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.
The IRS has provided information on how a victim of tax related identity theft may obtain a copy of the return filed by the other party at https://www.irs.gov/Individuals/Instructions-for-Requesting-Copy-of-Fraudulent-Returns.
Read MoreIn Revenue Procedure 2015-56 the IRS provided a safe-harbor method that may be used by certain taxpayers operating a retail establishment or restaurant for remodel-refresh costs.
One key restriction is that this safe harbor may only be used by taxpayers that have applicable financial statements (AFP) as referred to in the tangible property regulations that took effect in 2014. Such statements are defined at Reg. §1.263(a)-1(f)(4)—and many small businesses will not have a statement.
Read MoreIn the case of Green v. United States, 116 AFTR 2d ¶ 2015-5394, US District Court, Western District of Oklahoma, Case No. CIV-13-1237-D the court was asked to decide the application of the charitable contribution provisions applicable to trusts and estates under IRC §642 and a donation of appreciated property.
Read MoreThe IRS in Notice 2015-77 extended until the 2017 tax year the safe harbor method originally provided for in Notice 2013-7 of reporting payments made on a home mortgage that had received relief from a state housing agency from the Hardest Hit Fund (HFA Hardest Hit Fund). The notice also extended relief from penalties related to information returns for mortgage services and state housing agencies due to payments made under the program.
Read MoreIn Chief Counsel Email 201545025 the issue involved whether the use of an approved private delivery service was acceptable for delivery to the IRS of notices of non-judicial sales.
IRC §7425 deals with the IRS’s rights when the service obtains a lien on property. Generally such a lien is not impacted by any judicial proceeding to which the IRS is not a party. A limited exception occurs in certain cases described in IRC §7425(b) if the IRS is properly notified of the proceeding.
Read MoreIn Chief Counsel Advice 201545017 the IRS looked at whether an amended return was timely filed where an attempt was made to file it electronically prior to the expiration of the statute, the return was rejected and then a paper return was filed without contacting the e-Help desk to make a waiver request to file on paper.
Read MoreIn TAM 201544025 the IRS decided that a foundation's weekly sales bazaar income is not substantially related to its tax exempt purpose, nor does it qualify for the rental exception for rental of real property under IRC §512(b).
Read MoreIn Chief Counsel Advice 201544024 the Chief Counsel’s office ruled that it was not permissible for one representative on a Form 2848 to sign the Form 2848 on behalf of another representative.
In the case discussed, there were three representatives appointed on the Form 2848 to represent the taxpayer. However, one of the representatives had not personally signed the form, but rather another representative signed the form “on behalf” of the third representative when the document was completed.
Read MoreThe IRS National Office determined that the proper life for amortization of an acquired domain name is 15 years in Chief Counsel Advice 201543014. That was true whether the domain name was a generic domain name (one that doesn’t refer to a specific company or product name, say “dogfood.com”) or a non-generic domain name (one that is associated with a specific company, product or service name, such as “microsoft.com”).
Read MoreThe IRS issued a Fact Sheet (FS-2015-24) that discusses tax preparers and their obligations with regard to protecting their clients from data theft as well as generally securing taxpayer information.
Read MoreIn the case of The Howard Hughes Company, LLC v. Commissioner, 142 TC No. 20, the Tax Court clarified the limit of its decision in Shea Homes, Inc. v. Commissioner, 142 TC No.3, denying the completed contract method to a developer that did not actually construct homes in this case. On appeal, the Fifth Circuit accepted the Tax Court’s analysis (The Howard Hughes Company, LLC v. Commissioner, CA5, Nos. 14-60915, 14-60921, AFTR 2d ¶ 2015-5368).
Read MoreThe summer of 1972 had the break-in at the Watergate office complex in Washington DC on June 17. While that event is now the subject of history books, an event that took place just over a month later just recently was the featured issue in tax litigation. In the case of Estate of Redstone v. Commissioner, 145 TC No. 11 the issue became whether or not a gift had taken place back in 1972, a gift the IRS now sought to collect gift tax on. Since no gift tax return had been filed, the statute remained open for the IRS to assess and attempt to collect the tax it claimed was due.
Read MoreThe Bipartisan Budget Act of 2015 at Title XI provides for changes to be made to partnerships. The most significant is a major change in how examinations of partnerships will be handled by default, while a second change attempts to clarify the family partnership provisions of the IRC.
Read MoreAn estate argued that it should be excused from late filing penalties because it had relied on the advice of an attorney—but the court in the case of West, et al v. Koskinen, 2015 TNT 203-11 (USDC Eastern District Virginia) determined that, in fact, there had been no advice received from the attorney on this matter.
Read MoreThe IRS announced in News Release IR-2015-118 the inflation adjusted limitations imposed on qualified plans for 2016. Aside from the Roth phase-out levels, the other items noted below are not changed from their 2015 amounts.
Read MoreThe IRS released inflation adjusted amounts for 2016 in Revenue Procedure 2015-53.
Read MoreIf a taxpayer is a trader and properly elects under IRC §475(f) to use the mark to market treatment, the gains and losses from the trading activity are treated as ordinary, rather than capital, gains and losses. Of particular significance is that losses in excess of gains will not be subject to a $3,000 annual limitation.
In the case of Poppe v. Commissioner, TC Memo 2015-205 the question at hand was whether, in fact, Mr. Poppe had ever properly made the election in question.
Read MoreAn annual fee to fund the “Patient Centered Outcome Research Institute” (the PCORI fee) is imposed on either:
The Social Security Administration has provided on the Employment Coverage Threshold page on their website, information on the coverage threshold levels for domestic workers in 2016. The threshold will increase to $2,000 in 2016 from the $1,900 that had been the amount for the prior two years.