When United States Tax Court Judge Paris issued the opinion in the case of Ryan Fleischer in 2016 , it caused quite a stir in the tax blogosphere. And from what I have been able to gather off the record it remains of interest. The Fleischer decision makes it very difficult, if not impossible for some financial professionals to use S corporations to mitigate self-employment tax. Rather than attack on reasonable salary, the IRS took an assignment of income approach, which succeeded throwing planners for financial professionals like Fleischer into a bit of an uproar...
Editor’s Pick: Tax Planner Faces Malpractice Claims Over Decades-Old Tax Advice—What Went Wrong?
In a case that every tax professional should take note of, the prominent law firm Sidley Austin LLP finds itself defending against claims that it provided faulty tax advice over two decades ago, leading to massive IRS liabilities for a family. The plaintiffs, the Cáceres family, are seeking to recover $7 million after settling with the IRS, claiming Sidley’s advice on a complex asset liquidation set them up for disaster. The kicker? The lawsuit was filed over 25 years after the advice was given. So, how are the plaintiffs still able to pursue the case? It all boils down to a claim of fraud—and how that could toll the statute of limitations.