here - Fuerst Ittleman David & Joseph, PL

More documents

Recommendations

Info

Case: 11-1612 Document: 003110561288 Page: 28 Date Filed: 06/13/2011 and to identify the source of each item shown on such return, nor [IRC] section 932(c)(4)(C), which required that he pay income tax to the USVI on his worldwide income. [IRC] section 6501(a) gives the IRS a period of up to three years from the date of the filing of a return to assess taxes due by the taxpayer. Since more than three years have passed since the taxpayer filed the tax return required by [IRC] section 932(c)(2), the IRS may not assess and collect additional tax unless other exceptions apply. [IRC] section 6501(a). FSA 199906031; 1998 FSA LEXIS 18 (December 18, 1998). 11 At the time the IRS focused its attention on the USVI, it was clear that the statute of limitations had run, or was about to run, on most of the taxpayers the IRS intended to audit. To avoid this fact, the IRS unilaterally changed the statute of limitations provisions under IRC § 6501 (this was necessary otherwise the ―Virgin Islands project‖ would have been for naught). Specifically, in Notice 2007-19, the IRS, without appropriate legislative process or delegated executive authority, took the unconstitutional position that the three year statute of limitations period for tax years ending before December 31, 2006, only applies to those individuals who filed with the BIR and who had less than $75,000 of gross income for the taxable year. Notice 2007-19. Subsequently, the IRS issued Notice 2007-31, which amended Notice 2007- 19. Notice 2007-31 states: ―[t]his notice announces that for taxable years ending on or after December 31, 2006, the U.S. federal statute of limitations for all U.S. 11 This is not an error; the Field Service Advice was dated December 18, 1998, but not published until 1999, hence the discrepancy in the dates. FUERST ITTLEMAN, <strong>PL</strong> 1001 BRICKELL BAY DRIVE, 32 ND FLOOR, MIAMI, FL 33131 • T: 305.350.5690 • F: 305.371.8989 • WWW.FUERSTLAW.COM 20 | P a g e
Case: 11-1612 Document: 003110561288 Page: 29 Date Filed: 06/13/2011 citizens and residents claiming to be bona fide residents of the U.S. Virgin Islands generally will commence upon the filing of an income tax return with the U.S. Virgin Islands (emphasis added).‖ Notice 2007-31; 2007-1 C.B. 971; 2007- 16 I.R.B. 971 at § 3 (April 16, 2007). This distinction should not go unnoticed. Notice 2007-31 marks a change in the IRS‘ position in that under Notice 2007-31 any person ―claiming‖ to be bona fide USVI resident is able to obtain the benefit of the three year statute of limitations period that Congress intended under IRC § 6501(a). This position is in stark contrast to Notice 2007-19 which applies the three statute of limitations period to only those that meet the definition of ―covered persons.‖ Notice 2007-19 at § 2. The District Court erred in its determination that the IRS‘ protracted audits of U.S. citizens who were residents of the USVI, that is predicated on violations of equal protection prohibited by the 14 th Amendment, and due process guaranteed in the 5 th Amendment, did not constitute an abuse of the District Court‘s process. The evidence of unconstitutional conduct can be found in the aforementioned two IRS pronouncements: Notice 2007-19 and Notice 2007-31. Notice 2007-19 and Notice 2007-31 demonstrate violations of the Equal Protection Clause of the 14 th Amendment and Due Process Clause of the 5 th Amendment. Normally, the legal lens in which one views disparate treatment under the law is FUERST ITTLEMAN, <strong>PL</strong> 1001 BRICKELL BAY DRIVE, 32 ND FLOOR, MIAMI, FL 33131 • T: 305.350.5690 • F: 305.371.8989 • WWW.FUERSTLAW.COM 21 | P a g e
Page 1 and 2: Case: 11-1612 Document: 00311056128
Page 3 and 4: CONCLUSION……………………
Page 7 and 8: 26 U.S.C. (IRC) § 6501…………
Page 27: Case: 11-1612 Document: 00311056128
Page 47 and 48: Case Case: 3:10-mc-00024-GEB 11-161
Page 55 and 56: Case 3:10-mc-00024-GEB Case: 11-161

here - Fuerst Ittleman David & Joseph, PL

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?