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Reconsideration of estate's penalty abatement yields same result

Upon the government's motion to reconsider, a district court vacated its prior opinion in Estate of Skeba (No. 17-cv-10231 (D.N.J. 10/3/19), superseding memo 1/7/20) but issued a superseding memorandum affirming the previous holding that the taxpayer estate was entitled to abatement of a penalty for filing the estate return late (see "Tax Matters: Estate Is Entitled to Refund of Sec. 6651 Late-Filing Penalty," JofA, Jan. 2020). The court reviewed the estate's reasonable-cause defense de novo rather than, as earlier, under the arbitrary-and-capricious standard.

In-game currency not taxable, IRS clarifies

Online gamers using virtual currencies as part of a video game do not have to report the transactions on a tax return if the currencies do not leave the game environment and thus are not convertible into real currency, the IRS stated on its website in February, clarifying general information on reportable virtual currency transactions. Such a nonconvertible virtual currency, by itself, would not require a taxpayer to answer "yes" to the question on Form 1040, Schedule 1, Additional Income and Adjustments to Income, asking, "[D]id you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?," the IRS stated.

IRS to step up high-income taxpayer visits

The IRS announced in February (IR-2020-34) that revenue officers would begin making more in-person visits to high-income taxpayers — generally, those with income over $100,000 per year — who have failed to timely file one or more tax returns, to try to bring them into compliance. Most such visits will be unannounced, but taxpayers have the right to see two forms of official credentials, a serial number and a photo, the IRS stated. The officers will request payment of outstanding tax debts and can offer a range of payment options. IRS Commissioner Charles Rettig said this initiative uses data analytics to identify nonfilers and that officers will make visits in 43 states ("Don't Overthink Crypto Checkbox, Rettig Says," by Wesley Elmore, Tax Notes Today Federal, Feb. 25, 2020).

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These year-end tax planning strategies address recent tax law changes enacted to help taxpayers deal with the pandemic, such as tax credits for sick leave and family leave and new rules for retirement plan distributions, as well as techniques for putting your clients in the best possible tax position.

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