Last week at my other tax blog: Pro error, filer pays; Banks sued for foreclosure tax
Saturday, June 25, 2011
It usually pays to be judicious when it comes to taxes.
But when taxpayers didn't exercise enough prudence, their tax actions entered the judicial realm in a couple of cases discussed last week at my other tax blog.
Let's start with the U.S. Tax Court case in which the judge informed a couple that their tax professional's error is no excuse for their request to waive the penalty that was assessed in connection with the mistake.
The couple had made $3.4 million on an investment transaction. Their accounting/law firm neglected to add that money to their income. The IRS noticed and in addition to the unpaid tax, the agency billed them for interest and penalty payments.
The husband and wife accepted that they owed tax and interest, but they didn't want to pay the penalty since they didn't actually fill out their 1040.
Too bad, said the Tax Court judge. They signed the erroneous return, so they have to pay all the amounts, including the penalty, that the IRS deteremined was due.
We could be waiting a while for the outcome of the other tax-related legal proceeding I blogged about last week at my other tax blog.
But Ingham County, Mich., officials are willing to wait because if they prevail, they could get millions and the state "tens of millions" in transfer taxes that some major banks allegedly didn't pay in connection with foreclosure sales.
The lawsuit, filed against Bank of America, Wells Fargo and other institutions, contends that the lenders "inappropriately" claimed Michigan and county tax exemptions on "improperly filed deeds."
You can check out the details on these two cases at my Bankrate Taxes Blog, where I post new items each Tuesday and Thursday.
And if you just get too busy to check next week, no worries. I'll bring you highlights (and links) again next Saturday in "Last week at my other tax blog."
- Check out your tax preparer
- Tax pro time
- Picking a tax pro
- Common tax-filing errors to avoid
- Foreclosure's costly tax implications
- Foreclosure's other tax cost
- Mortgage debt forgiveness act also offers PMI break
- Last week at my other tax blog Archives Page
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