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August 2010 |  BY Karen Nakamura, CPA, Jason R. Thompson, Esq., LL.M., Tara Ferris, Esq., LL.M. |  Article

State net operating loss (NOL) rules generally differ from federal NOL rules, and state NOL rules often differ from one another. This is especially true with respect to carrybacks of NOLs—which, unlike for federal returns, the majority of states do not allow—and carryforwards. This lack of consistency can lead to confusion about a taxpayer’s ability to use NOLs.

August 2010 |  BY Alistair M. Nevius |  Article

College students combine many sources of funds to pay for their education, including personal savings, family savings, income from jobs, scholarships andor student loans. As the percentage of funds from the student’s sources increases, parents risk losing the student as a dependent on their tax return. Not only do the parents lose the exemption deduction, but they also lose available higher education tax benefits (Hope scholarship, American opportunity and lifetime learning credits, and tuition deduction).

July 2010 |  Article

The IRS announced that is providing relief for small taxexempt organizations that are supposed to automatically lose their taxexempt status because they failed to file Forms 990EZ or 990N for the years 2007, 2008 and 2009. Under a special onetime program, the IRS is giving those organizations until Oct.

July 2010 |  Article

The U.S. Court of Appeals for the Tenth Circuit has held that a taxpayer’s investment in a “Son of BOSS” tax shelter lacked economic substance and therefore did not generate deductible losses (Sala, No. 081333 (10th Cir. 72310)). This holding reverses a rare taxpayer win on the issue of Son of BOSS tax shelters in which a district court had allowed the taxpayer to deduct losses from the investment (Sala, No.

July 2010 |  Article

TD F 9022.1, Report of Foreign Bank and Financial Accounts (FBAR), must be filed by U.S. persons having a financial interest in or signature authority or other authority over any financial account in a foreign country if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.

July 2010 |  Article

As part of ongoing guidance on this spring’s health reform legislation, the IRS, Department of Labor, and Department of Health and Human Services have issued interim final and proposed regulations implementing the preventive health services rules in the acts (TD 9493 REG12039110). The Patient Protection and Affordable Care Act (PL 111148) and the Health Care and Education Reconciliation Act (PL 111152) amended and added to certain provisions of the Public Health Service Act (PHS Act) relating to group health plans and health insurance issuers in the group and individual markets.

July 2010 |  Article

UNCERTAIN TAX POSITIONS DRAFT SCHEDULE RELEASED The IRS released a draft of new Schedule UTP, Uncertain Tax Position Statement, (tinyurl.com27jmhm7) and instructions (tinyurl.com25uorpf) as part of its initiative to require certain business taxpayers to report uncertain tax positions on their returns (Announcement 201030). (For previous JofA coverage of the initiative, see “Tax Matters,” May 2010, page 73, and April 2010, page 51, and “AICPA Positions on Recent IRS Proposals,” May 2010, page 30).

June 2010 |  Article

The U.S. Supreme Court ruled Monday that a method of hedging against fluctuations in the price of energy or other commodities was an unpatentable abstract idea. The court, however, rejected the idea that a business method could never be patentable. The case, Bilski v. Kappos (08964), has been widely followed because of its possible farreaching implications for businessmethod patents.

June 2010 |  Article

The IRS and Treasury Department issued proposed regulations (TD 9491, REG12039910) Tuesday implementing rules for health care insurance coverage and group health plans under the Patient Protection and Affordable Care Act (PL 111148) and the Health Care and Education Reconciliation Act (PL 111152). The text of the proposed regulations is substantially similar to that of interim final regulations issued simultaneously by the departments of Health and Human Services and Labor.

June 2010 |  Article

The IRS should phase in over the next three years a requirement that tax return preparers filing more than 10 returns do so electronically—a mandate that otherwise will take effect next year, an advisory panel said Friday. The recommendation was among nine by the Electronic Tax Administration Advisory Committee in its annual report to Congress.