For many years, the Boyle rule established that the failure of a third-party accountant to file a tax return by its due date does not establish a taxpayer’s “reasonable cause” for the forgiveness of late-file penalties. But is the Boyle rule consistent with the realities of e-filing? For now, yes. In a 2020 Tax Court case, Padda, the court rejected a taxpayer’s claim that his accountant’s failure to electronically submit his tax returns on time…
Concerning the non-deductibility of expenses related to the Paycheck Protection Program (PPP), the IRS released updated guidance this month (November 2020). Under the new IRS guidance, a calendar year borrower who received a PPP loan in 2020, which loan has not been forgiven by the end of 2020, may not deduct expenses incurred with PPP loan proceeds if (i) the expenses are qualifying expenses under the PPP rules (i.e., qualifying payroll costs, mortgage interest, utility…
Following historically low examination rates in 2020, the IRS plans to ramp up tax audits of small businesses by about 50% next year (2021). The increase in audits will apply to both partnerships and pass-throughs, said the IRS. The audit net will be wide – from local mom-and-pop retail stores to technology startups to those business with historically low audit rates. To man these efforts, the IRS is hiring more than 50 specialized auditors to…
A 2020 District Court case in Texas tells us that the “timing” of filing an Innocent Spouse Request for relief is supremely important. In the Landers case, the taxpayer filed her Innocent Spouse Claim after an IRS bank levy had been sent to her banking institution. In effect, she filed her Innocent Spouse Claim during the 21-day period that the bank was holding her funds after receipt of the levy. She was attempting to stop…
Podiatrist Jailed for Participation in Kickback Scheme Prescribing Compounded Medications Solely to Obtain Kickbacks Dr. Alap Shah was convicted of participating in a Kickback scheme where he was paid for prescribing expensive compounded medications in United States Of America v. Alap Shah, No. 19-12319, United States Court Of Appeals For The Eleventh Circuit (November 24, 2020). He appealed the conviction based on what he and the government admitted was an erroneous instruction to the jury.…
The Development of the Implied Covenant of Good Faith and Fair Dealing See the full video at https://youtu.be/hNzPoyGxw2s The Covenant of Good Faith and Fair Dealing is a general assumption of the law of contracts, that people will act in good faith and deal fairly without breaking their word. When insurers use shifty means to avoid obligations or deny what the other party obviously understood was a violation of the duty of good faith. The…

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