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.

Tax Practitioner Credentials and the Incidence of IRS Audit Adjustments

2003 ◽  
Vol 17 (1) ◽  
pp. 1-14 ◽  
Author(s):  
Peggy A. Hite ◽  
John Hasseldine
Keyword(s):  
Random Selection ◽  
Internal Revenue Service ◽  
Internal Revenue ◽  
Tax Returns ◽  
Selection Of

This study analyzes a random selection of Internal Revenue Service (IRS) office audits from October 1997 to July 1998, the type of audit that concerns most taxpayers. Taxpayers engage paid preparers in order to avoid this type of audit and to avoid any resulting tax adjustments. The study examines whether there are more audit adjustments and penalty assessments on tax returns with paid-preparer assistance than on tax returns without paid-preparer assistance. By comparing the frequency of adjustments on IRS office audits, the study finds that there are significantly fewer tax adjustments on paid-preparer returns than on self-prepared returns. Moreover, CPA-prepared returns resulted in fewer audit adjustments than non CPA-prepared returns.

How do IRS Resources Affect the Corporate Audit Process?

2019 ◽  
Vol 95 (2) ◽  
pp. 311-338 ◽  
Author(s):  
Michelle Nessa ◽  
Casey M Schwab ◽  
Bridget Stomberg ◽  
Erin M. Towery
Keyword(s):  
Internal Revenue Service ◽  
Strategic Game ◽  
Audit Process ◽  
Publicly Traded ◽  
Budget Cuts ◽  
Corporate Tax ◽  
Negatively Associated ◽  
Internal Revenue ◽  
Audit Data ◽  
Tax Returns

ABSTRACT This study investigates how Internal Revenue Service resources affect the IRS audit process for publicly traded corporations. Using confidential IRS audit data, we examine the effect of IRS resources on the incidence and magnitude of proposed deficiencies and settlement outcomes. We find that IRS resources are positively associated with both the likelihood and magnitude of proposed deficiencies, but negatively associated with the proportion of proposed deficiencies collected. These results are consistent with the IRS focusing on fewer positions, but targeting positions supported by weaker taxpayer facts when resources are more limited. Based on our findings, we estimate the loss in tax collections from audits of LB&I corporate tax returns alone exceeds the savings from reductions in the IRS enforcement budget. This study contributes to the literature examining the strategic game between tax authorities and corporate taxpayers and has important implications for policymakers, particularly in light of recent IRS budget cuts.

Tax Decision Making under the New Burden of Proof Rules

2004 ◽  
Vol 26 (2) ◽  
pp. 23-42 ◽  
Author(s):  
Anne M. Magro ◽  
Beth Stetson
Keyword(s):  
Decision Making ◽  
Burden Of Proof ◽  
Internal Revenue Service ◽  
Popular Press ◽  
Tax System ◽  
Internal Revenue ◽  
Playing Field ◽  
Proof Rules ◽  
Tax Professionals

In the late 1990s, controversy over alleged Internal Revenue Service abuses and concern about the extent of the agency's power over taxpayers led to the passage of new rules governing relations between the IRS and taxpayers. An important element of this new set of rules was I.R.C. § 7491, which purported to shift the burden of proof in civil tax cases from the taxpayer to the IRS. Commentators generally agreed that the shift would have little effect on the outcome of cases, but the popular press touted the new provision as an important step to level the playing field between the parties. We conduct an experiment in which we manipulate the applicability of I.R.C. § 7491 and measure role in the tax system (taxpayer versus tax professional). As predicted, we find that taxpayers assess a higher likelihood of success in litigation when the anticipated burden of proof rests with the IRS than when the anticipated burden of proof rests with the taxpayer. Taxpayers who believe that the IRS bears the burden of proof also assess a higher likelihood of success than do tax professionals, regardless of the applicability of I.R.C. § 7491. This increased perceived likelihood of success in litigation translates to an increased willingness on the part of taxpayers to engage in an unsound tax-motivated transaction.

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.

scholarly journals The Impact of Continuous Training on Maximizing Efficiency in Tax Administration: The Case of a State Internal Revenue Service (SIRS) in the North Central Region of Nigeria

2018 ◽  
Vol 3 (1) ◽  
pp. 165-172
Author(s):  
Muritala Awodun, PhD ◽  
Faizu Edu, PhD
Keyword(s):  
Employee Commitment ◽  
The State ◽  
Internal Revenue Service ◽  
Tax Administration ◽  
Continuous Training ◽  
Internal Revenue ◽  
The North ◽  
And Performance ◽  
Revenue Administration ◽  
The Impact

