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Publication

The Federal Tax Lien and Exemptions: Handling IRS Enforcement of Valid Tax Liens

Steven Walker May 1, 2022

This article provides advice for guiding clients that seek to discharge taxes in bankruptcy and practical guidance to help avoid common pitfalls when dealing with IRS enforcement post-discharge.

Publication

Consequences of Failing to Report Federal Changes to the California FTB or Filing State Returns

Steven Walker April 1, 2022

On Oct. 14, 2021, the Ninth Circuit Court of Appeals in Berkovich affirmed the decision from the Bankruptcy Appellate Panel (BAP) that because a debtor failed to report Internal Revenue Service (IRS) tax assessments to the California Franchise Tax Board (FTB), the

Blog

Staying IRS Enforced Collection Action Through Bankruptcy

Steven Walker 4th March 2022

An advantage of filing bankruptcy is that it can stop certain collection actions by the IRS. For example, suppose that a taxpayer has been under heavy fire from the IRS revenue officer for the past several years. The IRS recently

Blog

Reduction of Tax Attributes under I.R.C. § 108(b)

Steven Walker 4th March 2022

A taxpayer does not always get to eat cake and keep it too. When discharge of indebtedness (other than real property business debt) is excluded from gross income, corresponding reductions must be made to the taxpayer's tax attributes. See Checkpoint

Blog

Taxation of the Bankruptcy Estate

Steven Walker 4th March 2022

The taxation of the bankruptcy state is not always obvious, and below are the key highlights for debtors to keep in mind. The IRS is well versed with these rules, and running afoul can lead to tax controversy issues, such

Publication

Handling Audits of Delinquent International Information Returns

Steven Walker May 25, 2020

This article examines strategies for handling an IRS investigation of international returns, and recommends ways to improve audits, foster taxpayer compliance, and uphold taxpayers’ rights.

Tax Controversy and Litigation

Blog

IRS Provides Temporary Relief for Taxpayers in Audits and Collections – Certain Activities Continue

Steven Walker 18th June 2020

On March 25, 2020, the Internal Revenue Service issued a news release announcing the People First Initiative. See IR-2020-59 (03-25-2020). The new initiative is aimed at helping taxpayers by providing relief on a variety of issues ranging from easing payment

Tax Controversy and Litigation

Upcoming Event

COVID-19 Update

Steven Walker 15th May 2020

Due to the COVID-19 pandemic, the firm is currently not scheduling any in-person events or speaking engagements. Please watch for updates regarding webinars, and other virtual engagements to learn more about us and the services we provide. The firm remains

Blog

District Court Lowers Penalties for Form 3520 Nonfiling to Zero

Steven Walker 7th May 2020

A recent taxpayer-friendly court decision from New York is worth reviewing for practitioners who handle late-filed Forms 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, for offshore trusts. The federal district court struck

Tax Controversy and Litigation

Blog

Do You Own a Foreign Corporation? IRS Presses Form 5471 Penalties

Steven Walker 8th April 2020

The San Francisco Bay Area is a focal point for international business. It is common for individuals to start a business, and later expand operations overseas to Europe or Asia. There is no prohibition in expanding overseas, but U.S. persons

Tax Controversy and Litigation

Blog

Are You an Owner or Beneficiary of a Foreign Trust or Receive a Foreign Gift or Bequest?

Steven Walker 2nd April 2020

The Government is pressing taxpayers with large civil penalties for late-filed Forms 3520. The IRS may assert the penalty in the context of a foreign trust or if you are a U.S. person who received foreign gifts of money or

Tax and Estate Planning

Blog

Key Moves in Difficult Times -Options for Taxpayers Facing Economic Uncertainty

Steven Walker 29th March 2020

We are in tough economic times. A record number of Americans have filed for unemployment benefits, and business owners are forecasting a significant drop in profits, as they seek to cut costs and penny-pinch to make it through the year.

