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Tax Court Closes Building and Cancels More Trial Sessions

As the fallout from the coronavirus (COVID-19) continues, the US Tax Court (Tax Court) has cancelled additional trial sessions. As we previously discussed, the Tax Court last week cancelled all trial sessions for March 2020. Now, the Tax Court has announced that all trial sessions for April 2020 are also cancelled. Additionally, although the Tax Court will remain open to receive mail and accept hand-delivered petitions, the Tax Court building will be closed to visitors.

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Weekly IRS Roundup March 9 – 13, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 9 - 13, 2020. March 10, 2020: The IRS published a practice unit on how to compute the alternative minimum foreign tax credit. The public unit includes the framework for computing such alternative minimum foreign tax credit under IRC section 59. March 10, 2020: The IRS released revised instructions for various information returns for 2020. The instructions were updated to reflect the PATH Act accelerating the due date for filing Form 1099 that included nonemployee compensation to January 31. Additionally, Form 1097-BTC, Form 1098-C, Form 1098-F, Form 1098-MA, Form 1098-Q, Form 1099-CAP, Form 1099-LS, Form 1099-LTC, Form 1099-OID, Form 1099-Q, Form 1099-SA, and Form 1099-SB and its instructions have been converted from annual updates to continuous use forms and instructions. March 11, 2020: The Chief Counsel’s Office adopted...

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Coronavirus (COVID-19) Results in Tax Court Trial Sessions Cancellations

The coronavirus (COVID-19) has now impacted the operations of the United States Tax Court (Tax Court). This morning, the Tax Court announced that after assessing all relevant factors relating to COVID-19, including travel and public health considerations, the trial sessions for March 16, 2020, March 17, 2020, March 23, 2020, and March 30, 2020, are cancelled. Orders are currently being issued in several cases reflecting the cancellations, which impact trial sessions in the following cities: Boston, Massachusetts Chicago, Illinois Dallas, Texas Hartford, Connecticut Milwaukee, Wisconsin Los Angeles, California Philadelphia, Pennsylvania Pittsburgh, Pennsylvania Provo (Salt Lake City), Utah San Francisco, California The Tax Court expects the parties to continue to work together to exchange information and address pending issues. It remains to be seen if the Tax Court will cancel other trial sessions scheduled for April, May and June (the Tax Court does not hold...

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Supreme Court Tackles Tax-Related Cases

The United States Supreme Court has picked up the pace this week, already issuing eight regular opinions and four opinions relating to orders as of today. We discuss the tax-related items here. In Rodriguez v. FDIC, the question was how to decide which member of a consolidated group of corporations is entitled to a tax refund. The Internal Revenue Service (IRS) issued a refund to the designated agent of an affiliated group, but the dispute centered on how that refund should be distributed among the group’s members. Some courts have looked at state law to resolve the distribution issue while others crafted a federal common law rule providing that, in the absence of an unambiguous tax allocation agreement, the refund belongs to the group member responsible for the losses that led to the refund. The Supreme Court rejected the latter common law rule, finding that it was not a legitimate exercise of federal common lawmaking. In reaching its decision, the Court...

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President Trump Announces Intent to Nominate Two More Tax Court Judges

On November 6, 2019, President Trump announced his intent to nominate Ms. Alina Ionescu Marshall and Mr. Christian N. Weiler to serve as Judges on the United States Tax Court (Tax Court). Mr. Travis Greaves was previously approved by the Senate Finance Committee to be a Tax Court Judge and is awaiting confirmation by the Senate. Judge Mark V. Holmes, who is currently a senior Judge on the Tax Court, was previously renominated by President Trump and is awaiting action by the Senate Finance Committee. For our prior coverage related to Mr. Greaves and Judge Holmes, see here. According to the White House Announcement and other publicly available information, Ms. Marshall is currently Counsel to the Chief Judge of the Tax Court in Washington, DC, a position she has been in since 2013. Prior to that, she was an associate at West & Feinberg, P.C. (2012–2013), clerked at the Tax Court (2010–2012), was an associate at Freshfields Bruckhaus Deringer US LLP...

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Finally the IRS Clarifies Its Position on Cryptocurrency

It took five years, but the Internal Revenue Service (IRS) has finally released some guidance on the taxation of cryptocurrencies! On October 9, 2019, the IRS released Revenue Ruling 2019-24 and several “frequently asked questions” (and answers) which deal with some (but not all) of the federal income tax issues involved with cryptocurrencies. Over the years, we have reported on the issues involved with cryptocurrencies, including the potential controversies that have ensued because of a lack of guidance. Call for Compliance: Cryptocurrency May Be Subject to US Tax Cryptocurrencies & State Tax: Transactions with Virtual Currency Digital Token Offerings and Sales under Regulation S Watch Your Mailbox: IRS Letters Warning of Cryptocurrency Non-Compliance on Their Way Governments Are Pulling Back the Crypto-Currency Curtain The IRS May Be Coming for Your Bitcoins IRS Criminal Investigation Division Expects Official “Stand up” of National Coordinated...

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Courtney Dunbar Jones and Emin Toro Confirmed to Tax Court

On August 5, 2019, the Senate confirmed Courtney Dunbar Jones and Emin Toro as nominees to the US Tax Court in a voice vote before leaving for August recess. Jones and Toro will now each serve a 15-year term. President Trump had initially nominated each candidate in 2018, but the Senate was not able to confirm their appointments prior to the end of the last 2018 session—requiring the candidates to be renominated in February of 2019. We reported the initial nominations in “President Trump Announces Intent to Nominate Emin Toro to Tax Court” and “President Trump to Nominate Greaves to Tax Court; Senate Confirms Copeland and Urda.” Furthermore, we reported the renomination of these nominees in “Renominations to Fill Vacancies on the United States Tax Court.” Prior to her confirmation, Jones served as a senior attorney in the Tax-Exempt and Government Entities division in the Office of Chief Counsel of the Internal Revenue Service. While there, she authored...

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Law360: Myers May Make It Easier to Find Equitable Relief in Tax Court

Laura L. Gavioli, PC, recently wrote an article for Law360 on a US Court of Appeals for the District of Columbia Circuit’s decision that may provide an equitable avenue for hearing of late-filed petitions in US Tax Court. The Law360 article, “Myers May Make It Easier to Find Equitable Relief in Tax Court,” can be accessed here.

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Court Rules That Wind Farm Did Not Provide Proof of Development Fee to Receive 1603 Cash Grant

On June 20, 2019, the United States Court of Federal Claims published its long-awaited opinion in California Ridge Wind Energy, LLC v. United States, No. 14-250 C. The opinion addressed how taxpayers engaging in related party transactions may appropriately determine the cost basis with respect to a wind energy project under the Internal Revenue Code (IRC). Central to the case was whether the taxpayer was allowed to include a $50 million development fee paid by a project entity to a related developer in the cost basis of a wind project for purposes of calculating the cash grant under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 (Section 1603). Section 1603 allowed taxpayers to take a cash grant in lieu of the production tax credit of up to 30% of the eligible cost basis of a wind project. The eligible cost basis under Section 1603 is determined in the same manner as under Section 45 for purposes of the investment tax credit (ITC). The...

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Trust Wins Due Process Challenge to North Carolina State Income Tax

Last week, the US Supreme Court ruled that North Carolina may not tax a trust's income when the trust's only contact with the state is the in-state residence of discretionary beneficiaries. The Due Process Clause requires a minimum connection between a state and the person it seeks to tax. The mere residency of the discretionary beneficiaries of a trust is not sufficient to satisfy this requirement. Read the full article.

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