1408, 2019

The IRS Remains Skeptical of Syndicated Conservation Easements

By |August 14th, 2019|alliantNational Blog, Resource Library|0 Comments

It is no secret that the IRS has been actively looking at syndicated conservation easements in recent years. While a number of courts have issued opinions regarding the requirements for a valid conservation easement, there is little to date regarding the validity of syndicated easement deals. However, with Notice 2017-10, the IRS made certain syndicated conservation easement deals “listed transactions,” and announced that it was concerned over the manner in which these syndications worked and were marketed.

Conservation Easements

When established correctly and for proper purposes, a conservation easement allows a taxpayer to take a deduction for donating an easement on real property to a qualified organization, while continuing to own and enjoy the property. However, not all conservation easements are created equal. As evidenced by both the Notice and House and Senate Bills, the government is skeptical of transactions in which a taxpayer quickly receives a charitable […]

708, 2019

Launching Libra—Regulatory Reaction to Facebook’s Anticipated New Currency

By |August 7th, 2019|alliantNational Blog, Resource Library|0 Comments

In an age where the concept of “currency” has become a somewhat nebulous concept for consumers and regulators alike, Facebook just added to the complexity of the landscape by introducing a new type of currency to the market—Libra. On June 19th, Facebook announced its vision for a new cryptocurrency by publishing a White Paper to answer questions about what the currency is, what the currency is not, and how the currency plans to launch in a way different than other, more well-known cryptocurrencies, like Bitcoin and Ethereum.

According to the White Paper, the mission of Libra is to form an accessible global currency, so that no matter who someone is, where someone lives, or how much someone makes, individuals can access financial services. As such, Libra “is designed to be a stable digital cryptocurrency that will be fully backed by a reserve of real assets — the Libra Reserve — and supported by a competitive network […]

3107, 2019

Cryptocurrency – The IRS Efforts to Revamp Immediate Enforcement

By |July 31st, 2019|alliantNational Blog, Resource Library|0 Comments

In a statement issued on July 26, the IRS has announced that it will send letters to more than 10,000 taxpayers who participated in virtual currency transactions. These letters are not the long-awaited guidance the IRS Commissioner promised on May 16, 2019; it is an apparent ramp-up in the Service’s efforts to encourage taxpayers to report virtual currency transactions and pay the resulting tax, interest, and penalties.

As you may recall, the IRS in Notice 2014-21 stated that virtual currency is property for federal tax purposes and provided guidance on how general federal tax principles apply to virtual currency transactions. These educational letters follow these general tax principles.

According to the statement, the recipients should expect to receive one of three letters titled “Reporting Virtual Currency Transactions.” Depending on the form (6173, 6147, 6147-A), the letters have all the markings of a generic mailing campaign, but some are personally targeted and do promise enforcement […]

1607, 2019

The Curious Case of Cryptocurrency

By |July 16th, 2019|alliantNational Blog, Resource Library|0 Comments

Cryptocurrency is…complicated. You’ve definitely heard about it, and probably know someone who has either lost big or became an overnight millionaire because of it. Buzz words and terms get thrown around constantly like “blockchain” and “mining”, but what exactly is cryptocurrency? And why is IRS’ treatment of the new currency shrouded in so much mystery?

As a decentralized, virtual form of currency that only exists in the digital world, cryptocurrency is truly unique. There is no dealing with tangible crypto-dollars or crypto-cents, as well as no regulation or oversight by any national government or central bank.

Cryptocurrency exists in an exclusively virtual state and relies on a technology known as blockchain to keep it secure and transferrable. Cryptocurrencies are created through a “mining” process, whereby miners use powerful computers to authenticate transactions in a digital ledger of transactions. People can trade cryptocurrency […]

307, 2019

Recent Developments in the Captive Insurance Space

By |July 3rd, 2019|alliantNational Blog, Resource Library|0 Comments

We at alliantNational wanted to discuss some recent developments with regard to the captive insurance space – specifically, with respect to IRC § 831(b) micro-captives. However, let’s begin by walking through the definition of captive insurance.

When businesses can’t find affordable commercial insurance to cover their risks, they may establish an insurance company of their own to do it for them. This company is what we refer to as a captive insurance company. The Internal Revenue Code provides that captives earning less than $2.2 million in premiums may make an election to only have their investment income taxed. These are what are referred to as 831(b) captives or “micro-captives”.

