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Duly Noted

Court Says Relief For Wrongfully Incarcerated Prisoners Doesn’t Apply To Relatives. The son and former wife of a man who spent six years in prison for a murder he didn’t commit cannot benefit from tax relief that Congress granted wrongfully incarcerated individuals, a federal court in Ohio ruled. Melinda Dawkins and Clarence Elkins II sought to reopen their bankruptcy cases to try to recover income taxes on their shares of $6 million in settlements that Clarence Elkins received after his release in 2005. But Bankruptcy Judge Russ Kendig refused on grounds that the law Congress passed in 2015 exempting such settlements from tax applies only to the convicted individual. On Dec. 16, 2016 — three days before the deadline for filing a refund claim — U.S. District Judge Benita Pearson affirmed Kendig’s ruling, preventing Dawkins and Elkins II from even asking the Internal Revenue Service whether it deemed them eligible for relief. In Re Melinda Louise Elkins et. al. vs. United States, 2016 TNT 244-17.

Account Transcripts Can Substitute For Estate Tax Closing Letters. In mid-2015, the Internal Revenue Service stopped routinely issuing “closing letters” to executors stating that the examination of the estate’s return is concluded. The letters were customarily required for many bank and real estate transactions needed to wind up an estate. In a new notice, the IRS pointed out that executors can still request a transcript of the estate’s tax account. According to the IRS, if the transcript includes the code 421, it denotes that the estate’s return has been accepted, making the transcript the “functional equivalent” of a closing letter. Notice 2017-12.

What Took So Long? A Pennsylvania man who was convicted of obstructing the Internal Revenue Service and willfully failing to file tax returns for more than 20 years had an unsurprisingly long history of tax protester litigation. James K. Schlosser of Bird-in-Hand, Pennsylvania, faces up to five years imprisonment and $450,000 in fines at a sentencing scheduled for June 10. According to a post-trial statement from the Justice Department, Schlosser testified that he stopped filing tax returns in 1994 because a Social Security number represented a biblical “mark of the beast.” In previous civil litigation stretching back more than a decade, Schlosser had raised a variety of other arguments deemed legally frivolous, including that income taxes are voluntary self-assessments and that as a resident of Pennsylvania, he is not subject to United States jurisdiction. 2017 TNT 47-8.

If you enjoyed this article, be sure to check out Palisades Hudson’s books, The High Achiever’s Guide To Wealth and Looking Ahead: Life, Family, Wealth and Business After 55. Both are available in paperback and as e-books.