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Fort Worth Tax Law Blog

Marital status and taxes, part 1: mortgage deductions

About a year ago, we devoted a post to the impact of marriage on taxes.

In that post, we asked whether there really is a "marriage penalty," by which married couples may end up paying more in federal income tax than they would have if they had filed separately. We noted that the answer depends on several factors, particularly the couple's income.

In this two-part post, we will look at two other aspects of how marital status affects taxes. Part one will look at the mortgage deductions for non-married partners. Part two will discuss the tax effects of separation or divorce.

Not paying energy-related taxes can result in evasion or fraud charges

As high-profile energy industry investor Morris Zuckerman can attest, failure to pay taxes on money earned through energy production can result in serious criminal tax evasion or fraud charges. The Zuckerman case is a complicated one, involving a number of years and myriad investments on behalf of his Manhattan-based M.E. Zukerman & Co. (MEZCO).

Zukerman's firm allegedly used false statements to accountants, backdated promissory notes, a fraudulent board resolution, shell corporations, family trusts and the purchase of high-value artwork in an attempt to evade taxes on more than $130 million in profits from the sale of a subsidiary company's stake in the infamous Cortez oil pipeline. He is facing federal criminal charges including tax evasion, wire fraud and obstructing the IRS relating to these actions and others that helped him avoid paying tens of millions of dollars in corporate and personal taxes.

Tax inversion transactions, part 2: Lawsuit challenges new rules

Let's continue the discussion of tax inversion transactions that we began in a post last week.
As we noted, transactions by which a U.S. company acquires a partner abroad and avoids U.S. taxes by reincorporating have attracted increasing attention from federal regulators.

Last spring, the Treasury Department put into effect new regulations to remove the tax benefits of these transactions.

In this part of the post, we will update you on a lawsuit filed against these rules by business groups.

How the IRS took down Al Capone

Everyone has heard of notorious U.S. mobster Al Capone. But few may realize that it wasn't his many crimes committed as a mob boss that landed him in federal prison - it was tax evasion.

For years, state and federal prosecutors tried to charge and convict Capone for various crimes - including murder, bootlegging and illegal gambling - without luck. That is when the government tried a different approach: They decided to go after Capone for tax evasion.

IRS is not just the tax collector; it is also the tax police

The Internal Revenue Service is much more than just the federal agency that collects taxes. It has broad power to investigate individuals and businesses for evidence of potential tax crimes like fraud or evasion involving tax preparation, bankruptcy, banking, gaming, health care, underreporting, employment taxes, identity theft, money laundering, tax avoidance schemes, failure to file returns and much more.

When the agency uncovers what it believes to be evidence of tax fraud or other tax crime, it may refer the matter for federal criminal prosecution.

Tax inversion transactions, part 1: background for the new rules

In a junior-high civics class, the roles seem so settled. The legislative branch makes laws, the executive branch enforces them and the judicial branch interprets them.
n practice of course, the interactions of the branches of government are often not so clear.

Consider, for example, the current controversy about new IRS rules on tax inversions. In this two-part post, we will discuss those rules and the situation they are responding to.

Another tax concern for ceratain expats: Social Security payments

For U.S. taxpayers who work abroad, keeping on the right side of regulations poses ongoing headaches and challenges.

Some American expatriates have given up their U.S. passports in response. Others have found foreign banks unwilling to deal with them, due to concerns about the compliance burdens of the Foreign Account Tax Compliance Act (FATCA).

In this post, we will inform you about yet another potential source of foreign-income problems: double taxation for payments into Social Security.

Bankruptcy court rules in long-running Wyly case

Litigated cases - involving tax or any other subject - can take a long time to unfold.

In this post, we will update you on a long-running Texas case involving tax fraud allegations. The case grew out of a federal investigation into offshore tax shelters set up by two brothers, Charles and Sam Wyly.

‘Structuring’ suspicions and seized assets: An IRS about-face?

Under the Bank Secrecy Act, $10,000 is the threshold amount for triggering various reporting requirements for cash transactions. The law is supposed to deter money laundering by big-time drug dealers, organized crime figures or terrorist groups.

Far too often, however, federal authorities accuse ordinary citizens of “structuring” their transactions, i.e., using numerous sub-$10,000 deposits to avoid the required reports. And to make matters worse, authorities often use civil forfeiture laws to seize assets from people suspected of structuring – even if no criminal charges are ever brought.

In this post, we will update you on a high-profile case of a Maryland dairy farmer who fought the government for four years to get at least part of his seized money back.

Self-employment taxes: 3 things to know

Self-employed workers have tax compliance challenges that other taxpayers do not.

The underlying reason for this fairly simple: workers who are considered self-employed for tax purposes have to pay their Social Security and Medicare taxes. You don’t have an employer withholding and paying it for you, but instead have to do it yourself, typically through quarterly estimated tax payments.

There are, however, many complexities involved with self-employment taxes. In this post, we will take note of three useful things to know.

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