Author Archives: David L. Silverman, J.D., LL.M. (Taxation)

U.S. v. Adlman, 95-2 USTC

The Court of Appeals for the 2nd Circuit has affirmed a district court decision finding the attorney-client privilege inapplicable, and enforcing an IRS summons directed to Sequa Corporation (Sequa), to produce a memorandum prepared by Arthur Anderson (AA) at the … Continue reading

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Taxpayer Bill of Rights 2 (May 1996)

New legislation governing the relationship between the IRS and the taxpayer has been approved by the House Ways and Means Committee. Given its wide congressional support, enactment seems likely, perhaps by as early as by next fall. The Taxpayer Bill … Continue reading

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2007 Regs., Rulings and Pronouncements

A. New Regs Govern Estate Deductions All federal circuits, except the Eighth, have long adhered to the view that post-mortem events must be ignored in valuing claims against an estate. Ithaca Trust Co. v. U.S., 279 U.S. 151 (1929) held … Continue reading

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Tax-Exempt Entities

Often referred to as “nonprofit” organizations, certain corporations and trusts are exempt from federal income tax. The earliest manifestation of tax exemption in common law traces to the British Statute of Charitable Uses in 1601. Most present exemptions in Subchapter F, found in IRC §§ 501-528, were enacted as part of the Revenue Act of 1894. Continue reading

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Defining the Scope of Trustee Powers

A.     Introduction Early predecessors of modern trusts appeared in connection with land conveyances in England. Prior to the Statute of Wills, enacted by Parliament in 1540, it was impossible for a landowner to devise title in land to heirs. Moreover, … Continue reading

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Buy-Sell Agreements Facilitate Family Business Planning

A traditional buy-sell agreement may enable the estate of an owner of a closely held business to raise cash to fund testamentary bequests and pay estate taxes. The agreement may also be effective in valuing an estate for tax purposes. … Continue reading

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Qualified State Tuition Programs Enhanced

IRC Section 529 plans (“529 plans”) permit parents – or anyone else – to establish and fund an account administered by individual states to pay future college expenses. Like a Roth IRA, contributions are not deductible, but neither is investment … Continue reading

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Determining Whether Exchange Property is of “Like Kind”

A.     Introduction Determining whether exchange property is of “like kind” necessitates a review of IRS pronouncements, decisional case law, and the Regulations.  Regs. § 1.1031(a)-1(b) provides that the words “like kind” [h]ave reference to the nature or character of the … Continue reading

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Rolling GRATs

A GRAT is a grantor trust for a term of years in which the grantor retains a fixed annuity interest and makes a gift of the remainder interest. The present value of the remainder interest is the amount of the … Continue reading

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IRS and NYS Announce Disaster Relief

In the wake of the terrorist attacks, the IRS has announced that all taxpayers in the five boroughs of NYC, as well as other taxpayers “directly affected” by the attacks, regardless of where they reside, will be entitled to tax relief. Continue reading

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Tax and Estate Planning with S Corporations

A.     Introduction Although LLCs and partnerships possess attractive tax attributes, the fact remains that in 2004, 48.1 percent more returns were filed by S corporations than were filed by entities taxed as partnerships. An S corporation is a domestic small … Continue reading

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Senators McCain and Obama Offer Differing Tax Visions

Senators McCain and Obama offer starkly differing tax philosophies. Mr. Obama favors a middle-class tax cut but not “a permanent tax cut for Americans who don’t need them.” Citing the inequity of  hedge fund managers who pay less tax than … Continue reading

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Repeal Sharpens Need for Estate Planning

On January 1, 2002, the gift and estate tax exemption amounts will each increase to $1 million. The estate and GST exemptions will increase again to $1.5 million in 2004, to $2 million in 2006, and to $3.5 million in … Continue reading

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Unanimous Supreme Court Bars Tax Refund Suit

Reversing the Court of Federal Claims, the Supreme Court held that the Claims Court was without jurisdiction to hear the taxpayer’s refund claim since the taxpayer had not complied with refund procedures articulated in the Internal Revenue Code. U.S. v. … Continue reading

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Recent IRS Developments — June 2008

Steven T. Miller, Commissioner of the IRS Tax Exempt and Government Entities Division, stated that the IRS will ensure that charities are furthering a charitable purpose in a manner commensurate with their financial resources. Public charities, unlike private foundations, are … Continue reading

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