2019-08-24 Watching Paint Dry Doesn't Count

Current Federal Tax Developments for the week of August 26, 2019: Watching Paint Dry Doesn’t Count

• Taxpayer found both to have chosen the accrual method and to be required to use it as well

• §451 proposed regulations exit OIRA review

• Taxpayers records found to overstate hours by 150 hours, not qualified as a real estate professional

• IRS issues formal memo changing position on ability to claim foreign tax credit on certain French taxes

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2019-08-26 Current Federal Tax Developments

2019-08-19 George M Would Be Proud

Current Federal Tax Developments for the week of August 19, 2019: George M Would Be Proud...

• Taxpayer “wins” on a Cohan style case, but things don’t really go well

• Qualified plan distribution is part of taxable income for the taxpayer even if the taxpayer doesn’t cash the check

• An estate cannot avail itself of the economic disability tolling of the statute of limitations (and it wouldn’t have mattered anyway).

• IRS to send out estimated tax penalty refund checks to 400,000 taxpayers

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2019-08-19 Current Federal Tax Developments

2019-08-12 Toto Needs Sales Tax Money

Current Federal Tax Developments for the week of August 12, 2019: Dorothy and Toto Need Money

• Kansas releases out of state seller rules that have no de minimis levels

• Memorandum holds that partial denial of earned income tax credit can lead to loss of all credit for following two years

• Tennessee court finds that Boyle rule still applies, taxpayer cannot rely on preparer to efile extension

• New online tax withholding estimator released by IRS, second revised Form W-4 follows shortly after

• Revised third-party contact rules released prior to Taxpayer First Rule change that takes effect August 15, 2019

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2019-08-12 Current Federal Tax Developments

2019-08-05 About That Bitcoin

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response

• Relief granted on three bonus depreciation elections for year that includes September 28, 2017

• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting

• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual

• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively

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2019-08-05 Current Federal Tax Developments

2019-07-29 1982 Tax Form Nostalgia Week

Current Federal Tax Developments for the week of July 29, 2019: 1982 Tax Form Nostalgia

• IRS releases final regulations on §501(c)(4) notice

• Taxpayers who paid certain French taxes may have refund opportunities

• Six new compliance initiatives announced by IRS

• Minor relief granted to file superseding returns to some CPAR covered partnerships

• IRS releases a new draft version of Form 1099-NEC for the first time in 38 years

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2019-07-29 Current Federal Tax Developments

2019-07-22 The Short Lived 1040 Postcard

Current Federal Tax Developments for the week of July 22, 2019: The Short-Lived 1040 Postcard

• Taxpayer who failed to file a signed Form 8332 with his return was denied the dependency exemption even though he eventually got a signed form

• IRS updates list of allowed preventive care for high deductible health plans

• IRS debuts new Form 1040-SR and revises Form 1040 to get rid of the postcard on draft 2019 forms the agency released

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2019-07-22 Current Federal Tax Developments

2019-07-15 Fixing Typos Proves to Be Hard

Current Federal Tax Developments for the week of July 15, 2019: Typos are Hard to Catch

• Taxes-Security-Together Checklist for tax professionals issued by the IRS

• Tax Court found that taxpayer was victim of a bookkeeping error and had sent IRA rollover contribution to custodian, late rollover allowed

• IRS discovers 31 years after the fact that a typo fix never was picked up in the Code of Federal Regulations

• Frequently asked questions page issued to explain TCJA change to §704(d) partner basis limits on charitable deductions and foreign taxes

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2019-07-15 Current Federal Tax Developments

2019-07-08 Congress Enacts the Taxpayer First Act

Update for the week of July 8, 2019. This week we look at:

• The Taxpayer First Act of 2019, signed into law on July 1, 2019

• The Supreme Court decides one trust due process case is enough for a single term

• IRS proposed a change in MEP to allow a solution to the one bad apple problem

• IRS goes back to issuing guidance via website FAQs, this time for QOFs

• Employers will be able to truncate SSNs on W-2s given to employees--but not right away

• IRS finalizes regulations barring partnerships from using disregarded entities to put partners on the payroll

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• 2019-07-08 Current Federal Tax Developments

• Taxpayer First Act of 2019 Highlights

2019-07-01 About that Drive from Florida to South Africa

Current Federal Tax Developments for the week of July 1, 2019:

• IRS issues notice to advisers regarding what to do in the event of a data breach

• IRS official confirms a §199A trade or business can include both commercial and residential rental

• Taxpayer found Tax Court didn't believe his vehicle logs

• Transaction found to be substantially similar to a listed transaction

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2019-07-01 Current Federal Tax Developments

2019-06-24 Supreme Court Just Says No

Current Federal Tax Developments for the week of June 24, 2019: SCOTUS Just Says No

• Proposed regulations issued on qualified agricultural cooperatives

• US Supreme Court rules mere residence of beneficiary not enough to all state to tax entire income of trust

• Taxpayer had a proper claim of right situation when she paid ½ of wages paid back by ex-spouse

• IRS finalizes non-resident alien ESBT regulations

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2019-06-24 Current Federal Tax Developments

2019-06-17 Bring on the New HRAs

Current Federal Tax Developments for the week of June 17, 2019: Bring on the New HRAs

