Portrait of a White Elephant

#27 12-21-2008, 08:45 PM

- quote -

> > (It's my hypothetical, so I get to make up the facts. I (think I)
> > inherit a piece of undeveloped property, which I plan to hold on to
> > for a few years and then sell it when times are right. So I pay taxes
> > on it. Then it turns out I didn't actually own it, because the person
> > I thought I inherited it from had sold it.)

> > > If you received taxable income that you had to pay to someone else
> > > later, you get a deduction for that. But normally you don't get
> > > someone else to pay you back for taxes you properly paid.

> > But since I didn't own the property, they were _not_ properly paid.

> Both parties made an error. You paid the taxes thinking you owed
> them, and the town accepted them thinking you owed them. Generally
> speaking, you would be entitled to get them back. The important word
> is "generally". There could easily be a specific law in your state
> that is contrary to the general principle.
> There are a bunch of associated questions.
> Why did you get a tax bill if you don't own the property?
> Isn't that negligence by the state?
> Did the real owner pay taxes? If not, is that some sort of fraud?

We're now discussing real estate taxes which do not fall
under the IRS closed return rules.

If the property had been sold to someone else, that person
was simply remiss in not registering the deed on a timely
basis. If you registered first, you may be the owner based
on State law.

A better example would be that you paid estate taxes on
property that had been sold and the return is closed before
you learn you don't own the property. Now you have a case
against executor.

Dick

--
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#26 12-21-2008, 03:46 PM

- quote -

> (It's my hypothetical, so I get to make up the facts. I (think I)
> inherit a piece of undeveloped property, which I plan to hold on to
> for a few years and then sell it when times are right. So I pay taxes
> on it. Then it turns out I didn't actually own it, because the person
> I thought I inherited it from had sold it.)
> > If you received taxable income that you had to pay to someone else
> > later, you get a deduction for that. But normally you don't get
> > someone else to pay you back for taxes you properly paid.
> But since I didn't own the property, they were _not_ properly paid.
> Seth
Both parties made an error. You paid the taxes thinking you owed them, and

the town accepted them thinking you owed them. Generally speaking, you
would be entitled to get them back. The important word is "generally".
There could easily be a specific law in your state that is contrary to the
general principle.

There are a bunch of associated questions.
Why did you get a tax bill if you don't own the property? Isn't that
negligence by the state?
Did the real owner pay taxes? If not, is that some sort of fraud?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#25 12-21-2008, 01:20 AM

In article <Xns9B778128EF3F2avocatstuyahoofr[at]130.133.1.4> ,
Stuart Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

> sethb[at]panix.com (Seth) wrote:

> > What if the tax wasn't properly payable by you?
> > > Say, you thought you owned some property, and paid property taxes.
> > Then someone else with a senior claim came along, and the courts
> > ruled that he had owned it all along. Since you didn't own it,
> > you weren't required to pay property tax; can you collect what you
> > paid (from either the owner or the taxing authority)? If not (or
> > even if so), do you have to file amended income tax returns?
> You wouldn't have paid taxes on it unless you received some financial
> benefit from owning it. Ownership isn't, then, an issue.

Huh? What does financial benefit have to do with anything?

Maybe I _expected_ to receive financial benefit, but since I don't
actually own the property, I don't get any.

(It's my hypothetical, so I get to make up the facts. I (think I)
inherit a piece of undeveloped property, which I plan to hold on to
for a few years and then sell it when times are right. So I pay taxes
on it. Then it turns out I didn't actually own it, because the person
I thought I inherited it from had sold it.)

- quote -

> If you received taxable income that you had to pay to someone else
> later, you get a deduction for that. But normally you don't get
> someone else to pay you back for taxes you properly paid.

But since I didn't own the property, they were _not_ properly paid.

