Discussion:Is this fake or real IRS Memorandum?
From TaxAlmanac
| Revision as of 23:41, 13 October 2009 KatieJ (Talk | contribs) (As for the purpo) ← Previous diff |
Revision as of 23:43, 13 October 2009 Michaelstar (Talk | contribs) (Oh Katie - does) Next diff → |
||
| Line 51: | Line 51: | ||
| {{ForumReplyPost|UserID=KatieJ|Date=13 October 2009|Text=As for the purported IRS memo: BO-O-O-O-GUS!}} | {{ForumReplyPost|UserID=KatieJ|Date=13 October 2009|Text=As for the purported IRS memo: BO-O-O-O-GUS!}} | ||
| + | |||
| + | {{ForumReplyPost|UserID=Michaelstar|Date=13 October 2009|Text=Oh Katie - does that sound so familiar....... I can hear Gene now... :-}}} | ||
Revision as of 23:43, 13 October 2009
Discussion Forum Index --> Basic Tax Questions --> Is this fake or real IRS Memorandum?
Discussion Forum Index --> Tax Questions --> Is this fake or real IRS Memorandum?
| 13 October 2009 | |
| I have a client that gave me this, it's being passed around by all the police officer's over here. I think it looks fake because it doesn't give anything to reference it to but what does this seem like to you? It says:
Internal Revenue Service Memorandum Date: May 10, 1990 To: Chiefs, Examination Branch I, II, III, PSP From: Chief, Quality Review Staff Subject: Self-Employment Tax Relative to "Detailed" Police Office Then it goes on to say "In a First United States Tax Court Decision, William R Withers, for 1985, the court decided that details worked by Louisiana State Troopers will be considered as W-2 wages. " Is there such thing as just a plain IRS Memorandum to Chiefs, Examination Branch and what does that mean if there is such a thing? It just looked like something somebody made up to me. But anyway it goes on to say that police officers should not have to pay SE tax on details that require them to wear their uniform & carry their weapons. Almost all of the cops that I do taxes for have some 1099's for this type of work. So I guess that leads to the second part of my question, is it subject to SE tax? I have always said yes because it is regular, continuous. The way it works is when a company wants to pay for security they will call the police department, they have a list of who wants extra work and they assign it to someone who signed up for extra work. The person can refuse the work or take it. If they take it, the company pays them directly and sends them a 1099. Any thoughts? | |
| 13 October 2009 | |
| IRS personnel write informal memorandums to each other all the time. Generally, they are not released to the general public and if they are, a memorandum such as you describe would carry no precedent value at all. Nothing in the wording of your memorandum indicates it may not be legitimate.
If you have an LA Police Officer client, you would need to disregard the memo and do your own research. | |
| 13 October 2009 | |
| we do have that new form for when an W-2 should have been issued | |
| 13 October 2009 | |
| I would hardly be so dismissive of IRS memoranda. I have seen many over the years which did indeed set policy and are just as worthy as anything found in the IRM. There is a basis for them and the information contained is almost always useful and should not be disregarded. | |
| 13 October 2009 | |
| I don't know, it looks phony to me. There is no such thing as a "First" US Tax Court; there is ONE Tax Court, based in Washington DC. The judges travel to other cities several times a year to hold hearings, but there is only one US Tax Court; it's not divided into districts or circuits like the Courts of Appeal. Also, I couldn't find a federal case, Tax Court or any other federal court, where the taxpayer's name was Withers and the issue was as described. There is a Withers Tax Court case from 1978, but the issue had to do with charitable contributions. Several keyword searches using terms from the memo turned up nothing.
I think it's bogus, but even if it is genuine, you can't rely on it, as SCCPA says. I take Steve's point, but with a grain of salt <G>. | |
| 13 October 2009 | |
| Thanks Katie, that's what I thought, what the heck is "First" US Tax Court.
It ends by saying, "Consequently, please ensure that all agents and auditors discontinue the assessment of self employment tax against these individuals. Individuals against whom assessments were previously made should be advised to file claims for refund." Would an IRS Memorandum tell auditors to advise taxpayers to file claims for refund? I have a lot of police clients who are in this situation and I know how it is when they start spreading stuff like this around, the phone starts ringing with "everyone else is doing it" and I'd really like to make sure before I tell them it's bogus when I'm not 100% sure. Is there anyway to find out for sure other than what Katie has arleady told me? I remember I had this problem years ago with the sailors, everyone who worked offshore had the paper with the court case telling them they could take a meal allowance for every day offshore even though the ship provided the meals, I was the bad guy then saying, no, that's not what it says, but then I had something to reference it to. | |
| 13 October 2009 | |
| I did find a court case that says the opposite, that the police officers who do this security work while in uniform & carrying a gun do have to pay social security tax. The court case is pretty close to the situation of my clients, it was Jeffrey S Kaiser TC Memo 1996-526. I am correct that a US Tax Court case would apply to Louisiana? I know that is a dumb question but I've heard some of you say, "this court case doesn't apply because we're in the wrong district" but I guess when people have said that they are referring to the court of appeals? I should know all of this, I am an EA but sorry I don't really know what the districts are or what area they cover and I've always been a little confused about that. | |
Death&Taxes (talk|edits) said: | 13 October 2009 |
| Here is a good description of tax court decisions:
http://www.timbertax.org/research/process/judicial/us_tax_court.asp The Tax Court will follow US Circuit Court decisions in the district in which the trial is held. E.g., depreciation of expensive old instruments was upheld by the Third Circuit [on an appeal by IRS in the Liddle case held in Philadelphia], thus if I have that issue on audit, IRS will know it probably would lose if it is taken to Tax Court. | |
| 13 October 2009 | |
| Well, the Tax Court is the Tax Court; there is only one, and its jurisdiction is nationwide. It's not like the U.S. District Courts or the Circuit Courts of Appeals, whose decisions are technically precedential only in their geographic districts or circuits. However, under the Golsen rule, where there is a disagreement between two Circuit Courts of Appeals on an issue, the Tax Court will follow the Court of Appeals that has direct jurisdiction over the taxpayer in question. So the Tax Court itself can reach different decisions on identical facts, for taxpayers living in different circuits.
However, that's not an issue here. The Fifth Circuit Court of Appeals actually upheld the Tax Court decision in Kaiser. KAISER v. COMM, 81 AFTR 2d 98-383 (132 F.3d 1457), 1997 CA-5. Louisiana and Texas are both in the Fifth Circuit, so that decision is precedential in Louisiana. I think that's all the authority you need, Kathy. | |
Michaelstar (talk|edits) said: | 13 October 2009 |
| Oh Katie - does that sound so familiar....... I can hear Gene now... :-} | |
