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nondischargeable due to a “be- LINE
lated acceptance of responsibility” ITEMS
demonstrating a lack of an honest
and reasonable attempt to meet tax
requirements under the Beard test. In
one, Hatton II, 220 F.3d 1057 (9th For these full stories plus the latest tax news, visit
Cir. 2000), the taxpayer failed to file a journalofaccountancy.com and thetaxadviser.com.
federal tax return on his own initia-
tive and attempted to do so only after IRS blames old tech in destruction of
the IRS threatened a levy and seizure information returns
of his property, followed by months of The IRS responds to a report by the Treasury Inspector
negotiations on an installment agree- General for Tax Administration that pointed to the
ment. In the other, Smith, 828 F.3d March 2021 incident as one example demonstrating a
1094 (9th Cir. 2016), the taxpayer need for the Service to increase e-filing options.
failed to file a return until seven years
after it was due, three years after the IRS audit rates decreased most for wealthy,
IRS had determined a deficiency and GAO finds
issued an assessment. In a study, the U.S. Government Accountability
Holding: The bankruptcy court Office finds that the IRS’s individual tax audit rates
held that Golden and Alter’s tax debt decreased by 72% during 2010–2019, by a greater
could be discharged in bankruptcy, de- percentage for higher-income taxpayers than for
spite the late filing of their return. The lower-income ones.
court concluded that their conduct was
not analogous to that of the taxpayers Staffing shortages, backlog hampered IRS
in the Ninth Circuit cases. in 2022 filing season, TIGTA says
Looking at the couple’s intent when The Treasury Inspector General for Tax Administration
they filed the 2008 return, as required issues a preliminary assessment of the IRS’s performance
by 11 U.S.C. Section 523(a)(1)(B), during the period for income tax filings.
the court determined they had made
an honest and reasonable attempt Inflation boosts HSA amounts for 2023
to satisfy the requirements of the Health savings account maximum contributions, along
tax law. with minimum deductibles and maximum out-of-pocket
Among facts and circumstances the expenses of accompanying high-deductible health plans,
court pointed to as evidence of this will be higher next year.
were that:
■ The IRS received the return about Helping build a better tax system (podcast)
150 days after it had mailed the A CPA describes his journey from a small practice to
notice of deficiency; advising the IRS and Congress on issues of tax policy
■ The taxpayers experienced financial and administration.
and marital difficulties;
■ The reason for their delay was
Golden’s attempt to determine how
to pay the balance owed; The taxpayers’ disruptive financial court stated. Accordingly, the evidence
■ On the basis of the late return, the and personal events were not excuses was considered to show a reasonable
IRS reduced the outstanding tax but did explain their lapses toward their effort to comply with the law, and the
obligation; tax obligation, which they did not seek court granted the taxpayers’ motion
■ The taxpayers paid in full all to avoid and hide from but took steps for discharge.
priority and secured tax claims in to correct, the court said. Although ■ In re Golden, No. 14-24616-E-13
bankruptcy totaling $58,060 and they filed late, they “did not act with a (Bankr. E.D. Cal. 4/27/22)
paid a dividend of $1,222 on the belated acceptance of responsibility or
remaining $30,665 general unse- in an attempt to present inaccurate or — Paul Bonner is a JofA senior news
cured claim. fabricated information” to the IRS, the writer. ■

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