2023-07-17 IRS Extends RMD Relief by One Year

This week we look at:

• IRS extends SECURE Act inherited IRA RMD relief for one additional year, adds special rollover rule for those born in 1951 due to SECURE 2.0 Act changes

• IRS grants relief to victims of Vermont flooding.

• Failure to attach simple election leads to requesting (and paying for) 11 separate private letter rulings

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Slides and links to this week’s write-ups can be downloaded below:

2023-07-17 Current Federal Tax Developments

2023-07-10 Research Credit Blues

This week we look at:

• S corporation loses on research credit claim and gets hit with penalties - risks of a credit study

• Exempt organization status denied for organization formed to raise funds for one person’s medical bills

• Discussion of tax research hierarchy in this short week

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2023-07-10 Current Federal Tax Developments

2023-07-03 Supreme Court, Protective Claims and 965 Transition Tax

This week we look at:

• Supreme Court takes on §965 transition tax case for upcoming term: what do we do to protect our clients?

• The IRS releases draft versions of key 2023 partnership income tax returns

• Firefighter’s sexual harassment complaint settlement was not excludable from income

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2023-07-03 Current Federal Tax Developments

2023-06-26 Sherlock Holmes and Tax Research

This week we look at:

• IRS ends COVID-19 relief for high deductible health plans effective for plan years ending after 12/31/24

• Taxpayer fails in attempt to get IRS permission to make a late §475(f) mark to market election

• Taxpayer who filed Tax Court petition 11 seconds too late due to technology challenges has petition dismissed

• Sherlock Holmes on tax research

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2023-06-26 Current Federal Tax Developments

2023-06-19 What Could Be the Harm of Filing an ERC Claim?

This week we look at

• OIRA is no longer going to review IRS regulations before issuance

• IRS updates list of automatic accounting method changes

• Proposed regulations issued on transfers of certain energy credits and DirectPay for certain credits

• What can go wrong with an employee retention credit refund claim?

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2023-06-19 Current Federal Tax Developments

2023-06-12 Opening Offer in Negotiations for 2023 Tax Package

This week we look at:

• 3 proposed tax bills introduced by Chair of House Ways & Means Committee

• Wellness indemnification payment is taxable income to employee and subject to payroll taxes

• IRS grants request to make election to skip claiming bonus depreciation when partnership discovers claiming bonus is bad news at the state level for certain partners

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2023-06-12 Current Federal Tax Developments

2023-06-05 Hobby Losses Expenses Effectively Nondeductible

This week we look at:

• Fourth Circuit does not agree with view expressed by Seventh Circuit in Menard, Inc. that C corporation reasonable compensation only depends on a reasonable return to investors

• Eleventh Circuit holds that “hobby loss” expenses under §183 are miscellaneous itemized deductions

• Elderly attorney had reasonable cause for failure to file payroll tax returns and timely pay payroll tax liabilities

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2023-06-05 Current Federal Tax Developments

2023-05-30 Failure to File Claim Via Certified Mail Was a Bad Idea

This week we look at:

• Tax Court finds they have no authority to review the IRS notice for certification of seriously delinquent tax debt to State Department

• IRS publishes warning signs for employers to use to identify ERC scams

• Fourth Circuit finds that Section 7502 fully supplants common law mailbox rule for filing documents

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2023-05-30 Current Federal Tax Developments

2023-05-22 Supreme Court and IRS Giving Notice of Summons

This week we look at:

• Supreme Court rules in favor of IRS on issue of when notice must be sent when the IRS issues a third-party summons

• IRS agent gets distracted by small issues, fails to investigate potentially much larger one and it costs the IRS at Tax Court

• IRS announces 2024 HSA and excepted benefit HRA inflation adjusted amounts

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2023-05-22 Current Federal Tax Developments

2023-05-15 The PEO and Your ERC Refund

This week we look at:

• IRS email discusses issues that arise with payroll tax refunds when a PEO is involved who itself has unpaid tax liabilities

• Letter ruling provides that Forms 1099-C must be filed by a credit union due to writing off certain debts as part of a legal settlement

• IRS plans to add more detail to partnership K-1 liability disclosures on 2023 returns

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2023-05-15 Current Federal Tax Developments

2023-05-08 Time Zones and Timely Electronic Filings

This week we look at:

