Capricious Application of the Law: IRS Disregard of Revenue Rulings

2003 ◽  
Vol 1 (1) ◽  
pp. 64-74 ◽  
Author(s):  
Thomas M. Porcano ◽  
Jennifer L. Porcano
Keyword(s):  
General Public ◽  
Tax Compliance ◽  
Tax Planning ◽  
Internal Revenue Service ◽  
Tax Law ◽  
Historical Aspect ◽  
Internal Revenue ◽  
The Law ◽  
Full Force

The Internal Revenue Service (IRS) publishes Treasury Regulations and revenue rulings, in part, to ease compliance problems for taxpayers by providing the IRS's interpretation of (and position on) tax law. The general public should be able to rely on these pronouncements when engaging in tax-planning and/or tax-compliance activities. As such, the IRS should consistently follow them. If the IRS takes a position contrary to these pronouncements and/or disregards them in pursuing an issue, then increased confusion results. In several instances, the IRS has chosen to ignore its revenue rulings or to consider them wrong even though the rulings continue to be in full force. This article identifies situations where the IRS has chosen to disregard its revenue rulings. The historical aspect of each situation where the IRS disregarded its revenue rulings is presented, along with the courts' responses to this action. Implications and conclusions of the IRS's actions are discussed.

Muddling Parity of an Energy Efficient Incentive—Through the Lens of “Change in Accounting Method”

2015 ◽  
Vol 13 (2) ◽  
pp. 82-94
Author(s):  
Linda J. Campbell ◽  
Pamela C. Smith ◽  
Veronda F. Willis
Keyword(s):  
Energy Efficiency ◽  
Energy Efficient ◽  
Internal Revenue Service ◽  
Tax Law ◽  
Commercial Building ◽  
Internal Revenue ◽  
Treasury Department ◽  
Energy Efficient Building

ABSTRACT The Internal Revenue Service issued guidance related to automatic changes in accounting methods for taxpayers taking a §179D deduction for Energy Efficient Commercial Building Property. However, while the accounting treatment of §179D may trigger a change in accounting method for some taxpayers, this is not uniform for all taxpayers. In this paper, we argue that with this guidance, the Treasury Department (and Congress, by initial approval of the tax law) has inadvertently broadened unequal tax treatment between different segments of qualified taxpayers attracted to this important energy efficient building incentive. Further, we suggest that the §179D deduction be modified to achieve taxpayer parity to further incentivize energy efficiency.

The Role of Auditors, Non-Auditors, and Internal Tax Departments in Corporate Tax Aggressiveness

2015 ◽  
Vol 91 (1) ◽  
pp. 179-205 ◽  
Author(s):  
Kenneth J. Klassen ◽  
Petro Lisowsky ◽  
Devan Mescall
Keyword(s):  
Tax Compliance ◽  
Tax Planning ◽  
Internal Revenue Service ◽  
Corporate Tax ◽  
Tax Aggressiveness ◽  
Big 4 ◽  
Confidential Data ◽  
Tax Preparer ◽  
Tax Returns

ABSTRACT Using confidential data from the Internal Revenue Service on who signs a corporation's tax return, we investigate whether the party primarily responsible for the tax compliance function of the firm—the auditor, an external non-auditor, or the internal tax department—is related to the corporation's tax aggressiveness. We report three key findings: (1) firms preparing their own tax returns or hiring a non-auditor claim more aggressive tax positions than firms using their auditor as the tax preparer; (2) auditor-provided tax services are related to tax aggressiveness even after considering tax preparer identity, which supports and extends prior research using tax fees as a proxy for tax planning; and (3) Big 4 tax preparers, in particular, are linked to less tax aggressiveness when they are the auditor than when they are not the auditor. Our findings help policymakers and researchers better understand an important feature of tax compliance intermediaries; particularly, how the dual role via audits is related to observable corporate tax outcomes.

