tag:blogger.com,1999:blog-1519969502186924526.post55573718517698682..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: The Supreme Court Blesses Taxpayers Sheltering and Hiding Income from Six-Year Statute of Limitations (4/25/12)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1519969502186924526.post-24324018775905343652012-05-02T17:05:20.978-05:002012-05-02T17:05:20.978-05:00It's your forum, and I certainly appreciate yo...It's your forum, and I certainly appreciate your letting me and others comment.<br /><br />My perspective is that its not "technocrat[ic]" for the Court to follow the law as written, and to leave it to Congress to fix things if the effect on the Treasury is unfortunate. Congress spoke of an omission of an item of gross income, not an understatement of tax due. There is a difference.<br /><br />That these taxpayers were "well-heeled" and "knew better" is besides the point. It is the function of statutes of limitations to defeat stale calims, even if those claims were valid. You don't need a statute of limitations to defeat a baseless claim.Elliot Silvermanhttp://www.wmllp.com/Attorneys/Elliot-Silverman.shtmlnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-53079591431047138332012-05-02T14:13:44.712-05:002012-05-02T14:13:44.712-05:00My point is that the Supreme Court had a choice of...My point is that the Supreme Court had a choice of interpretations. It could choose one that is consistent with good administration of the tax laws. Or it could bury its head in the sand and come up with a technocrat interpretation of the law.<br /><br />The only thing that surprised me is that Justice Breyer voted with the majority. While I don't think this was or should have been a political opinion, I always thought Justice Breyer could think about consequences. He could not in this case and even wrote the opinion justifying his position. (OK, I know he had to accommodate 4 others to make sure his was a majority opinion rather than a minority opinion.)<br /><br />Still, it seems to me if we are going to honor the Chevron notion that deference should be given to the agency's administration of complex laws, this was the case to do it in. Basically, to bottom line it, these taxpayer's knew better. They were well-heeled and well-advised and for them to skate on their obligations to this country is outrageous. Hence, having the tools to deal with their blatant attempts to hide their raids on the fisc was and should have been recognized as appropriate.<br /><br />The Supreme Court had a perfectly legitimate path -- fully consistent with the administration of the tax laws -- to get there and chose not to.<br /><br />I share the conclusion reported in today's papers that the public's view of the Supreme Court is at its lowest. My perspective is very narrow -- only in tax cases. But, in my mind, the Supreme Court has shown a startling propensity to come up with very bad decisions in the tax context.<br /><br />The consensus of the bar when Frank Lyon was decided was that Frank Lyon was wrong and wrong-headed. Think about how much havoc the Frank Lyon decision imposed on this country -- and how much the fisc lost as a result of it. Indeed, I dare say the son-of-boss cases probably would not have even been imagined except for Frank Lyon which breathed false hope into every goofy tax shelter known to mankind. The notion was that if Frank Lyon worked, anything with a lot of paper should work.<br /><br />Hopefully, the Home Concrete decision will be viewed as a one-off decision bringing no more havoc than it brought in the confines of the precise issue decided. I think the majority opinion was crafted that way. But I also think that the majority opinion in Frank Lyon was drafted to try to limit it to the facts of the case, but as we all know it took on a life of its own in many contexts.<br /><br />Thanks for your comment. I appreciate your comment. I just disagree.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-54238452840067943632012-05-02T12:58:44.988-05:002012-05-02T12:58:44.988-05:00Given that the Supreme Court's decision was bo...Given that the Supreme Court's decision was both consistent with the plain language of the statute and controlled by binding precedent, I fail to understand the need for the snarky remark that "this is another case in a line of Supreme Court cases where the Supreme Court proves once again that tax cases are too important to let the Supreme Court play with them."Elliot Silvermanhttp://www.wmllp.com/Attorneys/Elliot-Silverman.shtmlnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-10691209785642446402012-04-27T17:23:26.642-05:002012-04-27T17:23:26.642-05:00http://www.forbes.com/sites/peterjreilly/2012/04/2...http://www.forbes.com/sites/peterjreilly/2012/04/27/supreme-court-has-taken-ammunition-from-irs-in-son-of-boss-cases-time-to-fix-bayonets/<br /><br />You really inspried me. I would really appreciate it if you stopped by forbes.com and commented. One guy whose clients are saving 40 million from the decision said that I "miised the point" becaus I was upset about the one sided entries winning the day.<br /><br />I do like the decision standing alone since there are situations where basis can be a little sketchy and you should be able to rest easy after three years, but of course that is not what the IRS was going after in these cases.Peter Reilly CPAhttps://www.blogger.com/profile/10199307021804040667noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-69483908465691002162012-04-27T08:06:55.970-05:002012-04-27T08:06:55.970-05:00Thanks, Patrick. Very thoughtful!
