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November 2009 |  Article

FASB issued Accounting Standards Update (ASU) 200906 to provide additional implementation guidance on accounting for uncertainty in income taxes and to eliminate the disclosures required by FASB Accounting Standards Codification (ASC) Paragraphs 740105015(a) through (b) for nonpublic entities, including passthrough and notforprofit entities. The new guidance involves requirements under what was previously known as FASB Interpretation no.

November 2009 |  BY CHARLES J. REICHERT, CPA |  Article

The Tax Court, whose denial of a sixyear statute of limitations in Bakersfield Energy Partners had been recently upheld by the Ninth Circuit, held in two more cases that an overstatement of basis did not allow the extended assessment period for a substantial omission of gross income under IRC § 6501(e).

November 2009 |  BY MELANIE J. EARLES, CPA, DBA |  Article

The Fifth Circuit held that IRC § 6229(a) sets no deadline by which the IRS must issue an FPAA (final partnership administrative adjustment). Its interpretation of the relationship between the limitations period in sections 6501(a) and 6229(a) mirrors that of the Tax Court, the D.C. Circuit and the Federal Circuit (see RhonePoulenc Surfactants & Specialties LP v.

November 2009 |  BY VINAY S. NAVANI, CPA |  Article

C corporations that elect S status are often subject to the builtin gains (BIG) tax under IRC § 1374. One of the aspects of the BIG tax that can be a trap for the unwary is the treatment of accounts receivable for cashbasis corporations. The fair market value of accounts receivable is usually the face value of the receivables.

November 2009 |  Article

FIRST CIRCUIT DENIES TEXTRON WORK PRODUCT PRIVILEGE In a 32 decision, the First Circuit Court of Appeals overturned its earlier threejudge ruling and a district court to hold that the work product doctrine did not protect from IRS summons the tax accrual workpapers of aviation and industrial conglomerate Textron Inc.

November 2009 |  Article

On Friday, President Obama signed into law a bill that includes changes to the firsttime homebuyer credit, increased NOL carrybacks for small businesses, and mandatory efiling for most tax return preparers. The bill cleared Congress on Thursday. The Senate had unanimously agreed to the bill, the Worker, Homeownership, and Business Assistance Act of 2009 (HR 3548), on Wednesday after adding the handful of tax provisions to the bill’s original provision on unemployment compensation.

October 2009 |  BY ELLEN COOK, CPA, ANNA FOWLER, CPA, PH.D., ANNETTE NELLEN, ESQ., CPA, NORA STAPLETON, CPA, JOSEPH W. WALLOCH, CPA |  Article

Given the breadth and variety of tax relief provisions in the American Recovery and Reinvestment Act (ARRA) of 2009, PL 1115, one or more could affect your clients’ individual returns for the 2009 tax year. Many are intended to provide relief for taxpayers in financial distress, stimulate consumer spending or provide an incentive for more environmentally friendly living.

October 2009 |  BY TINA QUINN, CPA, PH.D., JOHN F. ROBERTSON, ESQ., CPA |  Article

The Court of Federal Claims recently ruled that an interest in a Texas limited liability company (LLC) was not a limited partnership interest held as a limited partner for purposes of the passive loss rules and therefore losses from the interest should not be treated as presumptively passive.

October 2009 |  BY JEAN T. WELLS, CPA, J.D. |  Article

A panel of the U.S. Court of Appeals for the Ninth Circuit held that employee stock option (ESO) costs incurred by one company participating with related companies in a costsharing agreement (CSA) in the late 1990s must be allocated among the research and development (R&D) costs of all the participants under former Treas.

October 2009 |  BY CHARLES J. REICHERT, CPA |  Article

The U.S. Court of Appeals for the Fifth Circuit vacated a district court decision that had disallowed a taxpayer’s research tax credit. The Fifth Circuit held the lower court had not used the proper definitions of “discovering information” and “process of experimentation” when deciding whether the taxpayer had qualified research expenses.