Useless/redundant/unread information returns and protective filings

2015 ◽  
Vol 16 (1) ◽  
pp. 40-48
Author(s):  
Roger Lorence
Keyword(s):  
Best Practices ◽  
Design Methodology ◽  
Large Body ◽  
Tax Compliance ◽  
Internal Revenue Service ◽  
Investment Management ◽  
Content Type ◽  
Technical Paper ◽  
Internal Revenue ◽  
Tax Practitioners

Purpose – To describe the best practices for complying with the increasingly large body of information returns required by the Internal Revenue Service of participants in the investment management industry and the severe penalties that apply to noncompliant taxpayers. Design/methodology/approach – This technical paper describes the explosive growth of information returns and protective return filings required of investment management industry participants, based upon the author’s advising tax return preparers and taxpayers charged with filing these forms. Findings – Each tax return filing season has demonstrated the ever-increasing and enormous waste of effort and money but no relief is in sight. The expectation of relief from the tax authorities at any level or from Congress and other legislative bodies, is remote. Originality/value – This paper provides timely guidance from a practitioner in the field of tax compliance including a summary of current forms to be reviewed by tax practitioners with investment management industry clients, either on the manager or the investor side.

Transparency, Compliance, and Filing Burden—Principles for the Revised Form 990

2009 ◽  
Vol 7 (1) ◽  
pp. 133-151 ◽  
Author(s):  
Pamela C. Smith ◽  
Donna J. Shaver
Keyword(s):  
Income Tax ◽  
Historical Context ◽  
Tax Compliance ◽  
Internal Revenue Service ◽  
Internal Revenue ◽  
Tax Exempt ◽  
Guiding Principles ◽  
Legislative Changes ◽  
Transparency And Accountability

ABSTRACT: The Internal Revenue Service (IRS) has significantly revised Form 990, “Return of Organization Exempt from Income Tax.” The informational return has not been substantively modified in 30 years. The IRS states the redesign of the return was based on three guiding principles: (1) enhancing transparency, (2) promoting tax compliance, and (3) minimizing the burden on the filing organization. This paper outlines the historical context of legislative changes concerning transparency and accountability within the tax exempt sector. It also outlines the major revisions to Form 990 and argues that they meet the underlying goals established by the IRS to enhance the overall accountability within the sector.

scholarly journals A REFORMULAÇÃO DA CONCEPÇÃO JURÍDICA DO SIGILO BANCÁRIO NO CENÁRIO INTERNACIONAL

2016 ◽  
Vol 15 (1) ◽  
Author(s):  
Carolina Reis Jatobá Coêlho
Keyword(s):  
Tax Compliance ◽  
Internal Revenue Service ◽  
Internal Revenue

Será que o direito ao sigilo bancário está fadado a desaparecer? No contexto de pós-crise econômica e mais especificamente no encontro da Cúpula de Londres em 2009, o G20 respondeu positivamente a esta questão. Dado este posicionamento, algumas iniciativas legislativas começaram a aparecer globalmente e de forma simultânea com o escopo de aumentar a transparência mundial, tornando mais distantes as concepções jurídicas de que tais direitos estariam ligados à privacidade e à intimidade absolutas. Pode-se apontar como uma dessas iniciativas o conjunto de normas norte-americanas de efeitos extraterritoriais denominado FATCA – Foreign Account Tax Compliance Act, que aparece no cenário atual para incrementar a arrecadação de tributos norte-americanos. A norma exigirá das instituições financeiras estrangeiras o reporte automático diretamente ao IRS (Internal Revenue Service) de algumas informações pessoais e financeiras de correntistas considerados norte-americanos, o que pode esbarrar na preservação do sigilo bancário como um direito fundamental no âmbito doméstico brasileiro. No entanto, considerando as pesadas sanções pelo descumprimento à norma, a aderência ao FATCA pelas Instituições Financeiras Brasileiras mostra-se imperiosa, em paralelo à discussão jurídica acerca do sigilo. Este fato implica na revisão da clássica lógica de incorporação de normas jurídicas em detrimento de um movimento intenso de interferências recíprocas entre as racionalidades jurídicas nacionais e internacionais, criando-se certa padronização nos ordenamentos jurídicos, fruto da internacionalização do Direito. Para exemplificar isso, o artigo irá descrever como a União Européia tem tratado a questão da cooperação internacional para encaminhamento de informações com fins tributários.

