Summary Opinions for 9/5/14

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Mostly me talking about other folks publishing great content this week, although we do touch on a few cases.  SumOp has some interesting news on the Service getting sued, inversions, and the proper way to value your conservation easement.

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  • Frank Agostino’s firm has published its September newsletter, available here.  The newsletter has articles about the review standard of assessable international penalties, the professionals’ duty to report, and the collections statute of limitations as it applies to installment agreements.  The articles are very well written; sort of like very practical and helpful law review articles.
  • The Service was served with a class action lawsuit over tax preparer user fees this week, with the class having a whole lot of potential members.  Tax Girl has coverage at Forbes, which can be found here.  Unfortunately, my sixty-five bucks will go back to my firm.  The complaint seems to be twofold: first, the requirement is invalid; and second, the vast majority of the cost is not specifically allocated to any IRS actual cost.  Allen Buckley is one of the two attorneys representing the preparers.  His name may be familiar as the named party in a very similar lawsuit from last year where the user fee was upheld in the Northern District of Georgia. We touched on that in a prior SumOp.  Nice to trade up to the class action.  Way better payout if he is successful (1/3x$150MM>$65).
  • “The World On Time” kind of indicates a certain level of control over when and where the FedEx drivers are going to be, but FedEx has always treated its drivers as independent contractors.  In 2010, the Northern District of Indiana held that this was true in 23 states, but the drivers were employees in three others (95 page opinion!  I didn’t read that).  The Ninth Circuit has reversed as the holding as to California and Oregon.  Checkpoint tells me that the IRS has previously reviewed this issue as to FedEx, and determined for federal purposes, the drivers are independent contractors.
  • The Tax Court in Schmidt v. Comm’r has issued a very detailed opinion on the calculation of a conservation easements and the proper application of the discounted cashflow method in the case.
  • Joe Kristan has a good write up of Vanney Associates v. Comm’r, where a C corp was making yearend bonus “distributions” to its owner/employee, and then doing book entries for loans back to the company in order to zero out the income, minimize tax, and not actually take the funds out of the company.  The owner never cashed the checks in question, and the tax court held there was no actual distribution.
  • We have not covered inversions much yet, but I had to linked to the Mauled Again blog discussing comments made by Mark Zandi of Moody’s discussing the negative impact of inversions and some of the reasons certain types of companies consider inversions.  Both men are very smart, and the post and underlying article are both worth a read.  I should note, I had Professor Maule for at least three tax classes, maybe four, during law school, and Moody’s Analytics, which I believe Mr. Zandi helped co-found, is about 10 yards away from my office.
About Stephen Olsen

Stephen J. Olsen’s practice includes tax planning and controversy matters for individuals, businesses and exempt entities for the law firm Gawthrop Greenwood, PC.

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