Due to their increasing popularity and favorable tax treatment, our friends at the IRS have increased their scrutiny of micro-captives. Following the rulings in Avrahami v. C.I.R., Reserve Mechanical v. C.I.R., and most recently Syzygy Insurance v. C.I.R. (all U.S. Tax Court cases), taxpayers […]

3005, 2019

Court of Appeals Denies Injunction Action against Notice 2016-66

By |May 30th, 2019|alliantNational Blog, Resource Library|0 Comments

On May 22, 2019, the Sixth Circuit Court of Appeals upheld the District Court’s holding that Notice 2016-66 does not violate the Administrative Procedure Act (APA). The District Court held that it didn’t have subject matter jurisdiction over the case because the Anti-Injunction Act and Declaratory Judgment Act bar law suits seeking to restrain the Government’s ability to assess and collect tax. The Sixth Circuit Court of Appeals agreed – holding that while the IRS “ not have a great history of complying with APA procedures, having claimed for several decades that their rules and regulations are exempt from those requirements,” the Court still does not have subject matter jurisdiction over suits seeking to enjoin the assessment or collection of taxes.

The original suit, filed by CIC Services, Inc., sought to enjoin the IRS from enforcing the disclosure requirements under Notice 216-66. After the District Court held that it didn’t have subject matter jurisdiction in […]

1804, 2019

Tax Court Issues section 831(b) Ruling in Syzygy Insurance

By |April 18th, 2019|alliantNational Blog, Resource Library|0 Comments

On April 10th, The Tax Court issued its latest opinion involving micro-captives. In mostly finding for the IRS, the Court maintains the analytical framework set forth in its opinions in Avrahami (2017) and Reserve Mechanical (2018). It also provides a window into what happens when the IRS invalidates the 831(b) election.

The Court found that Syzygy, a Delaware captive insurance company, failed to establish that it was an insurance company for tax purposes on the grounds that it failed to properly distribute risk and that the arrangement was not “insurance in the commonly accepted sense.”

In its analysis of Syzygy’s risk distribution, the Court relied on Avrahami and Reserve, focusing on aspects of the risk pool.  The insured entities in this case have 400 employees and operate in six different locations. Interestingly, the Court, however, did not analyze whether there were a sufficient number of independent risk exposure units to establish risk […]

2702, 2019

alliantNational Amicus Brief Helps Pave Way to Victory for Taxpayers at Ninth Circuit

By |February 27th, 2019|Resource Library|0 Comments

alliantNational is proud to announce that the U.S. Court of Appeals for the Ninth Circuit has ruled in favor of a taxpayer couple supported by the firm, saying the IRS failed to give the couple a meaningful opportunity to volunteer certain tax records on their own.

The Court determined that the Internal Revenue Service hadn’t provided sufficient notice to Joseph and Patricia Baxter when it issued a summons to the California Supreme Court seeking various documents as a part of the agency’s National Research Program.

The leadership of alliantNational, as parties of the associated law firm Zerbe Miller Fingeret Frank & Jadav LLP, submitted an amicus brief on behalf of the couple, arguing that the tax code and legislative history required the IRS to give the couple an adequate chance to respond to its document request before contacting a third-party.

The Ninth Circuit ruled on February 26 that the IRS had […]

1402, 2019

Writing the Playbook: alliantNational’s Miller and Amin Contribute to ABA’s Captive Insurance Handbook

By |February 14th, 2019|Resource Library|0 Comments

alliantNational’s own Steven T. Miller and Meeren Amin co-authored a chapter in the American Bar Association’s 2018 Captive Insurance Deskbook for the Business Lawyer. The book helps attorneys navigate the often-murky paths of captive insurance companies and offers suggestions on whether a captive is a suitable option for a business owner.

Miller and Amin co-authored a chapter on “Captive Insurance Tax Controversy,” where the two discussed how the Internal Revenue Service conducts audits of captives, the appeals process if the agency determines a captive has violated pertinent law, how to prepare for possible litigation and effective pre-audit strategies for managing a captive.

The book’s publication comes at a time when most Fortune 500 companies, as well as many small to mid-sized businesses and tax-exempt organizations are involved with captives. It features a wide-range of tax controversy professionals and serves as a comprehensive outline for any business that is looking into the […]

1309, 2018

Syndicated Conservation Easements Included in Next Wave of LB&I Compliance Campaigns

By |September 13th, 2018|Resource Library|0 Comments

On September 10, the Large Business and International Division (LB&I) of the IRS announced five additional compliance campaigns. Initially announced in January 2017, LB&I’s Compliance Campaigns are designed as an issue-based approach to address areas of tax that the Service has identified as having a high risk of compliance issues. Among the items listed in this newest rounds of campaigns, taxpayers will find Syndicated Conservation Easements. All in all, the Service has currently identified 45 areas of enforcement.

A conservation easement is a donation to certain tax-exempt and government organizations of a right in real property, made by a taxpayer for a conservation purpose. When established correctly and for proper purposes, a conservation easement allows a taxpayer to take a deduction for donating an easement on real property to a qualified organization, while continuing to own and enjoy the property.

However, not all conservation easements are created equal. The IRS has been […]

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