Imagine a building with two entrances. Once you’re inside, does it really matter which door you used to enter? This analogy often applies to tax disputes when there are overlapping tax laws. The IRS frequently argues that taxpayers are bound by their initial choice of tax treatment–insisting they stick with the “door” they first entered… The post Can a Failed ESOP be Saved by Installment Sale Rules? appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

While short-term rentals have fallen out of favor as of late, they do still offer tax benefits. There are reasons why short-term rentals have more favorable tax treatment than long-term rentals. Short-term rentals often require substantially more active management than traditional long-term leases. Owners must handle frequent turnovers, maintain the property to hotel-like standards, and… The post The Short-Term Rental Tax Rules appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

While owing money to the IRS is not ideal, it is often manageable. One just needs a view of the longer time horizon. As it turns out, in many cases, the IRS never even bothers to attempt to collect unpaid taxes and/or it ends up only collecting a small amount. While there are a lot… The post The “Wait & See” Approach to IRS Tax Debts appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Every relationship has rules, whether informal or formal. Every human interaction has them too. One can easily see this in forced relationships. Take organized sports, for example. Organized sports are essentially pre-planned interactions governed by specific rules that all parties agree to follow. The effectiveness of the rules hinges on proper enforcement, which often requires… The post The Rules of the Game: Burden of Proof in Tax Disputes appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Those who create or come into significant wealth often face difficult decisions about what to do with it. What is one to do with excess wealth—the wealth that will have no material impact on the owner’s life? The most common solution is to simply do nothing and let the estate tax take about half of… The post Navigating Late GST Tax Elections: Maximizing Exemptions for Trusts appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Time. We can’t stop it, but we can use it. We can use it to take advantage of compounding to grow our savings. We can use it to pay down debt to increase equity. And we can use it for tax planning. Time is one aspect of tax planning. It can help taxpayers avoid just… The post Strategic S Corp Conversion to Avoid Tax Basis Limitation appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Income shifting is a fundamental income tax planning concept. It involves strategically allocating income among related taxpayers to minimize the overall tax liability. This may be intended to use up tax attributes of one taxpayer (such as deductions or tax credits), take advantage of tax deferral options to delay paying taxes, or take advantage of… The post Income Shifting to Reduce Tax for Real Estate Sale appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Our federal tax system is code-based. This means that most of what the law is can be found in statutes. The premise is that one can read the statutes and get a general idea of what the law is. This is why when it comes to tax law, each word matters. Adding or removing a… The post Court Says IRS Can Assess Form 5471 Penalties appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Many businesses outsource their human resources to third parties called Professional Employer Organizations (“PEOs”). PEOs are particularly popular with small businesses. The benefits of using a PEO include allowing the business to focus on its business operations rather than HR activities and giving employees access to better employee benefits. This is achieved by having the… The post Third-Party Liability for Repaying Employee Retention Credits appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

When someone owes the IRS money, chances are good that they have other creditors who are also owed money. This raises questions as to who gets paid first–the third parties or the IRS. The answer is usually the IRS–if the IRS even bothers to attempt to collect. In many cases, the IRS does not ever… The post Who Gets Paid First: the Family Member or the IRS? appeared first on Houston Tax AttorneysMitchell Tax Law ..read more