Service may collect amount reported on return - despite lower amended return

Article Abstract:

The Tax Court ruled in the 'Fayeghi' case that the IRS is allowed to collect amounts self-assessed by taxpayers and indicated on their original tax returns despite the fact that they have submitted a petition to the Tax Court. Sec 6201(a) of the Internal Revenue Code provides that the IRS can promptly make a collection on any self-reported tax liability on an original tax return or any increase in tax liability indicated on amended tax return. It can also make a collection on any additions to tax based on the liability. However, an amendment of Sec 6213(a) holds that the IRS may be prevented by the Tax Court from assessing and collecting deficiencies covered by a Tax Court petition. The Tax Court found that the IRS was making a collection on what was reported by the taxpayers on their original return, in addition to interest and penalties.

Tax appeals, Tax collection

---

IRS lacks right to tax preparation software and its source code

Article Abstract:

A magistrate judge held in 'Caltex Petroleum Corp,' 81 AFTR2d 98-1798 that the IRS has no authority to issue a summons to obtain an executable copy of a tax preparation software program, its source code and other relevant documentation. The case involved a petroleum company which refused to release an executable copy of its computer program to the IRS since it would violate the restrictions imposed in its licensing and nondisclosure agreements. The accounting firm which developed the package also refused to provide information on certain grounds. The magistrate upheld the taxpayer and quashed the summons on the ground that it was an abuse of process. The Service's argument that it needed an executable copy of the program, the source code and other pertinent data to complete the audit trail of foreign tax credits was also rejected.

Prepackaged software, Software Publishers, Financial, Acctg Software Pkgs (Micro), Software, Financial software, Petroleum industry, Taxation, Foreign tax credit, Caltex Petroleum Corp.

---

Summary stipulated decision was not a determination for mitigation purposes

Article Abstract:

The Tax Court issued a ruling in 'Fong,' TCM 1998-181 that a stipulated decision eliminating the underlying terms of the agreement was not a determination for mitigation purposes, reversing the IRS who made a deficiency assessment on a closed tax year. The case involved a taxpayer who was given four parcels of land during a complete liquidation of a solely-owned company. These parcels of land were contributed to a new partnership of which the taxpayer was a partner. The issue was whether the determination was considered one of the conditions for adjustment defined in Section 1312. The Tax Court rejected the IRS's argument that a depreciation deduction for the property was not allowable due to an alleged inconsistency between the land values reported for depreciation purposes and for gain purposes.

Tax Deductions & Exemptions, Capital Management-Depreciation, Tax deductions, Depreciation, Extenuating circumstances, United States. Tax Court

Similar abstracts:

• Abstracts: Economic impact of storage and handling regulations on retail fertilizer and pesticide plants. Efficiency measures for retail fertilizer dealers
• Abstracts: Bankers investment trust. Jupiter Income unit trust
• Abstracts: Advancing human factors involvement in engineering design: a bridge not far enough? Unscheduled manual interventions in automated process control
• Abstracts: Recent trends in foreign direct investment. Report on the survey of implementation of methodological standards for direct investment
• Abstracts: Business-related deficiency interest is not deductible. Cell phone sales commissions are capital expenses. Company races away with advertising deduction

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.