Edward L. Froelich

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Edward L. Froelich represents domestic and foreign public corporations, privately held companies, partnerships, trusts and individuals across the spectrum of federal tax controversies, including audits, trials and appeals. Ed’s clients include businesses, business owners and investors with operations and interests in the financial services, technology, real estate, healthcare and other industries. Read Edward Froelich's full bio.

Can the IRS Assert IRC Section 6676’s Erroneous Refund Penalty on Protective Refund Claims?

By , and on Mar 25, 2024
Posted In IRS Audits, IRS Guidance, Tax Refunds

We once again want to bring to your attention the Internal Revenue Service’s (IRS) new favorite penalty provision: Internal Revenue Code (IRC) Section 6676. We have reported on this provision several times before (See here, here and here), but this time we’re analyzing it in the context of protective refund claims. As background, IRC Section...

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IRS (Belatedly) Strikes Back Against FedEx in Ongoing Foreign Tax Credit Case

By on Mar 14, 2024
Posted In Court Procedure Matters, Trial Courts

FedEx Corporation, previously the victor in a closely watched dispute regarding the government’s regulatory attempt to prevent taxpayers from claiming foreign tax credits on offset earnings (131 AFTR 2d 2023-1284 (W.D. Tenn. 2023)), recently filed a motion for judgment in the US District Court for the Western District of Tennessee to confirm its resulting refund...

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Taxpayer Loses Claim for Research Credit

By on Nov 30, 2023
Posted In Appellate Courts, Court Procedure Matters, Trial Courts

In United States v. Grigsby, Docket No. 22-30764, the US Court of Appeals for the Fifth Circuit held that a refund claim based on claimed Internal Revenue Code (IRC) Section 41 credits was erroneous. Cajun Industries LLC, a subchapter S corporation, filed a refund claim that identified four highly specialized construction projects (two refineries and...

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IRS Announces New Compliance Initiatives to Collect More Corporate Tax Using Inflation Reduction Act Funds

By , and on Oct 24, 2023
Posted In IRS Audits, IRS Guidance

On October 20, 2023, the Internal Revenue Service (IRS) announced new initiatives “to ensure large corporations pay taxes owed.” These initiatives leverage the substantial additional congressional funding that was given to the IRS thanks to the Inflation Reduction Act of 2022 (IRA). (We previously reported on how IRS enforcement is impacted by IRA funding here.)...

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IRS Strengthens Its Large Partnership Audit Teams

By on Sep 26, 2023
Posted In IRS Audits, IRS Guidance

Back in October 2021, the Internal Revenue Service’s (IRS) Large Business and International (LB&I) division announced the Large Partnership Compliance (LPC) program. This new audit program adopted features of the Large Corporate Compliance (LCC) program, such as its audit selection method. Similar to the LCC’s audit selection process, the LPC’s audit selection process has two...

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Can the Government Sue for Tax Debts Outside Internal Revenue Code Procedures?

By , and on Jul 21, 2023
Posted In Appellate Courts, Court Procedure Matters, Trial Courts

On June 1, 2023, in United States v. Liberty Global, Inc., the US District Court for the District of Colorado held that the US Department of Justice (DOJ) can assert and seek judgment for federal income tax deficiencies using a common law right of action, bypassing the usual statutory tax deficiency procedures outlined in the Internal...

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Tax Court Says Pollution Control Systems Are Not Pilot Models, Rejects Tax Research Credits

By and on Jul 14, 2023
Posted In Court Procedure Matters, Trial Courts

On July 6, 2023, the US Tax Court issued its decision in Betz v. Commissioner, T.C. Memo. 2023-84. Betz considers the application of the pilot model supply rule to expenses incurred by a designer (CPI[1]) of made-to-order air pollution control systems called oxidizers. At issue was approximately $500,000 of research and development tax credits pursuant...

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The Government Flexes Its Summons Muscles

By on May 26, 2023
Posted In IRS Guidance

Two recent decisions confirmed the broad administrative summons authority of the Internal Revenue Service (IRS). In the first, the US Supreme Court resolved a circuit conflict regarding notice requirements for third-party IRS summonses. In the second, the US Court of Appeals for the Third Circuit confirmed the primacy of the Internal Revenue Code (IRC) over...

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