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#24 12-18-2008, 03:23 PM

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B77901A3E5ABavocatstuyahoofr[at]130.133.1.4...
- quote -

> "Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:
> > you seem to keep missing the point. what if you paid taxes that
> > were NOT "properly paid". Here is another example. You provide
> > all documentation to your tax preparer. He is an idiot. He
> > miscalculates your taxes. You are unaware of this, and pay the
> > wrong amount (too much). The statute of limitations runs, so you
> > cannot amend the return. Can you sue the preparer and have him
> > pay you back the taxes "IMPROPERLY paid"?
> I've already commented on this particular situation. This is called
> accounting malpractice, and you should be able to recover from the
> accountant if you sue within the statute of limitations. Which, by the
> way, might be three years or less, so you'd be out of luck on that
> basis. But that's not the kind of case I was talking about.

I did not see that post. I would think that there are some scenarios where
someone pays tax he should not have, and it is someone else's fault, so
recovery should be available.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#23 12-18-2008, 01:25 PM

john <john[at]yahoo.org> wrote:

- quote -

> Is account malpractice documented somewhere?
> I donno, maybe in a CPA code of ethics, some IRS document,
> or something like that; where it says that negligence is
> malpractice?

The AICPA does issue Standards for Tax Practice. Malpractice
may be defined there. While I am not familiar with those
Standards, I am certain that misinterpretation is malpractice.
And that would be the situation in the Portrait of a White
Elephant.

- quote -

> In this example, tax preparer would say something to the effect;
> "I do dozens of tax returns at the last moment and do the best
> I can. I don't get enough sleep and am bound to make some
> mistakes; and everyone knows that.

IMRHO the above sentences are an admission of failure to exercise
due professional care and would get you sanctions by the AICPA,
the NAEA, and every State CPA Board. Those sanctions could be
used in a lawsuit to recover damages. But then we get to the
issue of how much is worth sueing over?

- quote -

> The client signs the return and it ultimately responsible for
> making sure it is correct. If they failed to note an error,
> it is THEIR negligence and THEIR liability."

That is definitely the position of the IRS which is averse to
going after third parties. But I strongly advise against using
argument with the above mentioned organizations.

- quote -

> So, is there actual documentation that would establish the
> tax preparer's culpability and liability? Or is it purely
> a matter of common sense?

The IRS has thresholds for preparer fraud. But this discussion
does not rise to that level.

Dick

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#22 12-17-2008, 11:41 PM

"john" <john[at]yahoo.org> wrote:

- quote -

> Is account malpractice documented somewhere?
> I donno, maybe in a CPA code of ethics, some IRS document, or
> something like that; where it says that negligence is malpractice?

To start with in hundreds if not thousands of court cases around the
country. Go to the nearest law library and you'll be able to read
about it. It's not likely to be in a specific statute.

- quote -

> In this example, tax preparer would say something to the effect;
> "I do dozens of tax returns at the last moment and do the best I
> can. I don't get enough sleep and am bound to make some mistakes;
> and everyone knows that. The client signs the return and it
> ultimately responsible for making sure it is correct. If they
> failed to note an error, it is THEIR negligence and THEIR
> liability."

First of all, just making a mistake doesn't make it malpractice. It
has to be negligent. Whether the accountant or the client in this case
(or either of them) was negligent would be up to the jury, based on all
the evidence.

- quote -

> So, is there actual documentation that would establish the tax
> preparer's culpability and liability? Or is it purely a matter of
> common sense?

Go look at appellate cases in your state concerning accounting
malpractice, and you should find out what the standards are.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#21 12-17-2008, 10:52 PM

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B77901A3E5ABavocatstuyahoofr[at]130.133.1.4...
- quote -

> "Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:
> > you seem to keep missing the point. what if you paid taxes that
> > were NOT "properly paid". Here is another example. You provide
> > all documentation to your tax preparer. He is an idiot. He
> > miscalculates your taxes. You are unaware of this, and pay the
> > wrong amount (too much). The statute of limitations runs, so you
> > cannot amend the return. Can you sue the preparer and have him
> > pay you back the taxes "IMPROPERLY paid"?
> I've already commented on this particular situation. This is called
> accounting malpractice, and you should be able to recover from the
> accountant if you sue within the statute of limitations. Which, by the
> way, might be three years or less, so you'd be out of luck on that
> basis. But that's not the kind of case I was talking about.
Is account malpractice documented somewhere?

