Congress V. IRS
Has anyone ever heard that congressional law regarding dealer status takes precedence over IRS tax law? I was recently at a meeting held by John Hyre (tax attorney, CPA) and he claims that the IRS cannot make you pay taxes on the entire amount when using lease-options and the like (carry back notes, etc.).
Does anyone know either about the man or the law?
The tax code is federal law enacted by Congress. The IRS does not make the law, but, is charged with enforcement of the tax codes.
At this meeting with John Hyre, did he give you any authorities or citations in the tax code that support the position you claim? Perhaps references in case law?
If so, you should check the authorities yourself and, with your own tax advisor, determine whether the position advocated is too aggressive (risky) for you or has a solid foundation in the tax codes. Perhaps Mr. Hyre has found a valid loophole we can all use until Congress changes the tax code to close the loophole.
Let us know.
DaveT,
Why did I just know deep down this was going to come up.
Maybe because we discussed this in a private message, do you suppose, or maybe another reason.
John $Cash$ Locke
For all TCI members planning to attend the convention:
I notice that Albert Aiello is one of the TCI convention speakers. I am told that Mr. Aiello markets a tax reduction manual for real estate investors that provides audit-proof references in the tax code for each strategy mentioned in his manual.
If Mr. Aiello has heard about this very topic, perhaps he will address it during the question period following his presentation IF you ask the question.
I do not have any details on Mr. Hyre's strategy and very little general knowledge on it as well, but I can only suspect that if there is a basis for his position with regard to a Contract for Deed, it is related to the completed contract method of accounting. If this accounting method is the sole basis for this tax strategy, then I will wait until this strategy has been tested and vindicated in Tax Court before I will put it in play.
Perhaps Joel can give Mr. Aiello a heads up on this topic and ask Mr. Aiello to include specific comments about this strategy in his presentation.[ Edited by DaveT on Date 01/25/2004 ]