Keeping CPAs Up to Date on Tax Matters
A site devoted to articles on current developments in federal taxes geared toward CPAs in tax practice.
In the case of Duffy v. United States, US Court of Federal Claims, 115 AFTR 2d ¶2015-438 the taxpayers were looking to either exclude $50,000 in a legal settlement from income or have it taxed as capital gains—and they succeeded in neither attempt.
Read MoreThe IRS has issued another notice to “clean up” problems created by Congress’s delay in extending expired code provisions, waiting until late December to pass the Tax Increase Prevention Act of 2014 (TIPA 2014). In Notice 2015-13 the IRS provided procedures to be used for employers that hired individuals that retroactively qualify as “targeted” individuals during the period where the work opportunity credit under IRC §51 had expired.
Read MorePhishing scams masquerading as the IRS have now moved from attempting to get access to taxpayers’ personal information to attempting to obtain e-services and Electronic Filing Information Number (EFIN) information from tax professionals, according to IRS News Release 2015-31.
Read MoreA taxpayer who received advice from an adviser at a financial institution to which he planned to transfer her IRA was given relief by the IRS in PLR 201508021. That by itself is not unusual, but the nature of the “deficiency” in the advice was a bit unusual, as the situation was one where the IRS could have concluded that this was actually a taxpayer error, something the IRS has generally not been willing to forgive.
Read MoreThe Tax Court had to decide when a part of the gross income of an estate is considered “permanently set aside” for a charitable purpose as defined in IRC §642(c)(2) in the case of Estate of Belmont v. Commissioner, 144 TC No. 6. In such a situation an estate would be allowed a charitable contribution deduction for the year in which this occurred.
Read MoreThe continuing saga of employer reimbursement of individual health plans took another turn in IRS Notice 2015-17 which provides relief to taxpayers with arrangements in violation of Notice 2013-54.
Read MoreIn Notice 2015-15 the IRS attempts to address what constitutes employee’s consent to support a claim for refund of FICA taxes by an employer. Specifically the notice contains a proposed revenue procedure that would provide for requirements for employers who obtain electronic consent from their employees.
Read MoreFacing mounting pressure from various parties to grant relief, the IRS has provided an optional “simplified” method of complying with the new repair/tangible property capitalization regulations in Revenue Procedure 2015-20. In addition to issuing the ruling, the IRS also issued a press release (IR-2015-29) describing the relief.
Read MoreI will post more details shortly, but the IRS has issued revisions to the applicability of the tangible property/repair rules for "small businesses" in Revenue Procedure 2015-20.
Read MoreThe credibility of a taxpayer when testifying can often make or break a case at the Tax Court. That is especially true when the taxpayer is claiming certain defenses—such as the claim that funds the taxpayer deposited into her bank account were not truly her income, but that of her employer.
In the case of Na v. Commissioner, TC Memo 2015-21 the taxpayer’s testimony was found to be credible.
Read MoreMerely charging your daughter a monthly rent that is at or above fair rental isn’t enough if you actually don’t do much to attempt to collect the rent. This lesson was learned by the taxpayer in Savello v. Commissioner, TC Memo 2015-24.
Read MoreThe U.S. Supreme Court resolved a split among lower courts regarding whether severance payments under a severance plan are subject to FICA, overruling the holding of the Sixth Circuit Court of Appeals in the case of United States v. Quality Stores, 113 AFTR 2d 2014-1326 reversing CA6, 110 AFTR 2d 2012-5827. The IRS, nearly eleven months later, officially announced [Announcement 2015-8] that based on that decision the agency was going to deny all pending claims for refund.
Read MoreThe IRS Office of Professional Responsibility has issued Alerts from the Office Professional Responsibility Issue 2015-02 that discusses the implications of a preparing using Form 1099C as a “collection tool” to encourage clients to pay the balances due to the professional.
The alert specifically avoids giving a direct answer on whether the proposed conduct violates federal law and/or provisions of Circular 230, but certainly raises areas of concern.
Read MoreClients are known to misplace tax related documents which can complicate the process of getting their tax returns completed. However, over time more and more organizations have established processes to let taxpayers download additional copies of tax documents online.
Now the Social Security Administration has joined that group. In a News Release the Social Security Administration announced that social security beneficiaries will be able to obtain a copy of their Form 1099-SSA from the agency’s website.
Read MoreIn Revenue Procedure 2015-19 the IRS released the limits on depreciation for vehicles subject to the limitations of §280F(d)(7)(B)(i) for items placed in service in 2015, as well as the revised limits for 2014 for autos qualifying for bonus depreciation under IRC §168(k). The latter revisions were needed since Congress finally extended the bonus depreciation rules through the end of 2014 in the Tax Increase Prevention Act of 2014, signed into law on December 19, 2014.
Read MoreThe case of Saenz v. Commissioner, TC Summary Opinion 2015-6, turned on whether Leticia Saenz’s daughter, who filed a joint return for 2011, was actually married to the person she filed a joint return with.
Read MoreIn the case of SI Boo v. Commissioner, TC Memo 2015-19 the proper tax treatment of real property sales from property obtained by the taxpayer due to their business of acquiring Illinois tax liens was in question.
Read MoreThe Eleventh Circuit Court of Appeals took a look at what constitutes research funded by a third party in the case of Geosyntec Consultants, Inc. v. United States, CA 11, 115 AFTR 2d ¶ 2015-384.
Read MoreIn Action on Decision 2015-01 the IRS announced that it will not follow the Tax Court’s decision in four cases that were decided on the same day in 2004 that involved the interaction of the bankruptcy code and taxation of partners on cancellation of debt income.
Read MoreWhen a LLC “checks the box” by filing a Form 2553 to elect to be treated as a corporation and simultaneously elect S status, it must live by all the S corporation restrictions. That includes the restriction on only having one class of “stock” issued by the entity during the time it wishes to remain an S corporation.
In reality, there is no such federal tax entity as an “LLC”—the structure was originally designed when the first statute was adopted by Wyoming decades ago to be an entity for which there was no federal tax treatment specifically mandated. To this day the IRC does not have provisions outlining the tax treatment of “LLCs” but rather, under the check the box regulations found at Reg. §301.7701‑2 the entity is treated for federal tax purposes as one of the entities that the IRC knows about.
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