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November 2009 |  BY DAVID W. RANDOLPH, PH.D. |  Article

Despite the recent downturn in the American housing market, one of the highestvalue assets owned by most taxpayers remains their home. While many taxpayers have seen the value of their home decline, those in locales where home values have remained relatively strong—such as parts of some Southern and Midwestern states—could still realize a gain upon the sale of their home.

November 2009 |  BY JAMES M. HOPKINS, CPA |  Article

One requirement for claiming a qualifying child (QC) for purposes of the dependency exemption deduction is that the child must be related to the taxpayer, that is, the taxpayer’s child (including stepchild or foster child), sibling, halfsibling, stepsibling or descendant of any of them (IRC § 152(c)(2)). However, dependents alternatively may be claimed as qualifying relatives (QRs), who can be unrelated if they live with the taxpayer for the entire year (section 152(d)(2)(H)) and meet other qualifying tests.

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 James M. Hopkins, CPA |  Article

The Fostering Connections to Success and Increasing Adoptions Act of 2008, PL110351, made several changes to the qualifying child (QC) definitions effective for tax years beginning after Dec. 31, 2008. Section 501(a) of the act amended the age requirement (IRC § 152(c)(3)) to also require the QC to be younger than the individual claiming a QC exemption for the child.

November 2009 |  Article

President Barack Obama signed into law the Military Spouses Residency Relief Act (PL 11197), which will ensure that the spouses of military personnel who move because their spouse is posted for military duty will be treated as not having changed residency for tax purposes. Under the act, the fact that a military spouse is present in or absent from a jurisdiction in the United States will not affect that spouse’s residence or domicile for tax purposes, as long as that presence in (or absence from) the jurisdiction is due to the service member’s compliance with

November 2009 |  Article

The IRS on Thursday announced a pilot program aimed at deterring identity theft (Notice 200993). Under the program, filers of certain paper information returns will be allowed to truncate the payee’s Social Security number on the payee statement. The change affects statements for 2009 and 2010. Only paper payee statements for forms in the 1098, 1099 and 5498 series are eligible for the program.

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 Gerard H. Schreiber Jr., CPA |  Article

IRS rules effective Jan. 1, 2009, delineate more strictly tax return preparers’ duties to safeguard taxpayer information from unauthorized disclosure or use. IRC § 7216 imposes criminal penalties on the unauthorized use of taxpayer information. The requirements are closely tailored to the type of information, the party using it, and whether that party is inside or outside the United States.

October 2009 |  BY JUSTIN P. RANSOME, ESQ., CPA, VINU SATCHIT, CPA |  Article

Although many investment assets have lost value in the past year, individuals coming to CPAs for estate planning advice often hold highly appreciated assets, and many want to make significant charitable gifts. For that reason, charitable remainder trusts remain a popular method of reducing assets subject to estate tax.

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.