Paul L. Caron
Dean
Pepperdine Caruso
School of Law
IRS News
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GAO: IRS Could Significantly Increase Revenues by Better Targeting Enforcement Resources
The Government Accountability Office has released IRS Could Significantly Increase Revenues by Better Targeting Enforcement Resources:(GAO-13-151): The IRS spends most of its enforcement resources on examinations. Correspondence exams of individual tax returns, which target fewer and simpler compliance issues, are significantly less costly on average than the broader and more complex field exams. GAO estimated…
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TIGTA Submits Semiannual Report to Congress
The Treasury Inspector General for Tax Administration yesterday submitted its Semiannual Report to Congress: It is my honor to submit this Semiannual Report to Congress summarizing the accomplishments of the Treasury Inspector General for Tax Administration (TIGTA) for the reporting period of April 1, 2012 through September 30, 2012. This report highlights the most notable…
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IRS Grants 501(c)(4) Tax-Exempt Status to Ohio Tea Party Group
Dayton Daily News: IRS Rules Tea Party Group Is Tax-Exempt: The IRS has ruled that a Tea Party affiliated organization in Ohio is exempt from federal taxes, concluding that the Ohio Liberty Council is a non-profit organization. In a statement Tuesday announcing the IRS’s decision, Tom Zawistowski, president of the conservative-leaning Ohio Liberty Council — known…
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Why Will the IRS No Longer Collect Data on Taxpayer Migration From Blue States to Red States?
National Review: An Embarrassing Metric Disappears: Why Are Government Statistics on Taxpayer Migration Being Discontinued?: As the din of America’s falling headfirst over the fiscal cliff reverberates across the nation, the Obama administration is quietly killing a key economic metric that tells how, and how many, people are voting with their feet. Since 1991 the…
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Tax Attorneys Are in No Rush to Leave the IRS
Shamik Trivedi (Tax Analysts), As Economy Recovers, Attorneys Are in No Rush to Leave IRS, 137 Tax Notes 1147 (Dec. 10, 2012): The chief counsel honors program is the primary way the IRS recruits entry-level attorneys. It accepts applications from third-year law students and graduating LLM students who have less than one year of post-JD…
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IRS Releases 159-Page Proposed Regs on New ObamaCare Medicare Taxes
The IRS has released a FAQ and 159 pages of proposed regulations on the new 3.8% surtax on investment income and the 0.9% tax increase on wages for high-income individuals enacted as part of the Affordable Care Act and scheduled to take effect on January 1, 2013. Forbes, Ten Things We Learned From The New…
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Groups Charge IRS With ‘Abdication of Responsibility’ in Not Prioritizing 501(c)(4) Regs
Election Law Blog: Democracy 21 and the Campaign Legal Center Charge the IRS With Indefensible Abdication of Responsibility, by Rick Hasen (UC-Irvine): Press release: “In a letter sent to the Internal Revenue Service today, Democracy 21 and the Campaign Legal Center charged the IRS with an ‘indefensible abdication of responsibility” in failing’ ‘to include the…
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Progressive Tax Rates Peak at $2 Million Income
CNBC, The Millionaires Who Pay the Highest Tax Rate: [N]ationally, the tax code is still broadly progressive. The more your make, the more taxes you pay as a percentage of your income. According to new data from the IRS, people who make $1 million or more had an average tax rate of 20.4% in 2010.…
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NY Times: IRS Challenges ‘Synthetic Consolidation’ Tax Shelter
New York Times: Many Moons Later, the IRS Questions a Tax Deal, by Gretchen Morgenson: The IRS works in mysterious ways. Its wheels grind slowly, but grind they do, as seen in the case of Fairfax Financial Holdings of Toronto. Close readers of this column may recall that Fairfax, an insurer, received a sweet $400…
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IRS Releases Fall 2012 SOI Bulletin
The IRS's Statistics of Income Division has released (IR-2012-97) the Fall 2012 SOI Bulletin (Vol. 32, No. 2), with these articles: Individual Income Tax Returns, 2010 (p.5), by Justin Bryan Partnership Returns, 2010 (p.79), by Nina Shumofsky, Lauren Lee & Ron DeCarlo Nonprofit Charitable Organizations, 2009 (p.169), by Paul Arnsberger Transactions Between Large Foreign- Owned…
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IRS Releases 2013 Standard Mileage Rates
The IRS has released (IR-2012-95) the standard mileage rates for 2013 (Notice 2012-72): Beginning on Jan. 1, 2013, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be: 56.5 cents per mile for business miles driven [up 1 cent from 2012] 24 cents per mile for medical…
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Treasury & IRS Release 2012-13 Priority Guidance Plan
The Treasury Department and IRS yesterday released the 2012-2013 Priority Guidance Plan: The 2012–2013 Priority Guidance Plan contains 317 projects that are priorities for allocation of the resources of our offices during the twelve-month period from July 2012 through June 2013 (the plan year). The plan represents projects we intend to work on actively during…
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TIGTA: Tax Preparers and IRS Agents May be Stealing Taxpayer Direct Deposit Refunds