Tax Controversy and Litigation

Blog

Relief for Taxpayers Affected by Coronavirus Disease 2019 (COVID-19) Pandemic

Steven Walker 21st March 2020

The recent COVID-19 pandemic has already had a significant effect on our personal and professional lives. Between states and localities implementing “shelter-in-place” orders, commercial activity grinding to a near halt, and the stock market seeing massive losses, the United States

Tax Controversy and Litigation

Blog

Congress Passes New Law, Allows Early Distribution from IRAs for COVID-19

Steven Walker 19th March 2020

A new law allows individuals under the age of 60 to withdraw up to $100,000 from their IRAs without facing an early distribution penalty. As Congress begins to implement the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in the

Tax Controversy and Litigation

Blog

Avoiding Civil Penalties for Failing to File or Pay

Steven Walker 15th January 2020

The IRS can assess a penalty for the failure to timely file a tax return on or before the due date, and a penalty for failing to timely pay the balance shown on a return. See § IRC 6651(a)(1) and

Tax Controversy and Litigation

Blog

Best Practices for Making Tax Payments – Don’t Send in a Check

Steven Walker 1st October 2019

Both the IRS and the FTB offer the ability to make electronic payments online. Therefore, the days of manually writing a check and mailing it to the taxing agency via certified mail make little sense, given that secure options exist

Tax Controversy and Litigation

Blog

Words of Wisdom —Always File on or Before the Deadline

Steven Walker 23rd September 2019

Taxpayers should always file their tax return on or before the due date and confirm with their tax return preparer that the return was timely filed. This means obtaining a copy of the electronic receipt that the accountant received after

Tax Controversy and Litigation

Blog

IRS and Virtual Currency

Steven Walker 18th August 2019

IRS Has Begun Sending Letters to Virtual Currency Owners Advising Them to Pay Back Taxes, Files Amended Returns; Part of IRS' Larger Efforts The Internal Revenue Service has begun sending letters to taxpayers with virtual currency transactions that potentially failed

Tax Controversy and Litigation

Blog

California Supreme Court Finds Workers are Employees and Not Independent Contractors, Decision Has Significance for Businesses and May Impact Employment Tax Audits

Steven Walker 14th May 2019

In Dynamex Operations West, Inc. v. Superior Court (Ct.App. 2/7 B249546, Los Angeles County Super Ct. No. BC332016), the California Supreme Court issued a critical decision on the question whether an individual worker should correctly be classified as an employee,

Tax Controversy and Litigation

News Featured

IRS Announces New Compliance Campaigns

Steven Walker 14th May 2019

On April 16, 2019 the IRS Large Business and International division (LB&I) announced the approval of three additional compliance campaigns. Two of these campaigns, the Captive Services Provider Campaign and the Loose Filed Forms 5471 Campaign, are of importance to

Tax Controversy and Litigation

Publication

Comments and Proposed Guidance on the IRS’ Revocation or Denial of Passports

Steven Walker May 5, 2019

This paper was presented to the IRS in Washington, D.C. at the California Lawyers Association, Taxation Section, 2019 Washington D.C. Delegation. The proposal was prepared by Steven L. Walker and Adria Price, members of the Tax Procedure & Litigation Committee.

Tax Controversy and Litigation

Blog

IRS Updated Voluntary Disclosure Practice

Steven Walker 26th March 2019

On November 20, 2018, the IRS issued a Memorandum addressing the process for all voluntary disclosures (both domestic and foreign) following the close of the Offshore Voluntary Disclosure Program on September 28, 2018. In March 2019, the IRS released new

Tax Controversy and Litigation

Publication

Is Your Client the Subject of an FBAR Examination?

Steven Walker January 31, 2019

Has a client received a letter from the IRS asking to schedule an appointment to examine the client's compliance with the requirement to file FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR)? Although an FBAR examination is

Tax Controversy and Litigation

Blog

Recent Developments – IRS Enforcement Priorities

Steven Walker 31st December 2018

Steven L. Walker recently attended the 34th Annual National Institute on Criminal Tax Fraud and the Seventh Annual National Institute on Tax Controversy, sponsored by the ABA Section of Taxation and ABA Criminal Justice Section. The conference, which is held

Tax Controversy and Litigation

Publication

Income Taxation of Trusts in California

Steven Walker July 26, 2018

Recently, in a closely watched case, the California Superior Court in San Francisco rejected the Franchise Tax Board’s long-standing approach to the taxation of trusts. The court determined that all income, including California-source income, is subject to the apportionment formula

Tax and Estate Planning

Publication

IRS Closer to Obtaining Virtual Currency Records

Steven Walker January 11, 2018

On Nov. 30, 2017, after a lengthy summons enforcement proceeding, a federal district court issued an order granting in part and denying in part the IRS's petition to enforce the summons. The court's order (Coinbase, Inc., No.17-cv-01431-JSC (N.D. Cal. 11/28/17)

