Despite a more pliable attitude toward the wealthy, the Internal Revenue Service (IRS) continues to take issue with high-asset earners who may have tax deficiencies, like Britney Spears.
Well-known entertainer, Britney Spears, has had her ups and downs in recent years. In 2024, She settled a lawsuit with her father Jamie Spears following the termination of a 13-year conservatorship under which he controlled the life, finances and major decisions made by his adult daughter. In June 2021, Ms. Spears was granted the right to retain her own legal counsel instead of court-appointed counsel. Her choice of legal counsel, Mathew Rosengart, an experienced former prosecutor and leading entertainment attorney, likely fast-tracked the matter to return Ms. Spears' right to govern her own life and finances.
Challenging IRS tax litigation
The IRS claims that Ms. Spears has a tax liability of more than $600,000 along with an additional penalty of $120,000. This tax controversy arose after the IRS made an adjustment of $1.4 million to the amount of taxable income reported by Ms. Spears through her company, Shiloh Standing, Inc., for the tax year 2021. The adjustment and corresponding increase in taxable income followed the IRS disallowing certain business and medical expenses.
In response to the notice of deficiency issued by the IRS, legal counsel for Ms. Spears filed a petition to redetermine the claimed deficiency and revisit the penalty assessment. The petition, reported by Tax Notes, reflects that the entire action is in dispute. The petition asserts Ms. Spears has no deficiency and that proper records exist to support the expenses at issue.
With regard to information reported and deductions and expenses claimed on income tax returns, the taxpayer bears the responsibility of providing evidence supporting those positions. This is called the burden of proof. The petition filed on behalf of Ms. Spears states that sufficient proof has already been provided, shifting the burden of proving IRS allegations back to that agency.
The petition marks the opening stage in what may be a lengthy effort to challenge the IRS assessment. Further developments will follow.
The denial of expenses during an IRS audit is a common occurrence. In this case, the issue has drawn national attention due to the celebrity status of the taxpayer. If you receive an adjustment notice or an IRS tax audit letter review it carefully and consider whether professional guidance from an experienced tax attorney may be appropriate if the disagreement is considerable. Additional background on common tax law concerns is available in the firm's guide, "Since You Asked: 15 Common Tax Law Questions & Answers."
Seeking skilled legal advice on tax compliance?
If you receive a notice of deficiency or IRS audit letter, experienced legal guidance can help clarify available options. At Robert J. Fedor, Esq., L.L.C., we provide representation for individuals and businesses facing IRS audits, tax disputes and compliance concerns. Contact the firm at 440-250-9709. We serve domestic and international clients from our offices in Cleveland and Chicago.