The Treasury Inspector General for Tax Administration has released Processes for the Direct Deposit of Tax Refunds Need Improvement to Increase Accuracy and Minimize Fraud (2012-40-118): In 2011, more than 842,000 taxpayers took advantage of this “split refund” option, which the IRS first offered in 2007. They may split their tax refunds between two to…
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Group Sues IRS for Not Enforcing Electioneering Restrictions on Churches
The Daily Page: Freedom From Religion Foundation Sues IRS for Not Enforcing Electioneering Restrictions on Churches: On the heels of a presidential election in which hundreds of preachers publicly promised to flout IRS rules by endorsing candidates from the pulpit, the Madison-based Freedom From Religion Foundation filed suit against the IRS for failing to enforce…
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Alm & Soled: 60% of Taxpayers Cheat on Deductions for Business-Related Car Expenses
New York Times op-ed: Filling Up on Your Dime, by James Alm (Tulane) & Jay Soled (Rutgers): The next time you fill up your tank, you should know that the person next to you might be paying much less than you for gasoline. By reporting their personal automobile use as a business expense, millions of…
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GAO: IRS Lacks Adequate Internal Controls
The Government Accountability Office today released IRS’s Fiscal Years 2012 and 2011 Financial Statements: In GAO’s opinion, the IRS fiscal years 2012 and 2011 financial statements are fairly presented in all material respects. However, in GAO’s opinion, IRS did not maintain effective internal control over financial reporting as of September 30, 2012, because of a material…
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Judge Allows $975m of NOLs to Flow to Solyndra’s Owners After Bankruptcy
Following up on my previous posts (links below): Bloomberg, IRS Loses Appeal to Stop Solyndra From Carrying Out Plan: The IRS lost its request to delay Solyndra from carrying out its restructuring plan while the agency appeals a bankruptcy judge’s approval of the failed solar-panel maker’s plan to exit court protection. The IRS was denied its bid…
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IRS Under Obama Has Not Enforced Law Against Politicking by Churches
Huffington Post: Religion And Politics: IRS Not Enforcing Rules on Separation of Church and State: For the past three years, the IRS hasn't been investigating complaints of partisan political activity by churches, leaving religious groups who make direct or thinly veiled endorsements of political candidates unchallenged. The IRS monitors religious and other nonprofits on everything…
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Names of U.S. Expatriates Released for 3rd Quarter 2012
The Treasury Department today published the names of 238 individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) in the third quarter of 2012. Andrew Mitchel has updated his chart of the number of U.S. expatriates since January 1, 2005:
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IRS = Income Redistribution Service
Real Clear Politics: IRS: The Small Business Bully: President Barack Obama and Governor Mitt Romney continue to tussle over tax rates and deductions. Ignored, however, have been questions about tax collection and enforcement — tools presidents use to achieve their economic policy goals. Hit a wall ramming your tax hike or cut through Congress, simply…
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IRS Sells Confidential Information of 850,000 Tax Preparers for $35
The IRS yesterday issued IR-2012-79: The IRS today reminded the nation’s 730,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers (PTINs) for 2013. Also, preparers who have a competency test requirement should take the time now to schedule an appointment for the exam. Anyone who is a paid federal tax return…
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IRS Releases 2013 Inflation-Adjustments
The IRS today released various inflation-adjustments for 2013 (IR-2012-77; IR-2012-78; Rev. Proc. 2012-41, 2012-45 I.R.B. ___ (Nov. 5, 2012)), including: Gift Tax Exemption: $14,000 (up $1,000 from 2012) Contribution Limit for 401(k)/403(b)/457 Plans: $17,500 (up $500 from 2012) Catch-Up Contribution Limit (Age 50+) for 401(k)/403(b)/457 Plans: $5,500 (same as 2012) Income Limit for Full IRA…
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TIGTA: IRS Unjustifiably Withholds $181 Million in Relief from Tax Penalties from 1.5 Million Taxpayers
The Treasury Inspector General for Tax Administration yesterday released Penalty Abatement Procedures Should Be Applied Consistently to All Taxpayers and Should Encourage Voluntary Compliance (2012-40-113): The Internal Revenue Code imposes a Failure to File (FTF) penalty for failing to file a tax return and a Failure to Pay (FTP) penalty for failing to pay the…
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TIGTA: IRS’s Failure to Timely Process NOL Claims Costs $334 Million/Year in Avoidable Interest Charges
The Treasury Inspector General for Tax Administration yesterday released Delays in Processing Net Operating Loss Cases Resulted in Millions of Dollars in Unnecessary Interest Payments (2012-40-111): Taxpayers who encounter significant financial losses could be in a situation where their deductions exceed their income, creating a net operating loss (NOL) that can be applied against prior…
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IRS Objects to Solyndra’s Bankruptcy Plan, Says Owners Manipulated Rules to Preserve $975 Million in NOLs
Washington Times: IRS Says ‘Tax Avoidance’ at Heart of Solyndra Bankruptcy Plan: The IRS urged a bankruptcy judge to reject solar panel maker Solyndra LLC’s bankruptcy plan Wednesday, saying it amounts to little more than an avenue for owners of an empty corporate shell to avoid paying taxes. “The undeniable conclusion is that tax benefits…