The Wolfe Law Group is pleased to advise of the firm’s recent IRS tax audit success for an entertainment industry client, which resulted in a multi-million dollar tax savings.
The client’s IRS tax audit victory established a new tax law precedent, i.e. a taxpayer’s “fraud” loss is tax deductible as a “theft loss” under the case, Gerstell v. Commr cited: 46 T.C. 161, which held that a “theft loss” is defined under state law (in taxpayer’s case, California Penal Code Section 484(a) which defines “theft” to include fraud).
Originally the IRS tax auditor disallowed taxpayer’s claimed tax loss but after IRS review of the tax opinion prepared by The Wolfe Law Group, the multi-million dollar tax loss was allowed and the tax payer saved $5million in tax savings and carry forward tax loss.
“There are many taxpayers who are saddled with similar claims and unaware of their legal rights,” exclaimed owner, Gary S. Wolfe. “We’re thrilled the IRS saw it the same way we did.”
The client was thrilled as well and offered the following congratulatory response:
Per our conversation, I just wanted to thank you once again for working with us on our Theft & Casualty Loss which resulted in a very substantial tax savings in excess of $3.3 million and established an NOL of $4.5million after you wrote your Tax Opinion and advised us to file the lawsuits. We are thrilled that your work and strategy held up under IRS audit, and once again it confirms your brilliance in Tax Law. We authorize you to post this letter on your website and to send copies of this writing to your clients.
Warmest regards, B.