Tax Controversy and Litigation

Blog

2017 Tax Reform – Last Minute Year-End Moves in Light of Tax Cuts and Jobs Act

Steven Walker 27th December 2017

Congress is enacting the biggest tax reform law in thirty years, one that will make fundamental changes in the way you, your family and your business calculate your federal income tax bill, and the amount of federal tax you will

Tax Controversy and Litigation

Publication

IRS New Compliance Campaigns and International Audits of Individuals

Steven Walker January 2018

On November 3, 2017, the IRS announced the roll out of 11 Large Business and International (LB&I) Compliance Campaigns.LB&I previously announced the roll out of its first 13 campaigns on 1/31/17. In an effort to make the best use of

Tax Controversy and Litigation

Blog

New Appeal Procedures – California Franchise Tax Board

Steven Walker 14th November 2017

Starting January 1, 2018, appeals of Franchise Tax Board (FTB) decisions will be heard by the Office of Tax Appeals. Created by Assembly Bill 102, known as the Taxpayer Transparency and Fairness Act of 2017, OTA will replace the appellate

Tax Controversy and Litigation

Blog

IRS Announces Rollout Large Business and International Compliance Campaigns

Steven Walker 3rd November 2017

On November 3, 2017, the IRS announced the roll out of 11 Large Business and International Compliance Campaigns (LB&I). LB&I had announced on Jan. 31, 2017, the roll out of its first 13 campaigns to be implemented. (See https://www.irs.gov/businesses/large-business-and-international-launches-compliance-campaigns) According

Tax Controversy and Litigation

Blog

Can the IRS Take My Passport?

Steven Walker 1st October 2017

Are you about to embark on a business trip to Latin America or a well-needed family vacation to Italy or Paris? Do you work for a technology company and frequently travel overseas to Singapore or other Asian countries for work?

Tax Controversy and Litigation

Blog

Recent Case Sheds Light on FBAR Willfulness Penalty

Steven Walker 26th May 2017

In Bedrosian v. United States, Dep’t of the Treasury, IRS, No. 15-5853, 2017 U.S. Dist. LEXIS 56535 (E.D. Pa. Apr. 13, 2017), Arthur Bedrosian opened a bank account at UBS in Switzerland in the early 1970s, and for years, he

Tax Controversy and Litigation

Blog

Foreign Account Tax Compliance Act (FATCA) – Form W-9

Steven Walker 23rd January 2017

Have you been contacted by a foreign bank and asked to provide documentation to confirm your status as a U.S. person or foreign person pursuant to the Foreign Account Tax Compliance Act (FATCA). Are you being asked to provide a

Tax Controversy and Litigation

Blog

Offshore Tax Compliance

Steven Walker 18th January 2017

Have you received a letter from the Internal Revenue Service (IRS) asking you to come in for an interview? Are you the subject of an IRS examination or target of an IRS criminal case? We are likely to see more

Tax Controversy and Litigation

News Featured

Form W-9 or W8-BEN? How to Classify a Dual Resident Taxpayer

Steven Walker May 18, 2015

Mr. Walker was invited to Washington D.C. by the Taxation Section, State Bar of California, to present a position paper regarding how to classify a dual resident taxpayer (file a Form W-9 or a Form W8-BEN). The paper was presented

Tax Controversy and Litigation

Blog

Employment Tax Enforcement

Steven Walker 5th May 2016

The Department of Justice has stepped up is prosecutions on the criminal and civil enforcement side against employers who pyramid (business withholds taxes from employees but intentionally fails to remit them to the IRS over several quarters), pay employees in

Tax Controversy and Litigation

Publication

Is My Case Criminal? Civil Fraud vs. Tax Evasion

Steven Walker December 21, 2015

This article examines the concept of willfulness in the context of international tax enforcement, focusing on the factors that can transform a civil tax case into a criminal tax matter.

Tax Controversy and Litigation

Publication

IRS Provides Guidance on FBAR Penalties

Steven Walker November 5, 2015

Tax professionals who advise clients on issues with FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), should become familiar with IRS Memorandum SBSE-04-0515-0025, “Interim Guidance for Report of Foreign Bank and Financial Accounts (FBAR) Penalties” (5/13/15). The

Tax Controversy and Litigation

Publication

A Guide to the IRS’ New Streamlined Offshore Compliance Program

Steven Walker August 14, 2014

On June 18, the IRS announced major changes to its offshore voluntary compliance programs, providing new options to help taxpayers residing both overseas and in the United States. The changes are intended to give thousands of people a new avenue

