Code Section 6501(a)
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Weekly IRS Roundup September 3 – 7, 2018

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 3 – 7, 2018: September 4, 2018: The IRS reminded taxpayers that they have until September 28, 2018, to apply for the Offshore Voluntary Disclosure Program. September 5, 2018: In response to taxpayer inquiries, the IRS clarified that taxpayers generally can deduct business-related payments to charities or governmental entities even if they also receive a state or local tax credit. September 6, 2018: The IRS released a Practice Unit on “Determining an Individual’s Residency for Treaty Purposes.” September 6, 2018: The IRS published Revenue Procedure 2018-47, which provides guidance to regulated investment companies regarding the application of the section 4982 excise tax to amounts included in income under the new Internal Revenue Code (Code) Section 965 transition tax. September 7, 2018: The IRS published Revenue Ruling...

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Statutes of Limitation in the International Tax Context

As most taxpayers know, under Internal Revenue Code (Code) Section 6501(a), the Internal Revenue Service (IRS) generally has three years after a tax return is filed to assess any additional tax. However, Code Section 6501 provides several exceptions to this rule, including but not limited to the following. False or fraudulent returns with the intent to evade tax (unlimited assessment period) Willful attempt to defeat or evade tax (unlimited assessment period) Failure to file a return (unlimited assessment period) Extension by agreement (open-ended or for a specific period) Adjustments for certain income and estate tax credits (separately provided in specific statutes) Termination of private foundation status (unlimited assessment period) Valuation of gifts of property (unlimited assessment period) Listed transactions (assessment period remains open for one year after certain information is furnished) Substantial omission of items (six-year assessment period)...

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Tax Court Rejects IRS Argument that Corporate Taxpayer Failed to File Valid Return

The issue of whether a valid tax return has been filed usually comes up in the context of individuals. One common situation involves taxpayers who file so-called zero returns or returns with an altered jurat and protest paying any taxes. Another common situation, which has received substantial attention lately, involves whether a tax return filed after an assessment by the Internal Revenue Service (IRS) is a “return” for purposes of the Bankruptcy Code. We previously posted on the latter. This post focuses on the uncommon situation where the IRS disputes whether a corporate taxpayer filed a valid return. As we have previously discussed, in the widely cited Beard v. Commissioner, 82 TC 766 (1984), the Tax Court defined a four-part test (the Beard Test) for determining whether a document constitutes a “return.” To be a return, a document must: (1) provide sufficient data to calculate tax liability; (2) purport to be a return; (3) be an honest and reasonable...

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