Abajian Law tax attorneys Vic Abajian, Aksel Bagheri, and Ovsep Akopchikyan attended the annual Tax Controversy Institute on October 24, 2017, at the Beverly Hills Hotel. The Institute is the premier conference where top tax practitioners and high-ranking IRS employees from Southern California and Washington D.C. meet to discuss the most relevant and critical issues surrounding the IRS.
This year, Abajian Law was pleased with the Institute’s honoring of Miles Friedman, the former IRS Associate Area Counsel in Laguna Niguel, for his outstanding proficiency in tax law as well as his achievements and contributions as a leader in the tax community. Vic Abajian has been fortunate to learn from Mr. Friedman and look to him as a mentor beginning when Mr. Abajian joined the IRS’s Office of Chief Counsel after his studies at Georgetown Law.
In addition, this year’s Institute offered a number of panels in which tax practitioners from both the private and public sectors discussed and debated the most relevant of issues in tax law.
The Institute’s panelists included Mary Beth Murphy, the Commissioner of the IRS’s Small Business/Self Employed Division, who discussed the IRS’s current and future plans for collection. Ms. Murphy advised the audience that, due to the limited resources at the IRS, the IRS has already begun assigning cases to private debt collectors for the collection of back taxes. Of course, this has been met with a lot of criticism from tax practitioners who are concerned about the aggressiveness of private debt collectors; the methods private debt collectors use in their attempts to collect taxes; the prospect of fraudsters acting as debt collectors; and whether taxpayers can easily distinguish fraudsters from legitimate debt collectors. Tax practitioners should take great care in guiding their clients through this new chapter in IRS collections.
In another panel, two IRS employees – Keith I. Matsuda, the IRS’s Team Manager of Examination Appeals, and Timothy Bilotta, the IRS’s Territory Manager of Field Examination in the Small Business/Self Employed Division – spoke alongside private practitioners regarding the IRS’s new appeals procedures. The panel discussed the impacts of Appeals recasting itself in a “quasi-judicial” role, which affects the manner in which tax practitioners should handle both audits and appeals. Of note, Appeals in this new role will return a case to examination if a taxpayer raises a new issue or submits new information for the first time in Appeals, as opposed to during examination.
The Institute’s panelists also debated an emerging area in which significant contention lies – the world of Bitcoin and cryptocurrency transactions. The discussion included whether the IRS is properly classifying cryptocurrency as “property”; the proper methods to report gains from cryptocurrency on tax returns; and the potential for civil audits involving cryptocurrency to turn criminal. Please see Abajian Law’s article published on November 8, 2017, for more information about the intersection of tax law and cryptocurrency.
Lastly, there was discussion by other panelists about the IRS’s recent campaign targeting numerous Section 831(b) captive insurance companies and insureds; the “do’s and don’ts” of civil tax trials and criminal prosecutions; and the impacts stemming from California’s transition from the Board of Equalization to the newly created California Department of Tax and Fee Administration (“CDTFA”) and the Office of Tax Appeals.