Jack TownsendThanks, Patrick. Very thoughtful!<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-58525412011148522132012-04-26T20:01:36.391-05:002012-04-26T20:01:36.391-05:00Having read the decision, I think this was the rig...Having read the decision, I think this was the right answer on statutory interpretation (the words lead one to a 3 year statute), but wrong result on the merits (my dog knows that 3 years is not enough time to discover, audit and prosecute basis inflation shelters). Yet another example of hard cases making bad law.<br /><br />To Jack's point, the IRC is totally biased in favor of those who can pay a lot for aggressive tax advise. The IRS is outgunned and outmanned, and the Supreme Court continues to sink the ship of state by poking increasingly larger holes in the keel.<br /><br />This is a multi-billion loss for Treasury. Jack is right that a condition of any of these ridiculous shelter opinions is a representation to the opinion writer, a representation prepared by the opinion writer with an eye, and perhaps a nod, to his or her insurer, that there was a "profit motive" independent of tax savings considerations for the transaction. Hell, one wouldn't do the deal if that were true!<br /><br />In general, I have noticed a trend in American society, also reflected in tax planning, of what I will call "nuance ad absurdum." We are asked on a scale of say 1-5 how we liked a movie say, and grade it accordingly. I am not a black and white type guy, never was or will be TG. I like nuance very much, but I have never, and I mean never, watched a movie that I either liked or didn't like, no kinda oks. But most importantly I try to understand why I did or didn't like such and such a movie. And on those scales I give a movie 1 (why isn't there a 0) or 5. Its always that simple after a little thought.<br /><br />After reflecting on the subject of tax shelters for more time than was necessary or healthy, it seems to me that, as with the English common law system, and European civil systems also (the US is actually a hybrid of both), a deal either works, or it doesn't. I have reviewed 1000s of deals for their tax implications and for planning purposes Except for one of the thousands, I always knew whether it worked or didn't, after a little thought. <br /><br />But with layers of opinions; reporting position, substantial authority, more likely than not, should, will, etc., I always had an option to render an opinion even if I knew a transaction or scheme did not work, if I wanted to and charge the client. For the record, only once when I was forced to do so under threat of termination, did i give a substantial authority opinion for a transaction that I knew didnt work, but the facility of others to do so always amazed me. Perhaps too little work chasing too many tax professionals?<br /><br />It seems to me that were the opinion process reduced to "it works" or "doesn't work", with severe penalties for being wrong, much of the tax shelter mess would be eliminated. In other words, true professionals always know what the right answer is, and others shouldn't be in the game. <br /><br />And of course that would have the interesting benefit of reducing the possibility of the Supreme Court mucking things up, in a completely confusing and incoherent fashion.<br /><br />But it's late and this ain't Kansas.PATRICK CARMODYnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-81315293632256159572012-04-26T09:53:44.848-05:002012-04-26T09:53:44.848-05:00I wish I had been the first forbes contributor to ...I wish I had been the first forbes contributor to post on Home Concrete, but I stayed up late and got this in<br /><br />http://www.forbes.com/sites/peterjreilly/2012/04/25/supreme-court-takes-break-from-obamacare-to-bail-1-out-of-abusive-shelters/<br /><br /><br />Those deals were really offensive to me as a CPA because they seemed to be based on one-sided entries. I hope the Service does go after them on the unlimited statute.Peter Reilly CPAhttps://www.blogger.com/profile/10199307021804040667noreply@blogger.com