Instructional Resources for Tax Education: Communicating the Complexities of Capital Gains for Individuals After the 1997 and 1998 Tax Acts

1999 ◽  
Vol 14 (1) ◽  
pp. 117-143 ◽  
Author(s):  
Nancy B. Nichols ◽  
John O. Everett ◽  
Richard Boley
Keyword(s):  
Tax Planning ◽  
Capital Gains ◽  
Internal Revenue Service ◽  
Instructional Resources ◽  
Planning Techniques ◽  
Teaching Tools ◽  
Internal Revenue ◽  
Tax Education

his article provides examples and teaching tools for presenting the new capital gains provisions for individuals under the Taxpayer Relief Act of 1997 and the Internal Revenue Service Restructuring and Reform Act of 1998. For students to gain an understanding of these new complexities, they must work with examples and planning techniques that incorporate the new law in a meaningful way. This article provides two summary tables, three diagrams and nine computations or tax-planning mini-cases to assist tax professors in accomplishing this objective.

The Impact of Section 7491 on Requirements for Timely Filing Tax Returns

2004 ◽  
Vol 2 (1) ◽  
pp. 13-25
Author(s):  
A. Blair Staley ◽  
Donald T. Williamson
Keyword(s):  
Burden Of Proof ◽  
Internal Revenue Service ◽  
Internal Revenue ◽  
Tax Returns ◽  
The Law ◽  
The Impact

Section 7502 of the Internal Revenue Code (“I.R.C.”) provides that a timely filed tax return or other document will be considered received by the Internal Revenue Service (IRS) when mailed. Courts differ on whether I.R.C. § 7502 precludes a taxpayer from presenting credible evidence other than a physical postmark to establish when and if a tax return was timely filed. The article traces the development of the law interpreting when a tax return is considered “filed” and what evidence must be presented to prove that filing. It finds that the enactment of I.R.C. § 7491 in 1998, which shifts the burden of proof to the IRS under certain circumstances, does not resolve the issue of what evidence establishes filing. Under I.R.C. § 7491, the taxpayer must first present “credible evidence” of timely filing before the burden of proof shifts to the IRS. The issue remains unresolved whether the I.R.C. § 7502 mailbox rule is the only means for proving the timely filing of a tax return.

scholarly journals Improving public agency performance using balanced scorecard in Lagos internal revenue service (LIRS)

2019 ◽  
Vol 1 (3) ◽  
pp. 67-83
Author(s):  
Jacob Olufemi Fatile ◽  
Ogunlela Yemisi ◽  
Akindele Iyiola Tomilayo ◽  
Oluwole K. Sanni
Keyword(s):  
State Government ◽  
Balanced Scorecard ◽  
Developing Economies ◽  
Tax Compliance ◽  
Theory Of Change ◽  
Internal Revenue Service ◽  
Primary Data ◽  
Public Agency ◽  
Internal Revenue ◽  
Lagos State

Improving public agency performance vis-à-vis productivity is the greatest challenge facing the public sector. The main objective of this study is to determine the effectiveness of performance measurement using balanced scorecard (BSC) in Lagos Internal Revenue Service (LIRS). Primary and secondary data were utilized for the study. The primary data collected was analyzed using both descriptive statistics while the stated hypotheses were tested using regression analysis. The study adopts the theory of change (ToC) postulated by Weiss as a theoretical basis. The findings of the study reveal that using the balanced scorecard to measure performance periodically with stakeholders' reflection in LIRS has increased significantly the annual revenue generation in Lagos State. The study recommends among others that more attention should be paid to the provision of adequate incentives as well as training and development on contemporary issues in tax management for tax officers to promote their efficiency and effectiveness in developing economies including Nigeria. Furthermore, since citizens' expectation on societal general development and demand varies across divisions and localities Lagos state. Lagos state government should, therefore, accommodate the aspirations of the various groups to engender sustainable tax compliance by citizens.

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