The purpose of this study is to establish the role of continuous training in maximizing efficiency in tax administration using the case of a State Internal Revenue Service (SIRS) in the North Central Region of Nigeria. The study examined the strategies adopted for continuous training by the SIRS and subsequently measured the impact of these strategies on the performance of all levels of management (low, middle and top) of the SIRS under focus. The SIRS identified the need for training from its inception and built into its process the entry training programme (of 3 months) for all staff, the monthly field feedback and training (of a day monthly) for all staff, directorates’ regular technical training, professional trainings, and leadership and management trainings (both local and international). These schedule five stage trainings have become a closely knitted continuous training strategy that has improved the skills and capacities of the employees of the SIRS. To ascertain the extent to which the above have impacted on the employees, the SWOT Analysis was adopted along with the appraisal of five set of questionnaires applied to 642 staff of the SIRS present at a particular month field feedback session. The five set of questionnaires were designed to measure; (1) the state of change readiness of employees of the SIRS for service excellence, (2) the state of change thinking of employees of the SIRS for service excellence, (3) the state of resistance to change by the employees of the SIRS, (4) the state of resistance to going through the process of change by the employees of the SIRS, and (5) the state of resistance to leaving the current state for the desired state of excellence. All these are targeted towards measuring the state of readiness for change, through continuous training, on the employees’ commitment, efficiency and performance. The above is in addition to the analysis of the individual strengths and weaknesses that culminates in the organizational strengths and weaknesses, including the environmental opportunities and threats which have a significant role to play on the organizational performance. The findings revealed that between 73 - 87 percent of the staff of the SIRS are change ready, with positive change thinking mentality, not resistant to change, not resistant to going through the change process, and are not resistant to leaving the current state for the desired state of excellence. Ultimately, the study concludes that there is a positive relationship between continuous training, and employee commitment and job satisfaction, on the one hand, and continuous training and performance excellence as relating to efficiency and effectiveness in tax administration, on the other hand. This study is a pioneer one that extends the employee commitment debate to the Internal Revenue Service, using this SIRS as a case study. It provides an explanation, with empirical evidence, by demonstrating that training extends direct positive effect on employee commitment in revenue administration. The study also demonstrates that, in the revenue administration, job satisfaction helps to transmit the effect of continuous training on employee commitment and performance excellence.

The Impact of Accounting Methods, the Doctrine of Election, and Income Distortion on a Start-Up Election

2013 ◽  
Vol 11 (1) ◽  
pp. 33-54
Author(s):  
Glenn Walberg
Keyword(s):  
Internal Revenue Service ◽  
Business Growth ◽  
Internal Revenue ◽  
Start Up ◽  
Initial Characterization ◽  
New Business ◽  
Doctrine Of Election ◽  
The Impact ◽  
Initial Choice ◽  
Tax Accounting

ABSTRACT A taxpayer with an existing business generally can establish return-signing positions to characterize the growth of its business as occurring either through an expansion of the existing business or the start of a new business. The selected character then determines the manner by which the taxpayer recovers costs associated with the growth. This article explores how the taxpayer's initial choice to characterize business growth as an expansion or start-up could become binding on the taxpayer and Internal Revenue Service (IRS) under accounting method rules and/or the doctrine of election, which would permit a recharacterization only to avoid income distortion. The article concludes that those tax accounting concepts could unjustifiably make the initial characterization binding, irrespective of its accuracy, due to the difficulty of showing that a particular characterization causes income distortion.

Hispanic and Asian Earnings Inequality: New Workers and Immigrants

2020 ◽  
Vol 110 ◽  
pp. 442-446
Author(s):  
Randall Akee ◽  
Maggie R. Jones ◽  
Sonya R. Porter ◽  
Emilia Simeonova
Keyword(s):  
Labor Market ◽  
Panel Data ◽  
Census Data ◽  
Earnings Inequality ◽  
Internal Revenue Service ◽  
Individual Level ◽  
Internal Revenue ◽  
Us Census ◽  
The Impact ◽  
New Immigrant

Using confidential-use, individual-level Internal Revenue Service and US Census data, we follow the earnings of Hispanics and Asians between the ages of 18-45 with panel data that spans the years 2005-2014. These two groups represent the largest immigration flows in recent years. We examine the impact that labor market entrants and new immigrant arrivals within each group have on group earnings inequality. We show that labor market entrants and immigrants increase inequality for both groups.

scholarly journals Earnings Risk in the Household: Evidence from Millions of US Tax Returns

2020 ◽  
Vol 2 (2) ◽  
pp. 237-254
Author(s):  
Seth Pruitt ◽  
Nicholas Turner
Keyword(s):  
Administrative Data ◽  
Certainty Equivalent ◽  
Internal Revenue Service ◽  
Aggregated Data ◽  
Related Research ◽  
Internal Revenue ◽  
Risk Increase ◽  
Tax Returns ◽  
Earnings Risk

Using detailed Internal Revenue Service administrative data on millions of households, we find that households effectively insure against much of the risk facing primary earners. We show that households face less risk than males alone, and households face roughly half the countercyclical risk increase. As a result of these risk differences, household certainty equivalent earnings are 19 percent higher than for males alone, and household certainty equivalent earnings fall by about half as much during recessions. To facilitate related research, we make available the aggregated data used in our analysis. (JEL D12, D13, E32, G51)

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