Loopholes

As always, much has happened in the tax courts this past month; let's jump right in!

This article does not summarize key rulings of 2022, but instead offers some key lessons and reminders from 2022 tax opinions as well as a few IRS rulings. If you want to read the ruling, see the citations and links. Takeaways from a few state tax rulings that have a lesson of relevance beyond the particular state are also included...

We are so excited to announce the 2023 Summer Education Series! All summer long we will be bringing our loyal subscribers monthly webinars featuring some of the brightest minds in tax! Each webinar will feature our usual blend of high-quality education and entertainment and include continuing education credits for those who qualify. All of this is included in your regular subscription! Continue reading to see what we have in store...

Another active month, with plenty of variety and practice tips. And new Tax Court Rules announced...

Although Form W-9 has some other purposes, a company will usually ask you to fill it out if you are a business-to-business service provider . If you don’t provide a TIN to your customer, they may have to subject you to backup withholding . If it is my company that asks you for the W-9, I am not going to do backup withholding if you don’t send me the W-9. I’m just not going to pay you until you cough it up. I believe in learning from experience. But it is better if the experience you learn from is other people’s experience. That is why a very large percentage of my tax writing is from court opinions, most often the United States Tax Court. This piece is my own experience.

A 113-page set of instructions accompanies the 2022 Form 1040, U.S. Individual Income Tax Return. Commonly used Form 1040 Schedules A, B, C, D, and E comprise an aggregate of 69 pages of instructions. Instructions are non-binding information but certainly necessary for getting tax information correctly placed on the tax return. With hundreds of Internal Revenue Code (IRC) sections, thousands of pages of regulations, thousands of IRS rulings and judicial opinions, on top of more than 200 pages of instructions relevant to many complex Forms 1040, some tax pros might easily overlook these items. This article travels top to bottom through the two-page 2022 Form 1040, highlighting a few items not to overlook. No promises that the list hits all items, but what follows might bring to mind a few more items you can add to the list.

Question: What kind of trusts help a taxpayer pay less or no federal tax? Answer: If you have trusts and want to minimize state taxes, there are options available. In the United States, there are two types of trusts for federal income tax purposes: grantor and non-grantor trusts. A grantor trust is one the creator or their spouse retains enough control over that they are still the assets’ owner. Therefore, they must pay taxes on any income or gains it generates. On the other hand, a non-grantor trust is its own entity and is responsible for paying its own taxes. However, state tax laws also have an impact on the taxes trusts must pay. By choosing the right trustees or assets for your non-grantor trust, it’s possible to minimize or even eliminate state income taxes. Don’t miss out on this opportunity. Learn more about your options and take steps to reduce your trust taxes today. Click here to continue reading.

Lots going on at Tax Court in February, 2023. Here are my highlight picks...