I donno, maybe in a CPA code of ethics, some IRS document, or something like
that; where it says that negligence is malpractice?

In this example, tax preparer would say something to the effect; "I do
dozens of tax returns at the last moment and do the best I can. I don't get
enough sleep and am bound to make some mistakes; and everyone knows that.
The client signs the return and it ultimately responsible for making sure it
is correct. If they failed to note an error, it is THEIR negligence and
THEIR liability."

So, is there actual documentation that would establish the tax preparer's
culpability and liability? Or is it purely a matter of common sense?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#20 12-17-2008, 09:09 PM

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

> you seem to keep missing the point. what if you paid taxes that
> were NOT "properly paid". Here is another example. You provide
> all documentation to your tax preparer. He is an idiot. He
> miscalculates your taxes. You are unaware of this, and pay the
> wrong amount (too much). The statute of limitations runs, so you
> cannot amend the return. Can you sue the preparer and have him
> pay you back the taxes "IMPROPERLY paid"?

I've already commented on this particular situation. This is called
accounting malpractice, and you should be able to recover from the
accountant if you sue within the statute of limitations. Which, by the
way, might be three years or less, so you'd be out of luck on that
basis. But that's not the kind of case I was talking about.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#19 12-17-2008, 08:28 PM

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B778128EF3F2avocatstuyahoofr[at]130.133.1.4...
- quote -

> sethb[at]panix.com (Seth) wrote:
> > Stuart Bronstein <spamtrap[at]lexregia.com> wrote:
> > > If you're looking for repayment from the IRS, you might be able to
> > > get it. If you're looking for repayment from someone else, my
> > > recollection is that you generally won't get it. If a tax is
> > > properly payable by you, the courts are very reluctant to say that
> > > someone else has to be responsible for paying it.
> > > What if the tax wasn't properly payable by you?
> > > Say, you thought you owned some property, and paid property taxes.
> > Then someone else with a senior claim came along, and the courts
> > ruled that he had owned it all along. Since you didn't own it,
> > you weren't required to pay property tax; can you collect what you
> > paid (from either the owner or the taxing authority)? If not (or
> > even if so), do you have to file amended income tax returns?
> You wouldn't have paid taxes on it unless you received some financial
> benefit from owning it.

not necessarily. there are White Elephants in real estate, too.

Ownership isn't, then, an issue.
- quote -

> If you received taxable income that you had to pay to someone else
> later, you get a deduction for that. But normally you don't get
> someone else to pay you back for taxes you properly paid.

you seem to keep missing the point. what if you paid taxes that were NOT
"properly paid". Here is another example. You provide all documentation to
your tax preparer. He is an idiot. He miscalculates your taxes. You are
unaware of this, and pay the wrong amount (too much). The statute of
limitations runs, so you cannot amend the return. Can you sue the preparer
and have him pay you back the taxes "IMPROPERLY paid"?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#18 12-17-2008, 07:41 PM

sethb[at]panix.com (Seth) wrote:
- quote -

> Stuart Bronstein <spamtrap[at]lexregia.com> wrote:

> > If you're looking for repayment from the IRS, you might be able to
> > get it. If you're looking for repayment from someone else, my
> > recollection is that you generally won't get it. If a tax is
> > properly payable by you, the courts are very reluctant to say that
> > someone else has to be responsible for paying it.
> What if the tax wasn't properly payable by you?
> Say, you thought you owned some property, and paid property taxes.
> Then someone else with a senior claim came along, and the courts
> ruled that he had owned it all along. Since you didn't own it,
> you weren't required to pay property tax; can you collect what you
> paid (from either the owner or the taxing authority)? If not (or
> even if so), do you have to file amended income tax returns?

You wouldn't have paid taxes on it unless you received some financial
benefit from owning it. Ownership isn't, then, an issue.

