Effectively Advocating for Taxpayers During Summons Interviews: “Potted Plant” vs. “Rambo” Representation, by Frank Agostino, Esq. & Joseph Stackhouse, Jr.

All attorneys must learn to strike a balance between sitting silently on the sidelines, “potted plant” advocacy, and acting like a loose cannon, “Rambo” advocacy. The potted plant metaphor dates back to a reference made by attorney Brendan V. Sullivan, attorney for Lieutenant Colonel Oliver North during the Iran-Contra Hearings. The exasperated chairman of the Iran-Contra committee, Daniel Inouye, admonished Mr. Sullivan that while Mr. North could object to questions, congressional rules prohibited the witness’ lawyer from objecting. Mr. Sullivan responded to Mr. Inouye stating “[w]ell sir, I’m not a potted plant. I’m here as the lawyer. That’s my job.” …

Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, by Frank Agostino, Esq. and Alec Schwartz, Esq.

A major trend challenging both tax professionals and the Internal Revenue Service (“IRS” or “Service”) is ever-accelerating globalization, and the resulting compliance challenges of international tax administration. United States (“U.S.”) taxpayers with interests in foreign corporations often need to report their interests to the IRS by including Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, with their annual income tax return. To facilitate timely compliance, Congress imposed penalties for non-compliance starting at $10,000 for each annual accounting period with which a failure to file exists. This article will review Form 5471, who must file it, what information it must contain, how to challenge a penalty, how to correct non-compliance and the impact of the new tax legislation. …

TAC Tip: Tax professionals should request that the appeals office verify the collection division’s compliance with the taxpayer bill of rights in all collection due process hearing requests, by Frank Agostino, Esq.

Many Tax Professionals expect that the Internal Revenue Service (“IRS”) compliance functions (i.e. the Examination and Collection Divisions) have been trained in and will automatically comply with the Taxpayer Bill of Rights (“TBOR”). According to the National Taxpayer Advocate, this is not currently being done. (See, e.g., NTA Blog: The IRS Refuses to Provide Mandatory Employee Training on Taxpayer Rights). Because of the United States Tax Court’s (“Tax Court”) opinion in Hoyle v. Commissioner,4 other Tax Professionals assumed that the Internal Revenue Service Office of Appeals (“Appeals”) would automatically review whether the IRS compliance functions were complying with, or violated, all of the TBOR’s requirements as part of the verification function; which is required in connection with Collection Due Process (CDP) hearings pursuant to sections 6320 and 6330. This assumption is also wrong. A recent memorandum issued by the Tax Court suggests that unless a Tax Professional specifically raises a TBOR violation, the Appeals Office will not review whether the proposed collection action violates the TBOR. …

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