Neal Nusholtz has successfully litigated positions for his clients which require the courts to change existing tax law. He has written articles in national and local journals about the legal concepts involved in those cases and also about the combined history of tax and constitutional laws which date back centuries.
Two articles written by Neal about Law and the American Revolution were published in the Journal of the American Revolution, Annual Volume 2017 (Annual Volume Journal of the American Revolution Books). The book presents the journal’s best historical research and writing over a given calendar year.
This is an aggressive position that depends on state powers-of-appointment law, on careful drafting, and on a willingness to defend the ‘acquired from the decedent’ requirement of §1014(b)(9).
What will be the basis in the trust assets on the death of the husband and on the death of the wife? Internal Revenue Code (”IRC”) §1014 governs when an heir’s basis is the fair market value at the time of death.
Under Internal Revenue Code (”IRC”) §1014, Inherited property has a basis equal to the property’s fair market value on the date of death. The double basis step up is the brass ring of estate planning. The term double basis step up means a basis step up in all marital property on the first death of a husband and wife and a second basis step up on the death of the surviving spouse.
To what extent can a fiduciary of an estate or trust involve himself, herself in the process in the determination of heirs? The answer depends on context. Beware of the issues and research the issue wherever you are. If a search is necessary to give notice or distribution, do it and follow the rules of due diligence as suggested above.on context. Beware of the issues and research the issue wherever you are. If a search is necessary to give notice or distribution, do it and follow the rules of due diligence as suggested above.
Partnership agreements routinely restrict the assignment of ownership interests unless the remaining partners consent to the transfer. Many of those Partnership transfer clauses allow for transfer without consent if the assignment is to a family member or acquisition is through the right of inheritance.
IRS intrusiveness into the professional practices of tax preparers has grown steadily in the past decade. This has created a chilling effect on the tax industry.
An IRS Form 2848 authorizes an individual to represent a taxpayer. According to the IRS instructions for Form 2848, Form 2848 is used to authorize a representative to perform all acts that a taxpayer can perform with respect to matters described in the power of attorney.
The critical factor in selecting the best deal wasn’t the amount of the annual premium. It was the “vanish.” The vanish is a projected number of years after which the policy has enough funding to sustain itself without further premiums being paid.
Charitable organizations are exempt from income tax under Internal Revenue Code (IRC) §501(c)(3) if they are both organized and operated exclusively for one or more of the public purposes specified in that code section. An organization failing to meet either an organizational test in its formation documents or an operational test in actual practice is not exempt.
Except for lawsuits for tax refunds, jury trials are forbidden in lawsuits against the federal government. In Damsky v. Zavatt, the government sued in New York to foreclose its tax liens on property transferred from a delinquent taxpayer’s wife to her husband and other third parties.
What does the JLD Living Trust case tell us? It tells us there is a way for a settlor to rest in peace by having a court determine the validity of the estate plan while he or she is still alive. The JLD case opens the door to pre-death litigation of an estate plan in those situations where a settlor wants certainty and to avoid post-mortem contention over the terms of their estate plan.
Typically, in estate planning trusts, the settlor and the trustee are the same person. Having only one person involved in the creation of a trust prevents an essential element of a contract — a meeting of the minds (aggretatio mentium).
Does a trustee have standing to challenge a change to a trust of which he or she is the trustee? Alan May once represented a trustee in a matter where the trustee was named as trustee in an antecedent trust and the subsequent restated trust only made one change. It named a new trustee.
Powers of withdrawal as an alternative to distributions can be used to save income taxes, capital gains taxes, estate taxes and generation skipping transfer taxes.
Unlike the attorney-client privilege, the attorney has an independent privacy interest in his work product and may assert the work product doctrine on his own behalf; the doctrine’s protection is not waived simply because the attorney shared the information with his client.
History tells us that over time, government collection of revenue will gravitate to collect the most revenue under circumstances where taxpayers cannot object prior to assessment and that method of revenue collection can develop into abuses that will continue until personal rights are created that limit the collection of revenue.
Movies are expensive to make but the millions spent in making a movie cannot be deducted as an ordinary and necessary expense under IRC §162(a). The cost must be depreciated in aliquot amounts each year over the useful life of the movie.
In the middle of an income tax audit, clients sometimes express a fear that the Internal Revenue Service (“IRS”) will suddenly seize their bank accounts or their home.
The basic exclusion amount (“BEA”) is the dollar size of a taxable estate above which there is a 40% tax. Gross estates worth less than the BEA need not file an estate tax return. The current BEA is temporarily $13,990,000. If Congress does nothing before 2026, the BEA will drop in January of 2026 to $5 million adjusted for inflation from 2016. Still, Congress could make the BEA into any number, even one larger than the current $13.99 million. As advisors, we need to plan for the uncertain BEA.
Lately, inflation has put upward pressure on wages. The debt ceiling fight is putting downward pressure on salaries paid by the U.S. government. That combined dynamic could influence federal judges to make pro government decisions in tax cases so that revenues will increase in the long term.