If you received taxable income that you had to pay to someone else
later, you get a deduction for that. But normally you don't get
someone else to pay you back for taxes you properly paid.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#17 12-17-2008, 03:28 PM

Gil Faver <rowdy'sboss[at]xxyz.com> wrote:
- quote -

> Dick Adams wrote:

> > BUT what if he had followed the advice of myself and my learned
> > colleagues and waited a year, got another appraisal, and donated
> > it to another museum. NO Lawsuit!

> don't kid yourself. That would not avoid a lawsuit, and might
> make a litigant more inclined to sue this taxpayer, since his
> actions now make it seem like he KNEW the return was improper.

If the taxpayer recognized income for the return of the painting,
he would be putting himself in the same position he was in before
he made the donation.

- quote -

> Actually, I remain of the mind that the return was a gift. I
> have seen little if any specific information to support theories
> to the contrary.

I remain of the mind that a 501(c)(3) is not allowed to gift its
assets to private parties.

There an underlying presumption here that the museum directors
were not ignorant of the law and had exhausted attempts to
transfer the painting to another museum.

- quote -

> Another question: What if in the scenario I posed, the Judge
> ruled that the return was, in this particular instance, proper.
> Would that not make it a gift to the original donee, and his
> basis in this gift is now zero? If so, what does he do with
> his taxes in the third tax year, to "undo" the incorrect claim
> that it was income in the second tax year?

I have been trained to think like a thief, but I am unable to
conjure up a single scenario under which the return of the
painting was legally a gift.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#16 12-17-2008, 01:26 PM

In article <Xns9B76B6ADB9F7Eavocatstuyahoofr[at]130.133.1.4> ,
Stuart Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

> "Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

> > Will courts allow you to sue and recover for taxes paid that were
> > not properly required to be paid? This is a general question, I
> > don't know or care how it might fit into the White Elephant
> > scenario.
> If you're looking for repayment from the IRS, you might be able to get
> it. If you're looking for repayment from someone else, my recollection
> is that you generally won't get it. If a tax is properly payable by
> you, the courts are very reluctant to say that someone else has to be
> responsible for paying it.

What if the tax wasn't properly payable by you?

Say, you thought you owned some property, and paid property taxes.
Then someone else with a senior claim came along, and the courts ruled
that he had owned it all along. Since you didn't own it, you weren't
required to pay property tax; can you collect what you paid (from
either the owner or the taxing authority)? If not (or even if so), do
you have to file amended income tax returns?

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#15 12-17-2008, 01:23 PM

In article <OgX1l.209488$Mh5.168637[at]bgtnsc04-news.ops.worldnet.att.net> ,
Gil Faver <rowdy'sboss[at]xxyz.com> wrote:

- quote -

> Will courts allow you to sue and recover for taxes paid that were not
> properly required to be paid? This is a general question, I don't know or
> care how it might fit into the White Elephant scenario.

If it's income tax, you don't get it back after 3 years after filing
deadline.

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#14 12-17-2008, 01:22 PM

In article <yHR1l.208746$Mh5.183696[at]bgtnsc04-news.ops.worldnet.att.net> ,
Gil Faver <rowdy'sboss[at]xxyz.com> wrote:
- quote -

> > > BUT what if he had followed the advice of myself and my learned
> > colleagues and waited a year, got another appraisal, and donated
> > it to another museum. NO Lawsuit!
> don't kid yourself. That would not avoid a lawsuit, and might make a
> litigant more inclined to sue this taxpayer, since his actions now make it
> seem like he KNEW the return was improper.

I don't see why. I got it back because they didn't want it any more.
I wasn't in love with it either, that's why I donated it the first
time, and why I donated it again when I got it back. (Why did I wait
a year? I wasn't in any hurry, and I had higher priority calls on my
time.)

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#13 12-17-2008, 04:20 AM

- quote -

> no, that is not my question. Let's say a tax preparer screws up, and you
> pay taxes you didn't have to. The statute of limitations runs out. Can
> that tax preparer then be compelled to reimburse you for taxes you did NOT
> have to pay? I suppose this might also apply to investment houses, banks,
> etc. under some scenarios.
I will let you know in a year or two, as I have a case sorta like that now.