• IRS to stop faxing transcripts, only mail them to taxpayer’s address of record

• Final regulations issued for state tax credit donations and new way to report credit as tax paid

• IRS finalizes regulations creating two new HRAs

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2019-06-17 Current Federal Tax Developments

2019-06-10 Being Yourself as a Business

Current Federal Tax Developments for the week of June 10, 2019: Being Yourself as a Business

• S corporation status lost when SMLLC shareholder adds a new interest holder

• Tax Court does not accept author’s attempt to treat a portion of her income as not self-employment income

• IRS releases employer tables and worksheets for TCJA-aware draft Form W-4

• TIGTA finds that LB&I imposes accuracy-related penalties at lower rate than does SE/SE

• Envelope used to file Tax Court petition lacked postmark, taxpayer could not explain delivery much later than would be expected for timely mailed document

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2019-06-10 Current Federal Tax Developments

2019-06-03 Sweating the Details (or Lose Out)

Current Federal Tax Developments for the week of May 28, 2019: Sweating the Details (or Lose Out)

• Evangelizing did not give rise to charitable deduction for most expenses

• DC Circuit agrees with Tax Court that failure to disclose basis of asset doomed $33 million contribution

• Taxpayers lose nearly $1 million of basis due to lack of old documents

• IRS tries one more time to develop a W-4 for the TCJA era

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2019-06-03 Current Federal tax Developements

2019-05-28 Another New Tax Bill?

Current Federal Tax Developments for the week of May 28, 2019: Another New Tax Bill?

• Virtual currency guidance promised by IRS Commissioner

• HSA numbers for 2020 released by IRS

• Auto depreciation limits for 2019 released by IRS

• House passes retirement reform bill, would drastically cut back on the use of stretch IRAs

• Assistant US Attorney warns preparers about criminal exposure when they don’t raise enough issues about loans

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2019-05-28 Current Federal Tax Developments

2019-05-20 Schedule D Problem

Current Federal Tax Developments for the week of May 20, 2019: Schedule D Problem

• Review Wolters Kluwer IRS response and other issues

• IRS releases a new worksheet for computing tax when there are 25% or 28% gains

• Tax Court finds IRS did not have authority to find Medicare difficulty payments nontaxable in Notice 2014-7

• CA10 agrees with Tax Court that S corporation cannot accrue wages on participants

• Taxpayer materially participated in activity under facts and circumstances test

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2019-05-20 Current Federal Tax Developments

2019-05-13 Malware, Cybersecurity and Tax Practice

Current Federal Tax Developments for the week of May 13, 2019: Malware, Cybersecurity and Tax Practice

• Wolters Kluwer CCH systems suddenly taken offline due to malware issue

• GAO criticizes security of e-file providers and software developers

• IRS updates maximum vehicle values for cents-per-mile and FAVR

• IRS clarifies redemptions treated as dividends taxation when paid during post-termination transition period

• Deduction for Connecticut estate taxes must be reduced by portion allocable to state’s gift taxes added back paid in 3 prior years

• My boss ordered me to do it doesn’t work for trust fund penalty even when the boss is an agent of a federal

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2019-05-13 Currrent Federal Tax Developments

2019-05-06 Fragile Handle with Care: S Corporations

Current Federal Tax Developments for the week of May 6, 2019: Fragile: Handle with Care - S Corporations

• Taxpayer’s marriage forces repayment of advance PTC, unfairness is not a defense

• State tax refundable credit in excess of taxes is taxable income to taxpayer

• IRS expands determination letter to cover a limited number of existing plans

• LLC operating agreement adoption terminates S election

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2019-05-06 Current Federal Tax Developments

2019-04-29 Q&A 33 - The IRS FAQ Says What?

Current Federal Tax Developments for the week of April 29, 2019: Q&A 33 - The IRS FAQ Says What?

• Taxpayer finds expense can’t be assigned to business based on best result

• IRS greatly expands the FAQ on Section 199A, including a major surprise to many on handling S corporation shareholders

• IRS updates the EPCRS program to add more self-correction options

• Chief Counsel Email holds that using a PEO does not allow a partner to be treated as the employee of partnership

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2019-04-29 Current Federal Tax Developments

2019-04-22 IRS Gets Busy After Tax Season

Current Federal Tax Developments for the week of April 22, 2019: IRS Gets Busy After Tax Season

• Draft forms issued to be used to report §199A deduction on 2019 returns

• Proposed regulations address NRA potential current beneficiaries of ESBTs that are also grantor trusts

• Memorandum address impact of §318 attribution rules on §1372 and self-employed health insurance deduction

• Second (and maybe final) set of proposed regulations on opportunity zone issues

• Ninth Circuit decides IRS regulations did remove the ability to use common law mailbox rule to prove timely filing

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2019-04-22 Current Federal Tax Developments

2019-04-16 Still to Come on TCJA

Current Federal Tax Developments for the week of April 16, 2019: Still to Come on TCJA

• §199A - Mainly Post-Final Regulation Issues

• §163(j) - Proposed Regulations Out, Awaiting Final Regulations

• Depreciation - Will the Retail Glitch Get Fixed? And When?

• SALT - Soon to be released final regulations on state tax credits and then what

• §461(j) - Limit on business losses - where’s the guidance

• Other areas

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