Tax Notes

The Treasury Department and the IRS select 102 people to serve in a new group—the Taxpayer Advocacy Panel—which will identify taxpayers’ concerns, along with suggestions for improving customer satisfaction, and convey them to the service ( ). Previously, the body was known as the Citizen Advocacy Panel and had members from 10 states. Those serving on it will work with IRS officials to resolve high-priority issues, primarily relating to the agency’s Wage and Investment and Small Business/Self-Employed divisions. The panel’s members—who include tax attorneys and accountants, professors, retired military personnel, small business owners and one former state legislator—come from all 50 states and the District of Columbia.

As part of its efforts to prevent abusive business transactions, the IRS provides guidance on and reaffirms a determination it made in 1999: A taxpayer may not deduct rent or interest paid or incurred in connection with a lease-in/lease-out (Lilo) transaction. In revenue ruling 2002-69, contained in IRB 2002-44 ( ), the IRS says its position does not rely on the failure of such transactions to have a pretax profit potential or a business purpose. But the service nevertheless may challenge the tax treatment of transactions that do have such characteristics. The IRS says that Lilos confer only a future interest in property, not a current leasehold interest. IRB 1999-13 ( 99-13.pdf) contains the earlier ruling.

The IRS proposes regulations ( ) that would charge a $150 user fee to many taxpayers seeking an agreement, known as an offer in compromise (OIC), with the IRS to resolve their outstanding tax obligations. The fee would cover the cost of processing such requests. Taxpayers would have to submit the fee, if appropriate, with their OIC application. According to the proposed regulations, the IRS would exempt certain taxpayers from the fee, including those whose income falls below the poverty line, as defined by the Department of Health and Human Services, or those requesting an OIC where the only question is whether the assessed tax was correct. Comments are due February 4.

For single-click access to further coverage of the news stories listed here, visit the Journal of Accountancy Web site at .


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.