Tax Court allows patent attorney to take business deductions for car restoration

sethastianTax News

The Tax Court has found that a taxpayer, a patent attorney by trade, was entitled to substantiated business expense deductions stemming from his automobile restoration business, as he intended to make a profit from the activity (R.B. Main, TC Memo. 2016-127). The taxpayer successfully proved that the primary objective of his automobile activity, the restoration and then sale of 1955 and 1956 Plymouth automobiles, was to make a profit under the standards of Code Sec. 183(b).

OH – Commercial activity tax refund denied for lack of agency relationship

sethastianTax News

n Ohio gasoline distributor’s (taxpayer) request for a refund of commercial activity tax (CAT) was properly denied because the taxpayer failed to establish an agency relationship between itself and the entity that it purchased fuel and related products from. In this case, the taxpayer claimed it had overreported its gross receipts that were subject to CAT because it included certain amounts it received as the entity’s agent. The taxpayer claimed that the entity’s requirement that the taxpayer use the entity’s standards and image created a principal-agent relationship between them.

IRS may prioritize cases for private tax collection

sethastianTax News

The IRS retains discretion to prioritize cases for assignment to private collection agencies, IRS Chief Counsel has explained in new program manager technical advice (PMTA). The IRS is also expected to announce further details about the latest private collection initiative sometime later this year.

IRS notifies taxpayers of special procedures permitting return of seized assets

sethastianTax News

The IRS began notifying impacted taxpayers of special procedures permitting the return of seized assets. To be eligible for a return of the assets, taxpayers must show that the underlying funds came from a legal source.

Under the IRS’s former forfeiture procedures, the agency could seize funds from taxpayers allegedly structuring bank transactions, regardless of the intent or source of the funds.

OH – Mailing of failure to file notices announced

sethastianTax News

The Ohio Department of Taxation has announced that it has begun mailing failure to file notices to individual income taxpayers who have not filed an Ohio school district income tax return and who appear to have lived in a taxing school district, based on the school district number/mailing address reported on their tax return form.

IRS to increase hiring in enforcement

sethastianTax News

IRS Commissioner John Koskinen announced that the IRS will be hiring up to 700 new enforcement personnel in the coming months. He explained that the additional resources needed to afford the hiring increase resulted from unspecified efficiencies and the rate of attrition among agency personnel. The announcement signals the first significant enforcement hiring initiative in more than five years.