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1. 2014 tax software survey  

BY Paul Bonner
For the second year in a row, the beginning of income tax filing season was delayed. This year, the delay was due to a 16-day partial government shutdown in October 2013 that resulted in a Jan. 31 start date for the IRS to accept electronically filed returns. Other complicating factors included the advent of the net investment income tax, the new 39.6% top tax rate bracket, and the return of the itemized deduction limitation and personal exemption phaseout.Software vendors nonetheless managed to roll out their updated versions on time, and users were generally satisfied with the results

2. ERISA: 40 years later  

BY Rebecca J. Miller, CPA, Robert A. Lavenberg, CPA, J.D. and Ian A. MacKay, CPA, CGMA
Forty years ago, Congress passed landmark legislation to protect workers’ pensions from abuses. The Employee Retirement Income Security Act (ERISA), which President Gerald Ford signed into law on Labor Day, Sept. 2, 1974, greatly expanded the federal government’s role in regulating private-sector retirement plans and made the government the guarantor of private pensions by creating the Pension Benefit Guaranty Corp.

3. Success-based fees and milestone payments   CPEDirect

BY Alistair M. Nevius
When taxpayers incur costs that relate to an acquisition or restructuring, they generally must capitalize any costs incurred to facilitate (i.e., investigate or otherwise pursue) the transaction (Regs. Sec. 1.263(a)-5). When fees paid to service providers are contingent upon the successful closing of a transaction, taxpayers can use a facts-and-circumstances test or a safe harbor to determine what portion of the fees are deemed to “facilitate” that transaction (Rev.

4. Rules for written tax advice finalized  

BY Sally P. Schreiber, J.D.
Circular 230 final regs. make ubiquitous email disclaimer no longer necessary.The IRS issued final regulations under Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10), on the rules for practitioners to provide written tax advice and certain other related provisions, adopting the proposed regulations (REG-138367-06) issued in September 2012 with some modifications.The new rules withdraw the covered opinion rules in Circular 230, Section 10.35, which were widely considered unworkable, and replace them with one standard for written tax advice in Circular 230, Section 10.37.

5. Madoff account value must be determined at trial  

BY Charles J. Reichert, CPA
The IRS is denied summary judgment on an estate’s valuation of its account in an infamous Ponzi scheme.Whether an account managed by Madoff Investments or its claimed holdings are considered property included in a gross estate and whether a willing buyer or seller of the account could reasonably know or foresee before its collapse that the account was part of a Ponzi scheme are disputed material facts that should be determined at trial, the Tax Court held.

6. Supreme Court: Inherited IRAs are not retirement funds   CPEDirect

BY Sally P. Schreiber, J.D.
The decision resolving a circuit split allows an inherited IRA to be included in a bankruptcy estate. The U.S. Supreme Court in Clark v. Rameker held that funds in an inherited individual retirement account (IRA) were not retirement funds that were exempt from a husband-and-wife debtors’ bankruptcy estate.

7. Tax Court foils transferee liability of Reynolds family trusts  

BY Sharon Burnett, CPA, Ph.D. and Darlene Pulliam, CPA, Ph.D.
State law is applied to determine whether a transferee is liable for a transferor’s tax liability.The Tax Court held that four trusts were not required to pay their former personal holding company’s tax liability. Virginia state law does not contain a corollary to the federal substance-over-form doctrine, and federal law has overridden state law only when the underlying transaction was clearly a sham.Facts: In 1961, Davreyn Inc.

8. Know when to hold ’em (and when to report ’em)  

BY Vani Murthy, CPA, M.S. (Tax.)
A district court holds that online gambling and payment accounts managed by foreign companies are subject to FBAR reporting.The U.S. District Court for the Northern District of California held that a taxpayer’s online poker and payment accounts with companies located overseas were subject to reporting on FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).Facts: John Hom, a U.S.

9. Tax software: Ethical, legal, and professional liability risks  

BY Deborah K. Rood, CPA
Software is an essential tool for driving efficiencies and profitability in a CPA firm tax practice. Practitioners select software based on various factors, including price, ease of use, scalability to practice size, technology features, and technical support (see “2014 Tax Software Survey,” page 26). Software users also should be aware of maintenance requirements and risks of use.

10. Expanded OVDP a chance to reduce penalties   CPEDirect

BY Scott Novak, Esq.
The new information-reporting requirements of the Foreign Account Tax Compliance Act (FATCA), P.L. 111-147, took effect on July 1. Among other things, FATCA requires foreign financial institutions (FFIs) to report on their accounts held by U.S. taxpayers. More than 77,000 FFIs signed on and acquired approved status in the initial round of FFI registration (see tinyurl.com/ku29njb for a list).
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