Line Items


LINE ITEMS

    IRS Cuts Mileage Rate

  • The IRS announced the 1999 optional standard mileage rates in revenue procedure 98-63. If you use your automobile for business purposes this year, you can deduct 31 cents per mile. For charitable use the rate is 14 cents per mile and for medical or moving purposes the rate is 10 cents per mile. The new rate will take effect April 1.

    Domestic Partners Deemed Dependents

  • The IRS recently ruled that same-sex domestic partners are not spouses under the Internal Revenue Code. A tax-exempt fund sought to amend its family health plan to include health coverage for employees same-sex domestic partners. In a private letter ruling, the IRS stated that the partners, although not considered spouses, could be considered dependents. For determining the tax treatment of health benefits, partners are dependents if they receive more than half of their support from the employee; are part of the employees household; and are not in violation of local law by engaging in the relationship (LTR 9850011).

    Mediation: A New Spin on Appeals

  • The IRS has expanded its mediation program. Starting November 16, 1998, and for a two-year test period, taxpayers whose cases involve $1 million or more and are already in the appeals process can request mediation for reasonable compensation, valuation and transfer pricing. The mediator will have no decision-making authority and will be an objective and neutral third party whose role will be to assist the taxpayer and negotiate a settlement. The mediation procedure can be used only when appeals settlement discussions are exhausted. Either party may withdraw from the mediation at any time. Mediation is not available for issues designated by the IRS chief counsel for litigation or docketed in any court (Adv. Ann. 98-99, 1998-46 IRB).

    S Corp Elections Extended

  • A new revenue procedure contains a flowchart that helps practitioners understand the types of relief available for correcting late S corporation elections. The new procedure extends the time generally allowed for late elections from 6 to 12 months (but no later than the unextended due date of the tax return for the first year the corporation intends to be an S corporation). The procedure, which is an alternative to the letter ruling process, does not impose any user fees (Rev. Proc. 98-55, 1998-46 IRB).

Michael Lynch, CPA, Esq., associate professor of tax
accounting at Bryant College, Smithfield, Rhode Island.

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    VIDEO

    Will the Affordable Care Act be repealed?

    The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

    QUIZ

    News quiz: Scam email plagues tax professionals—again

    Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.