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Wayfair in the Lone Star State

In Nexus, State and Local by Zach MontgomeryLeave a Comment

The Supreme Court’s decision in South Dakota v. Wayfair created a monumental shift in the state tax landscape. Prior to the Court’s decision, forty-one states passed “kill Quill” laws in an effort to override the default physical presence rule. In its 5-4 decision, the Court abandoned the physical presence requirement established by Quill Corp v. North Dakota. As a result, …

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The Most Litigated Tax Issues

In Tax Litigation by Jason FreemanLeave a Comment

The Taxpayer Advocate recently issued her annual report to Congress, identifying the ten tax issues that are most litigated in federal courts.  For purposes of this list, the term “litigated” refers to cases in which a court issued an opinion—so the list does not necessarily capture all of the most heavily disputed issues that are typically disposed of short of …

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Should You “86” the BBA?

In Partnership Tax by Zach MontgomeryLeave a Comment

Should You “86” the BBA? 2018 marks a shift in the partnership audit rules. Based on the Bipartisan Budget Act of 2015 (BBA), Congress established a new partnership audit regime, which replaced, among other things, the previous partnership audit rules under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Under the BBA, the new audit regime took effect …

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Texas Tax Return Preparer Sentenced To Prison For Preparation of False Tax Returns

In Criminal, Tax Fraud by Jason FreemanLeave a Comment

The Department of Justice Tax Division recently announced its conviction and sentencings of a Texas-based tax return preparer to 42 months in prison.  The preparer was convicted of aiding and assisting in the preparation and filing of a false tax return and aggravated identity theft.     Court documents provide the following description of the scheme at issue: Shermin Marshall …

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The IRS Announces New “Compliance Campaigns:” Unreported Virtual Currency, S-Corporation Compliance, and International Tax Enforcement Are Top Priorities

In International Tax, S Corporations, Tax Reform by Jason FreemanLeave a Comment

The IRS recently announced five new “compliance campaigns”—areas where it intends to focus additional resources and enforcement efforts.  It comes as no surprise that unreported virtual currency, S-corporation dividends, and international tax are at the core of its focus.  The five compliance campaigns are:   S-corporation Distributions Virtual Currency Restoration of AMT Credit Carryforwards Repatriation through Foreign Triangular Reorganizations Section …

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Third Time’s A Charm: South Dakota v. Wayfair

In State and Local by Zach MontgomeryLeave a Comment

On June 21, 2018, the Supreme Court issued a monumental 5-4 decision in South Dakota v. Wayfair. The Court’s decision overturned decades of precedent, holding that the physical presence rule established by Quill Corp. v. North Dakotais “unsound and incorrect.”[1]What does this mean? Essentially, states are now permitted to require out-of-state sellers to collect sales tax from customers within their …

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Choice of Entity After Tax Reform

In Choice of Entity by Jason FreemanLeave a Comment

The choice of entity is a fundamental decision in structuring a trade or business.  Tax considerations and state-law principles affecting owner liability, control, and continuity play a role in the choice-of-entity analysis.  A litany of other factors are important as well, including the capitalization structure and the necessity of accessing equity markets, debt requirements, employee compensation, the impact of foreign …

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The Colliot Decision: The Government Loses an FBAR Case that May Change International Reporting Penalties

In FBAR, International Tax by Jason FreemanLeave a Comment

A recent federal court decision may stand existing FBAR litigation on its head. The Colliot decision—issued out of the District Court for the Western District of Texas—offers a new take on “willful” FBAR penalties.  And the government doesn’t like it.   The defendant, Colliot, argued that the IRS acted “arbitrary and capriciously” in assessing penalties against him that exceeded those allowed under …