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Federal Income Tax

Federal Income Tax

IRS takes professional golfers to court

Golf photo by Lukáš Opekar via Unsplash.

Spanish golfer Sergio Garcia recently litigated a $1.7 million tax case arising out of a major endorsement contract with TaylorMade, a golf equipment manufacturer.

At issue in the case is how Garcia should characterize the income that he received from the endorsement deal. The income could be classified as personal services, royalties, or a combination of both. (As a Swiss resident, Garcia would only have to pay U.S. taxes on royalty income.)

In a note from this spring’s Tax Lawyer, Georgetown Law student Jay Tymkovich argues that Garcia’s case “exemplifies the convoluted rules surrounding the allocation of income by nonresident alien athletes.”

Tymkovich calls for a standard income allocation for nonresident alien athletes after reviewing Garcia’s tax litigation and a nearly identical case involving a TaylorMade contract with South African golfer Retief Goosen. Continue reading “IRS takes professional golfers to court” »

Federal Income Tax

Report: IRS installment plan hold time was 47 minutes in 2017

Man on phone picture by Photo by freestocks.org on Unsplash

The IRS’ Taxpayer Advocate has released its review of the 2017 filing season (PDF).

While noting that tax filing was relatively hassle-free for those who did not require assistance from the IRS, the Advocate found that “results were mixed” for taxpayers who sought help from the agency. Continue reading “Report: IRS installment plan hold time was 47 minutes in 2017” »

Federal Income Tax

OECD Report: Income taxes in the U.S. are relatively low

Photo of 20 dollars by Vitaly, Sand City, United States - via Unsplash

Americans love to gripe about income tax rates, particularly in April.

However a new report indicates that U.S. tax rates aren’t that high compared to other developed countries.

The Organisation for Economic Co-operation and Development (OECD) released its annual Taxing Wages report yesterday. The study finds that the tax burden of U.S. workers is below average on a global scale.

The average single U.S. worker with no children paid a 32 percent overall tax rate in 2016 compared to the OECD aver of 36 percent. Continue reading “OECD Report: Income taxes in the U.S. are relatively low” »

Case Summaries Federal Income Tax

Tax Deductions at the Ranch

Photo of a night sky at a ranch by John Moore via Unsplash

A Virginia woman is not responsible for a $30,467 tax deficiency assessed by the IRS according to a U.S. Tax Court Opinion summary opinion filed on Thursday.

The case involves a Texas couple who moved to Purcellville, Virginia (an ex-urb of D.C.) in 2005 and built a home on a 5.5 acre plot of land.

In addition to building their house, the couple also built a “run-in shed” for their four Peruvian Paso horses, which they brought from Texas.

In 2008, the husband bought a 14.8-acre plot of land next to the marital property, which he wanted to use for cattle ranching. Then, in 2011, he switched to a part-time work schedule so he could pursue his cattle ranching activity. Continue reading “Tax Deductions at the Ranch” »