IRS not estopped from collecting interest on paid tax liability

Article Abstract:

The court decided in the 'Benson' case that a taxpayer was not allowed to prevent the IRS from collecting more interest on a tax liability in spite of the taxpayer's previous payment of the tax and interest cited by the Service as the 'payoff' amount. Based on 'Wingfield,' a plaintiff must demonstrate four elements to make an estoppel claim. The party to be stopped must be aware of the facts and intend that its conduct will be acted on. Moreover, the party requesting estoppel must not be aware of the true facts and must rely on the conduct of the entity to be estopped. The court found that the reliance of the taxpayer on the quoted amount was not justified because he was not barred to exercise any legal right, did not satisfy the provisions of Sec. 7121 and Sec. 7122, and negotiated a settlement with an IRS employee who was not empowered to compromise the claim of the IRS.

Cases, Tax collection, Tax abatement, Estoppel

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Team up small business stock tax breaks with investment diversification

Article Abstract:

Individuals who are attracted into investing in emerging small businesses by a 50% exclusion of stock gain must consider investing in venture capital funds to better diversify their portfolios. The move is facilitated by Secs 1202 and 1045 by reducing the tax burden on the sale of small business stock by investors. However, the corporation concerned must be a qualified small business at least during the date of issuance while the issuing corporation must be an active business during the taxpayer's holding period. Through the pass-through provision, any tax benefits granted to small business stock investors can also be obtained by individual investors. Meanwhile, no tax on capital gain is collectable from an individual who has opted to roll over proceeds from the sale or exchange of qualified small business stock that is held for over six months.

Public Finance Activities, Administration of General Economic Programs, Tax Deductions & Exemptions, Small Business, Investment Incentives, Taxation, Finance, Stocks, Venture capital, Tax deductions

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