LOOKING FOR LEGAL WAYS
TO REDUCE TAX?
New tax reduction strategies carefully explained and exhaustively researched every two weeks. Receive breaking news updates on tax law changes. Members only monthly AMA with TOTTB.tax.
WE PUBLISH TAX STRATEGIES FOR…
FEATURED CONTENT
I Sell Feet Pics on the Internet, Can I Deduct My Pedicure? (And Other Questions of the Gig Economy)
“I’m going to get a pedicure later,” my wife said to me one Saturday morning. I quickly replied, “You should start an OnlyFans so you can deduct it.” (Everything has a tax angle when you’re married to a tax person.) “Is that really a thing?” she inquired. “Well…” I said, “It depends...” (Nothing is certain when you’re married to a tax person.) “...ordinarily I would say no, but in this case, it might be necessary.” (Everything is a tax pun when you’re married to a tax person.) In the “post” covid era, many taxpayers have turned to the gig economy. (Aside from the number of companies paying workers as contractors when they should actually be employees, but that’s a different topic for a different time.) Many of these gig workers are new to being self- employed and wonder what exactly they can “write off.”
Read More
CURRENT EDITION
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.
Navigating IRS Penalty Relief and Forgiveness
Yes, the IRS does forgive some tax penalties. The IRS refers to this forgiveness as penalty abatement. Abatement is the act or process of reducing or removing something. In this case it is removing or reducing a penalty. But penalty forgiveness is not a blanket offer that everyone qualifies for the way the radio ads make it seem. There is a process that the IRS has for requesting and granting abatement. It is up to the taxpayer to prove that they qualify for abatement. That’s where you come in.
From The Government And Not There To Help You
The story of James J. Maggard has some interesting and possibly valuable lessons. The one that strikes me as particularly important is that it makes it crystal clear that disproportionate distributions contrary to a corporation’s governing documents will not blow its S election. That does not mean that disproportionate distributions are just fine and that you don’t need to address them. There is a practical lesson about being careful who you take on as fellow shareholders. And there is another slightly odd lesson, that almost makes me want to create a new law of tax planning: Don’t deliberately involve the IRS in your business disputes. Their job is not to help you.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
Think Outside the Tax Box provides tax reduction strategies along with practical
implementation advice in order to reduce your clients’ federal tax bill with ease.
