to provide for one’s family, and it is certainly a great tool to…
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In a recent Chief Counsel Advice (“CCA”) issued by the IRS, the IRS concluded that the taxpayer’s sale of stock did not qualify for the gain exclusion as Qualified Small Business Stock (“QSBS”) under Section 1202 since the business of the corporation was akin to brokerage services.[1] The IRS concluded that the corporation’s business, one…
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On February 2, 2022, the Tax Court issued a memorandum opinion in the case of John M. Larson (“Larson”).[1] This case involves a dispute going back more than 20 years. Mr. Larson was an attorney and CPA. He and two other men, Robert A. Plaff and David Amir Makov, promoted a fraudulent tax shelter transaction…
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The IRS Office of Chief Counsel recently issued CCA 202152018 (“CCA”), in which the IRS is attacking yet another business valuation.[1] The IRS takes the position in the CCA that because the valuation used failed to account for a potential acquisition, the grantor retained annuity trust (“GRAT”) failed to properly qualify as a GRAT even…
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What are the rights of a creditor to LLC interests to satisfy their claim? That question was at issue in a recent opinion from the Alabama Supreme Court.[1] In that case, the creditor received a “charging order” (discussed below) requiring that distributions from the LLC made to the debtor be instead transferred to the clerk…
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In another recent case involving a multi-entity tax savings strategy, pitched as the “integrated tax plan,” particularly leveraging “management fees,” we see again the Tax Court scrutinizing the legitimacy of the structure, incorporating a C corporation and a partnership, and in turn allowing the IRS to whipsaw the taxpayers.[1] Facts Around late 2009 through early…
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In the Heiting v. United States[1] decision issued on October 18, 2021, the United States Court of Appeals for the Seventh Circuit affirmed a district court decision[2] to dismiss a couple’s claim for a refund of taxes, rejecting the taxpayers’ argument that the repurchase of restricted stock previously sold by their trustee was effectively a…
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Under current law, the unified credit against estate and gift tax sits at $10,000,000, subject to indexing for inflation (the “Exemption”).[1] As a result of the Tax Cut and Jobs Act, this number increased from $5,000,000 effective January 1, 2018 and through December 31, 2025, with the number set to drop back down to $5,000,000on…
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Earlier this year I discussed President Joe Biden’s proposed tax policies, which was prepared in anticipation of President Biden’s impending announcement regarding the Build Back Better Act.[1] As we approach the end of the Biden administration’s first year, tax professionals are on the edge of their seat. A plethora of different legislative changes directed at…
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Is your business worth more to the IRS than it is to you? Will you owe estate tax on more value than you receive? A recent tax case illustrates how this is possible.[1] It is very common, even advisable, that closely-held business owners enter into buy-sell agreements limiting transferability of interests and setting forth procedures…
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