A decedent’s will can control whether a personal representative should or should not pursue assets that had been transferred outside of probate, and, as required by law, use those assets to pay creditors and allowances of family members.
Criminal tax statutes are sometimes drafted with broad omnibus provisions to capture a wide range of unanticipated criminal conduct that can be engaged in by taxpayers. When coverage of a defendant’s conduct by an omnibus provision
This newsletter uses the expected value approach to examine three life insurance policies with changing death benefits and probabilities. The expected value approach
Under our federal system, the larger federal government functions within the confines of the smaller states. The concept affects the collection power of the Internal Revenue Service (“IRS”).
The unified credit against estate tax determines whether a decedent’s estate will or will not owe a 40 percent estate tax. The 40 percent tax would be on the amount of a taxable estate
Five common law states have optional community property statutes which allow surviving spouses to save capital gains taxes by electing community property treatment.1 The Internal Revenue Service (“the IRS”) has specifically refrained from commenting on the
validity of optional community property statutes in its 2016 and 2020
This article was written for Leimberg Information Services. Leimberg provides Estate Planning, Employee Benefits and Retirement Planning, Business Entities, Asset Protection Planning, Financial Planning and Charitable Planning Newsletters. They also provide LawThreads®, Actual Text, State Laws, US Code Searcher, and Supersearcher tools.
When a taxpayer suffers an erroneous tax assessment, under Internal Revenue CodeSection (“IRC”) §7422, the taxpayer can contest the erroneous assessment by paying it, asking for a refund and then suing for a refund in federal district court
“catch 22” happens when the act of claiming The Breadth of IRC 2652(c)(2) something contradicts the truth of what is being claimed. The term comes from Joseph Heller’s satirical novel about World War II,
Reuben G. Lensky was an attorney in Portland, Oregon convicted in a 1963 bench trial for tax evasion for the years 1955, 1957, and 1958.
It might happen, one day, that you are representing a deceased estate that has federal tax liabilities exceeding the liquidation value of the estate’s assets.
With minor exceptions, the income tax rules are the same for estates and trusts. They file the same return, a Form 1041. They both pay
A conservatorship can be defined as a fiduciary beneficiary relationship where a person receives income that ultimately belongs to someone else.
On August 22, 2020, the Real Property, Probate and Trust Law Section of the Florida Bar voted to send a proposed bill to the Florida legislature entitled
This article attempts to give useful tax advice to estate planners who fall into a trance when they see the letters “IRC” followed by the symbol
Suppose in 2019 that you are trustee of a $3 million simple trust setup after the death of a second parent. The trust will distribute
When somebody doesn’t pay their federal tax-es, two things happen. Immediately, the United States has an unrecorded lien upon all property belonging to the delinquent taxpayer.
Gold Forever Music, Inc. (“Gold Forever”) is a Detroit company formed in 1967 to publish and
market music for its songwriters who are under contract to receive one-half of performance
his article addresses the question of wheth-er a court order construing the terms of a trust would serve as a res judicata bar against future constructions of the same terms
In 1997, Congress passed 26 USC 6331(h), which lim-ited continuous IRS levies on Social Security benfits to 15 percent of the payments. After 26 USC
The eminent domain power of government to take property for public use dates back at least to Rome in the fifth century C.E.1 Recently, British
Published in the 2017 volume of Journal of the American Revolution.
If it has not happened yet, one of your clients may one day have an Internal Revenue Code § 74031 problem. The National Taxpayer Advocate’s annual report has ranked § 7403 in the top 10 tax issues most frequently litigated
Published in the 2016 volume of Journal of the American Revolution.
If you acquire property with a federal tax lien attached, it can be levied upon for sale to pay the transferor’s taxes. What if you owned property you did not acquire
When valuing an individual’s partial ownership in a piece of real estate, would it matter if that person lived on the property?
The Internal Revenue Service estimates that between $11 billion and almost $14 billion in erroneous Earned Income Tax Credit (EITC – a refundable credit for low income taxpayers) clams are paid annually.
In 2011, Congress increased the penalty for each failure of a preparer to comply with due diligence requirements in preparing a tax return from $100 to $500. This was after the Internal Revenue Service (IRS) paid billions
After filing for divorce, spouses often file separate tax returns. Spouses are jointly liable on joint returns, and one spouse might cause an unexpected income tax liability in an income tax audit (subject to the innocent spouse rules).
On October 7, 1996, four Supreme Court justices refused, without explanation, to participate in the case of Hatter v United States, 117 S Ct 39 (1996). In that case, some 80 federal judges had sought income tax refunds for as much as $75,000. Because of the abstentions, the Supreme Court lacked a quorum. The appeals court ruling allowing the refunds was automatically affirmed.
Suppose a particular criminal statute is more difficult to interpret than the statute in Ratzlaff and that this results in a 70% chance of error.
In 1754 the Massachusetts Legislature
passed a liquor excise tax bill requiring consumers to account to tax collectors on oath,