Tax Controversy and Litigation

Publication

Credit Suisse’s Impact on Its U.S. Clients

Steven Walker August 11, 2014

In the government’s criminal investigation and charging of Credit Suisse AG with helping U.S. taxpayers evade taxes, the IRS used a new and little-known provision of the code, section 6201(a)(4), to ensure that the Swiss bank paid $666.5 million in

Tax Controversy and Litigation

Publication

The Modification and Compromise of Restitution Orders in Criminal Tax Cases

Steven Walker May 5, 2014

Mr. Walker was invited to Washington D.C. by the Taxation Section, State Bar of California, to present a position paper regarding The Modification and Compromise of Restitution Orders in Criminal Tax Cases. The paper was presented to the Internal Revenue

Tax Controversy and Litigation

Publication

Can a Taxpayer Refuse an IRS Summons?

Steven Walker April 24, 2014

During the course of an IRS investigation, the IRS has the authority to issue an administrative summons seeking records and testimony (Sec. 7602). The IRS may summons records, whether they are in the taxpayer’s or a third party’s possession, including

Tax Controversy and Litigation

Publication

Department of Justice’s Swiss Bank Program May Put Some U.S. Taxpayers At Risk

Steven Walker March 13, 2014

On Aug. 29, 2013, the U.S. Department of Justice (DOJ) and the Swiss Federal Department of Finance signed a joint statement aimed at resolving tax compliance issues unique to Switzerland. As part of this combined enforcement effort, the DOJ announced

Tax Controversy and Litigation

Publication

IRS Changes Policy, Relaxes Rules for Innocent Spouse Relief

Steven Walker November 25, 2013

A recent revenue procedure and chief counsel notice reflect significant IRS policy and procedural changes for claims under section 6015(f). The IRS has relaxed the eligibility conditions for innocent spouse relief, and for the first time, there is now uniform

Tax Controversy and Litigation

Publication

A Proposed Voluntary Disclosure Program for the California Franchise Tax Board

Steven Walker June 10, 2013

This paper provides a framework for discussing the implementation of a voluntary disclosure program for individuals and businesses with the California Franchise Tax Board. The Internal Revenue Service has had a voluntary disclosure program for more than half a century,

Tax Controversy and Litigation

Publication

IRS will not let investors off the hook in overvaluing assets

Steven Walker April 11, 2013

Individuals should exercise prudence in evaluating transactions designed to generate paper losses on federal income tax returns—so-called tax shelters. Taxpayers should focus on the value of the underlying asset reported on the return and ask whether that valuation makes sense.

Tax Controversy and Litigation

Publication

What Happens When an Individual Fails to Report Foreign Bank Accounts

Steven Walker February 15, 2013

This article examines what can happen to an individual who fails to report foreign bank accounts on FinCEN Form 114 to the Internal Revenue Service.

Tax Controversy and Litigation

Publication

A Simplified Procedure to Allow Late Filed Forms 8891 for Individuals With Canadian Retirement Plans and Relief From FBAR Penalties for Foreign Retirement Accounts

Steven Walker January 2, 2013

An individual living in the United States may own a retirement plan from another country. The Internal Revenue Service ("IRS") takes the position that certain foreign retirement accounts are foreign trusts and subject to the onerous reporting requirements of section

Tax Controversy and Litigation

Publication

Practitioners’ Views of the Tax Court. Pro Bono Legal Services Provided in California to Taxpayers with Docketed Cases Before the United States Tax Court

Steven Walker May 6, 2012

Mr. Walker was invited to Washington D.C. by the Taxation Section, State Bar of California, to present a position paper regarding practitioners’ views of the United States Tax Court. The paper was presented during a luncheon meeting to Judges of

Tax Controversy and Litigation

Publication

A Rule May Change the Way the IRS Pursues Depositions in United States Tax Court

Steven Walker October 2, 2010

CPAs often find themselves representing individuals and businesses being audited by the IRS, as well as negotiating settlement of tax disputes in cases pending before the IRS Office of Appeals. Clients rely on their CPAs, even after a Tax

Tax Controversy and Litigation

Publication

The Application of Section 482 Transfer Pricing Principles to Financial Transactions, Including Guarantees and Credit Support Arrangements

Steven Walker August 2, 2010

The issue is the proper tax treatment of a financial guarantee from a parent company to a wholly-owned subsidiary for Federal income tax purposes. The Service issued Treas. Reg. § 1.482-9 to provide guidance with respect to controlled services transactions,

Tax Controversy and Litigation