My attorney assures me that I will win, and the defense hasn't made such a
claim (yet).

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#12 12-17-2008, 02:02 AM

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

> no, that is not my question. Let's say a tax preparer screws up,
> and you pay taxes you didn't have to. The statute of limitations
> runs out. Can that tax preparer then be compelled to reimburse
> you for taxes you did NOT have to pay? I suppose this might also
> apply to investment houses, banks, etc. under some scenarios.

In that case it might be accounting malpractice, which might allow the
taxpayer to recover against the accountant. But it's a tricky area and
I haven't researched it in a long time, so if the case comes up, be
careful either way.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#11 12-17-2008, 01:41 AM

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B76B6ADB9F7Eavocatstuyahoofr[at]130.133.1.4...
- quote -

> "Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:
> > > Ok. Then I'll limit my comments to say that in general courts
> > > will not allow you to sue for recovery of taxes that you were
> > > properly required to pay, even if someone said you wouldn't have
> > > to.
> > > Will courts allow you to sue and recover for taxes paid that were
> > not properly required to be paid? This is a general question, I
> > don't know or care how it might fit into the White Elephant
> > scenario.
> If you're looking for repayment from the IRS, you might be able to get
> it. If you're looking for repayment from someone else, my recollection
> is that you generally won't get it. If a tax is properly payable by
> you, the courts are very reluctant to say that someone else has to be
> responsible for paying it.

no, that is not my question. Let's say a tax preparer screws up, and you
pay taxes you didn't have to. The statute of limitations runs out. Can
that tax preparer then be compelled to reimburse you for taxes you did NOT
have to pay? I suppose this might also apply to investment houses, banks,
etc. under some scenarios.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#10 12-17-2008, 12:57 AM

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

> > Ok. Then I'll limit my comments to say that in general courts
> > will not allow you to sue for recovery of taxes that you were
> > properly required to pay, even if someone said you wouldn't have
> > to.
> Will courts allow you to sue and recover for taxes paid that were
> not properly required to be paid? This is a general question, I
> don't know or care how it might fit into the White Elephant
> scenario.

If you're looking for repayment from the IRS, you might be able to get
it. If you're looking for repayment from someone else, my recollection
is that you generally won't get it. If a tax is properly payable by
you, the courts are very reluctant to say that someone else has to be
responsible for paying it.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#9 12-17-2008, 12:34 AM

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B769B3D0B9ACavocatstuyahoofr[at]130.133.1.4...
- quote -

> "Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:
> > Actually, I remain of the mind that the return was a gift. I have
> > seen little if any specific information to support theories to the
> > contrary.
> Except that nonprofits are generally not allowed to make gifts that are
> not within their exempt purpose. And even if it were considered a
> gift, the tax benefit rule might well require the taxpayer to recognize
> the income he had earlier written off.

Thank you for bringing up the tax benefit rule. But, it may not apply.
(then again, it might).

not exactly the White Elephant scenario, but from BNA
http://www1.bnasoftware.com/media_li...nefit_Rule.pdf
Tax Benefit Rule Exclusions

There are certain recovered amounts that are not subject to the tax benefit
rule:

... Exclusions covered by another provision in the tax code: When there is an

income tax provision that specifically excludes a recovered amount from
income,

that provision supersedes the tax benefit rule. For example, Code Section
102

excludes the value of gifts received. Therefore, if you claim a casualty
loss

deduction and later a friend gives you money to buy a replacement, the gift
is not

included in income

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

#8 12-17-2008, 12:33 AM

- quote -

> Ok. Then I'll limit my comments to say that in general courts will not
> allow you to sue for recovery of taxes that you were properly required
> to pay, even if someone said you wouldn't have to.

Will courts allow you to sue and recover for taxes paid that were not
properly required to be paid? This is a general question, I don't know or
care how it might fit into the White Elephant scenario.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

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