• IRS issues CCA making clear how strict the §125 substantiation rules are

• Taxpayer’s lack of documentation forces him to accept preparer’s gross gambling winnings and limits his gambling loss deduction

• Tax Courts finds that last second rule for filing a Tax Court petition is not the same as for returns filed via eFile

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2023-05-08 Current Federal Tax Developments

2023-05-01 Court Unimpressed by Claimed CRAT Magic

This week we look at:

• More CRAT problems - but this one the IRS had warned against using

• Change of protocol underlying cryptocurrency from proof of work to proof of stake is not a taxable event

• Fact some countries now treat Bitcoin as legal tender does not change its status as property, not foreign currency

• Taxpayer finds they had to wait a year to claim a deduction for cashier’s check purchased to settle legal dispute

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2023-05-01 Current Federal Tax Developments

2023-04-23 Catching Up After Tax Season

This week we look at:

• Another taxpayer fails to establish either spouse as a real estate professional

• SPIFF was not a separate trade or business

• IRS releases revised Form 3115

• IRS letter to Senator on PEOs and ERC

• FinCEN publishes FAQ on Corporate Transparency Act reporting

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2023-04-23 Current Federal Tax Developments

2023-04-03 EV Battery Rules Released

This week we look at:

• IRS announces non-acquiescence in Tax Court case on taxpayer asserting substance over form

• IRS highlights bad tax advice on social media

• IRS rules that assets held in intentionally defective grantor trust do not obtain date of death basis

• IRS releases proposed battery regulations for new EV credits

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2023-04-03 Current Federal Tax Developments

2023-03-26 ERC Scams Lead the Dirty Dozen

This week we look at:

• IRS begins 2023’s Dirty Dozen Tax Scams with problematical ERC refund claims

• IRS announces position on evaluating when a non-fungible token is a collectible

• C corporation not allowed to take home office expenses for owner-employee’s home

• IRS email reminder that BBA opt-outs must be made on original returns

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2023-03-27 Current Federal Tax Developments

2023-03-20 Taxes and Medical Expenses

This week we look at:

• Trust that was meant to be a CRAT found not to be one and attempted fix was too late and not undertaken correctly

• PLR looked at whether item for consumption by infant to reduce risk of developing a condition was all or partially a medical expense

• IRS produces FAQ on whether different types of health expenses qualify as medical expenses

The slides and links to the documents can be downloaded here:

2023-03-20 Current Federal Tax Developments

2023-03-13 Seaview Trading Reversed in Ninth Circuit

This week we look at:

• IRS and OPR issue separate warnings on ERC claims

• Ninth Circuit reverses Seaview Holdings LLC decision after en banc hearing, partnership return not forwarded to Ogden was never filed

• IRS gives financial institutions RMD notice relief

• S corporation accidentally ended its status by revising its LLC operating agreement

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2023-03-13 Current Federal Tax Developments

2023-03-06 Non-Willful FBAR Penalty is on a Per-Form Basis

This week we look at:

• Deposit and use by sheriff of jail meal money not found to be a mere misunderstanding

• Amounts taxpayer expected to repay with future earnings found not to be loans, taxable upon receipt

• SCOTUS rules non-willful FBAR failure is a per-form not per-account penalty

• CPA fails to provide substantiation for deductions for practice

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2023-03-06 Current Federal Tax Developments

2023-02-27 More Information Returns Required to be E-Filed

This week we look at:

• Proposed regulations issued for retirement plan forfeitures

• OIRA completes review of crypto broker proposed regulations, expected to be issued shortly

• IRS extends relief for taxpayers impacted by disasters in California, Alabama and Georgia

• IRS issues final business electronic filing mandate regulations

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The slides and links to the documents discussed can be downloaded below:

2023-02-27 Current Federal Tax Developments

2023-02-20 IRS Starts Allow Some Online Uploads of Documents for Notices

This week we look at

• IRS announces program to accept upload of documents in response to some, but not all, notices to taxpayers

• SECURE 2.0 Section 603 drafting glitch puts catch-up contributions at risk for 2024 as various parties push to get a fix

• IRS will not automatically challenge §199A deduction for cannabis businesses-but W-2 wage problems may get in the way

A copy of the slides and links to related material can be downloaded below:

2023-02-20 Current Federal Tax Developments