Recovery Follows Exhaustion: A Refund Claim Gone Awry

tax refundThe Internal Revenue Code is long (but not 70,000 pages long).

It is complicated.

It is laden with ambiguities.

And it is constantly changing (because Congress loves to tinker).

But this much is clear: You cannot get a tax refund if you do not make a claim for one.

Here’s what the Code says:

No suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Secretary, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof.

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Tax Procedure: A Minority Shareholder Is Responsible For Corporate Taxes Following the Majority Shareholders’ Fraud

Transferee liabilityWilliam Kardash was a minority shareholder in a Florida company involved in the construction industry; the majority shareholders were skimming cash from the company, apparently without his knowledge or complicity. Kardash wound up with a significant tax bill for the company’s taxes, as the Eleventh Circuit ruled that he was liable as a transferee under section 6901 of the Internal Revenue Code and applicable state law. Kardash v. Comm’r, No. 16-14254, 2017 U.S. App. LEXIS 14389 (11th Cir. Aug. 4, 2017).

Transferee liability represents one of several theories that the IRS can use to hold one person liable for another person’s taxes.… Read More