Publications

Publications

Can a Taxpayer Refuse an IRS Summons?

By: Steven Walker

AICPA, The Tax Advisor

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 in the possession of the taxpayer’s business associates, acquaintances, prior employers, and even financial institutions (Internal Revenue Manual (IRM) §25.5.5.2). One exception to this sweeping rule is that the IRS may not issue a summons or commence an enforcement proceeding if the IRS has referred a criminal tax case to the Department of Justice (Sec. 7602(d)).  
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Department of Justice’s Swiss Bank Program May Put Some U.S. Taxpayers At Risk

By: Steven Walker

AICPA, The Tax Insider

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 a new program that is intended to provide a path for Swiss banks that are not currently under a DOJ Tax Division criminal investigation to obtain resolution of their status in connection with the DOJ’s overall investigations and to assist the DOJ in its law enforcement efforts.
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IRS Changes Policy, Relaxes Rules for Innocent Spouse Relief

By: Steven Walker

Tax Notes, Commentary Tax Practice

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 law in the Tax Court. A taxpayer obtains a de novo trial, and there is no deference given in court to the IRS’s innocent spouse determination. So even if a taxpayer does not prevail before the IRS, the Tax Court will give the case a fresh look. This article examines the recent policy changes and discusses issues that tax advisers...
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A Proposed Voluntary Disclosure Program for the California Franchise Tax Board

By: Steven L. Walker and Sanford I. Millar

State Tax Notes

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, and it provides a mechanism for taxpayers to get back into compliance by making a truthful, timely and complete disclosure, showing a willingness to cooperate, and making good faith arrangements to pay in full the tax, interest and penalties. Yet unlike the Internal Revenue Service, the California Franchise Tax Board has no similar procedure for voluntary disclosure communications.
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IRS will not let investors off the hook in overvaluing assets

By: Steven Walker

AICPA, Tax Insider

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. In an unusual move, the U.S. Tax Court recently overturned its precedent to side with the IRS and hold that an investor is not off the hook for steep penalties if valuation is wrong.  
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A Simplified Procedure to Allow Late Filed Forms 8891 for Individuals With Canadian Retirement Plans and Relief From FBAR Penalties for Foreign Retirement Accounts

By: Philip D. W. Hodgen and Steven L. Walker

California Tax Lawyer

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 6048 of the Internal Revenue Code of 1986, as amended (the "Code") and the penalties of Code section 6677, if a Form 3520 or Form 3520-A is not timely filed. Most taxpayers with interests in foreign retirement savings plans are unfamiliar with these requirements.
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Practitioners’ Views of the Tax Court. Pro Bono Legal Services Provided in California to Taxpayers with Docketed Cases Before the United States Tax Court

By: Robert S. Horwitz and Steven L. Walker

State Bar of California, Taxation Section

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

By: Steven L. Walker

California CPA Magazine

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 Court petition is filed, to provide tax advice with respect to litigating positions being taken in Tax Court and their likely tax consequences. A new Tax Court Rule, however, may change the way certain cases are handled before the IRS. Read More (PDF) »  
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The Application of Section 482 Transfer Pricing Principles to Financial Transactions, Including Guarantees and Credit Support Arrangements

By: Steven L. Walker

Tax Notes, Tax Analysts

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, but the regulations carve-out financial guarantees from the regulations’ applicability.3 This raises the question as to how to treat guarantees under Section 482. Because financial guarantees are relatively common transactions, taxpayers need specific guidance as to the proper tax treatment of guarantees for tax planning and compliance.
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