IRS Signs Deal with Palantir Technologies to Catch Tax Cheats

A contract with Palantir Technologies will give the IRS new firepower to pursue tax cheats by connecting the dots in millions of tax filings, bank transactions, phone records, and even social media posts. By giving the agency more tools to find and prosecute cheats, the scope of the data mining Palintir will be empowered to perform has some tax lawyers fearing they’ll be blindsided as they try to defend clients facing large fines and jail … Read More

Security Worker Based in Iraq Entitled to Foreign Earned Income Exclusion

The Tax Court has determined that a taxpayer who worked for a security company in Iraq was a “qualified individual” entitled to the foreign earned income exclusion for the years at issue. The taxpayer’s overall course of conduct, including the facts that he repeatedly sought employment opportunities in Iraq, returned to the U.S. only as required by his employer, and had very limited ties to the U.S., showed that he was a bona fide resident … Read More

Tax Court Denies Deductions Claimed by Medical Marijuana Company

The Court also found that the government’s dismissal with prejudice of a previous civil forfeiture action against the taxpayer did not bar the deficiency determination. A business may deduct from its gross income all the ordinary and necessary expenses paid or incurred during the tax year in carrying on the trade or business. (Code Sec. 162(a)) However, under Code Sec. 280E, no “deduction or credit shall be allowed for any amount paid or incurred during … Read More

IRS and Four Allies Looking at Community Banks and Smaller Financial Firms

Tax enforcement agencies from the United States and four other countries are leading a crackdown on “professional enablers” of international tax fraud, the U.S. Internal Revenue Service head of criminal investigations said on Wednesday. The IRS, via an alliance with Britain, Australia, Canada and the Netherlands set up earlier this year, is pursuing individuals and firms that facilitate tax evasion, IRS Chief of Criminal Investigations Don Fort told reporters in remarks that give fresh details … Read More

Military Contractor Doesn’t Qualify for Foreign Income Exclusion

The Tax Court has held that an aircraft captain for a military contractor was not entitled to exclude under Code Sec. 911(a) income that he earned working in Afghanistan, finding that his “abode” was within the U.S. during his deployment. The Court also rejected the taxpayer’s argument that he nonetheless was entitled to the exclusion under Code Sec. 911(d)(4), which waives certain requirements for individuals who are required to leave a foreign country on account … Read More

Alimony Deduction Ending for Divorces After 2018

President Donald Trump’s 2017 tax overhaul eliminates the deduction for alimony payments — for divorces finalized starting in 2019. For many wealthy couples, reaching a deal by Dec. 31 could mean tens of thousands of dollars in tax savings every year. That’s pushing more of them to finally follow Sucherman’s advice and cooperate as the deadline nears. Divorce often means war for the top 1 percent. The richer you are, the more homes, possessions, investments … Read More

France Goes After Banks for Helping Taxpayers Cheat on Their Taxes

Following the USA Department of Justice efforts to convict a former bank executive for failing to comply with FATCA (see article here ), France is now increasing their efforts to track down and penalize those who attempt to evade their tax liabilities. Swiss bank UBS Group AG, its French unit and six executives faced charges of aggravated tax fraud and money laundering on Monday, the first day of a trial into allegations they helped wealthy … Read More