Nichols’ Tax Update Podcast: Issue 21-29, IRS Issues Fact Sheet on Child Care Tax Credit Advances, and much more!


  1. Bank Is Immune From Liability for Complying With IRS Levies

A U.S. district court granted a bank judgment on the pleadings in a trustee’s suit against the bank for complying with IRS levies to collect a trust beneficiary’s taxes, finding that the bank was required under section 6332 to comply with the IRS levies and is absolutely immune from liability for compliance.

[Marshall F. Newman et al. v. Santander Bank NA et al.; No. 1:20-cv-10632, 7/9/2021]

  1. IRS Issues Fact Sheet on Monthly Payments of Child Tax Credit

The IRS has released a fact sheet (FS-2021-10) on automatic monthly payments of the child tax credit to eligible families beginning July 15 that are meant to cover half of the credit families will likely qualify to receive when they file their 2021 federal income tax return.

[ FS-2021-10; 7/12/2021]

  1. Most Partnerships Are Staying in the Centralized Audit Regime

A pattern has emerged from three years of tax return filings showing that most partnerships have opted into the centralized partnership audit regime, according to an IRS official.

[Tax Notes Today, 7/14/2021, article by Kelley Taylor]

  1. Daycare Center Operator Liable for Deficiencies, Penalties

The Tax Court sustained the IRS’s adjustments to a daycare center operator’s gross receipts and its determination that the corporation had unreported capital gain and rental income. The court sustained the IRS’s disallowance of depreciation deductions, most business expense and other deductions, and the disallowance of Indian employment tax credits and sustained accuracy-related penalties.

[Blossom Day Care Centers Inc.; T.C. Memo. 2021-87, 7/13/2021] PLUS

 Next item . . . owners of taxpayer cited above . . . .

  1. Corporate Shareholders, Officers Were Employees; Penalties Apply

The Tax Court, sustaining failure to deposit and accuracy-related penalties, held that a couple who were the only shareholders and officers of a corporation were statutory employees for employment tax purposes and sustained the IRS’s compensation determination, finding that they both performed services for the corporation and received remuneration for those services.

[ Blossom Day Care Centers Inc.; T.C. Memo. 2021-86, 7/13/2021]

  1. Tax Lawyer Had Unreported Dividends; Firm Had Unreported Income

The Tax Court, sustaining a fraudulent failure to file penalty, held that a law firm had unreported gross receipts from tax savings products it marketed and upheld the IRS’s disallowance of deductions. The court held that the firm’s owner and his wife received unreported dividends, that their ranch partnership losses were nondeductible passive losses and the court denied their other expense deductions.

  • –   191 pages – – – millions of $$$ in income – – – 2003 – 2011

[Ernest S. Ryder & Associates APLC et al. v. Commissioner; No. 14619-10; No. 14687-10; No. 7527-12; No. 9921-12; No. 9922-12; No. 9977-12; No. 30196-14; No. 31483-15; T.C. Memo. 2021-88, 7/14/2021   

I have relied on Tax Analysts® to provide reliable and timely analysis of Federal tax developments for over 30 years. The “headnotes” you see here are from “Tax Notes Today” the preeminent source of accurate information and analysis of important developments and trends in Federal taxation.

(*** identifies item with useful analysis of current issue but not covered in Lynn’s recorded commentary due to complexity and time required for fair comment.)

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