Deficiency notice is not final interest abatement determination

Article Abstract:

A deficiency notice from the IRS cannot serve as a 'final determination' not to abate interest, as shown by the Bourekis case. The case involves a claim made by taxpayers for a partnership-related loss on their 1981 tax return. After the Tax Court allowed the IRS to disallow a part of the taxpayers' claimed loss, the taxpayers sent a $4,472 check to the IRS to cover any tax deficiency. When the IRS responded by sending the taxpayers a deficiency notice for $4,472 and a further notice that interest will accrue on the deficiency, the taxpayers filed a lawsuit against the IRS for the deficiency and for failing to abate the interest. However, the court ruled that the IRS did not send the deficiency notice to serve as a final interest abatement determination. It also determined that it did not have jurisdiction over the interest abatement claim made by the taxpayers.

Tax abatement

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What accountants need to know about the Tax Court

Article Abstract:

The Tax Court is a judicial body that can be used by taxpayers as a venue for settling all federal tax cases involving the IRS. This court offer several advantages for claimants compared with the Court of Federal Claims, the bankruptcy court or the federal district court. These include low filing fees, good chances for a settlement, no refund filing requirement, prepayment venue and easy to follow regulations. However, the resolution of tax claims through the Tax Court has its own disadvantages. The court's redetermination authority may result to an increase in the liability of the taxpayer than what was initially determined by the IRS. The taxpayer may also be charged with higher taxes if the IRS decides to use its powers to assert additional tax adjustments.

Tax Management, Evaluation, Tax accounting, United States. Tax Court

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Recapture for special-use election

Article Abstract:

The Tax Court has ruled in the case of Merwin Estate that an executor's failure to attach a notice for special-use election or a recapture agreement on the estate tax return renders the special-use election ineffective. The Tax Court's ruling does not follow the reasoning of the Seventh Court in the case of Prussner which allowed a special-use election with a late recapture agreement. Under Internal Revenue Code Section 2032A(d)(3)(B), defects in filings can be remedied within 90 days by notifying the IRS, but the Court ruled that the executor failed to meet substantial compliance guidelines by failing to file a recapture agreement with the return.

Analysis, Tax courts, Special use valuation (Taxation), United States. Court of Appeals for the 7th Circuit

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