The final regulations target arrangements that the IRS says improperly use charitable remainder annuity trusts and annuities to eliminate ordinary income and capital gain on the sale of property.
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TOPICS
Tax
Eligible taxpayers to get automatic IRS penalty relief
Under the new system, eligible taxpayers will no longer have to request penalty relief that the IRS says is routinely granted.
IRS adds online option, details for Kwong-related refund claims
Certain taxpayers with IRS online accounts can file a Kwong-related refund claim on Form 843 through a new secure application before a Friday deadline.
Corporation’s officer held personally liable for its taxes under Federal Priority Statute
A corporate officer who facilitated an insolvent company’s transfer of assets to private creditors while knowing of an outstanding federal tax debt was held personally liable for the taxes owed.
District court upholds final microcaptive reporting regulations
The IRS followed a “reasonably discerned path” in setting forth factors triggering designation of a microcaptive insurance arrangement as a listed transaction or transaction of interest, the court found.
Cannabis dispensary denied ERC
The Court of Federal Claims held that Sec. 280E, which prohibits deductions and credits for businesses trafficking in controlled substances, applies to the employee retention credit, including its refundable portion, and denied a cannabis business’s claim for a refundable ERC.
Line items
This column lists recent tax news from the Journal of Accountancy.
IRS seeks examples of incorrect CP53E notices
The request follows reports from taxpayers who said they received notices despite not expecting a refund or having already provided direct deposit information.
IRS offers gift tax safe harbor for contributions to Trump accounts
The guidance sets forth conditions for contributions to qualify for the annual gift tax exclusion and for donors to avoid filing gift tax returns.
IRS outlines AI risks, Circular 230 duties for tax practitioners
The IRS warned that AI’s risks — including fabricated outputs and data privacy concerns — require practitioners to verify results and follow existing Circular 230 rules on diligence, competence, and confidentiality.
Advocate: IRS had strong filing season for online taxpayers, weaker one for others
The national taxpayer advocate’s Fiscal Year 2027 Objectives Report to Congress says the IRS processed about 139 million returns and handled most refunds smoothly but says the story was different for taxpayers who needed help from a human being.
Supreme Court lets stand IRS power to assess tax anytime for preparer fraud
The Supreme Court declined to hear an appeal of the Third Circuit’s decision in Murrin, in which the court held that taxpayer intent is not required for the unlimited period for assessing tax under Sec. 6501(c)(1) to apply.
Advisory panel urges sustained IRS funding, expanded AI, tax simplification
The Electronic Tax Administration Advisory Committee calls for predictable, multiyear funding; expanded use of artificial intelligence with safeguards; and steps to reduce complexity and improve communication with taxpayers and practitioners.
About a quarter of callers to two IRS lines got poor service, TIGTA says
The Treasury Inspector General for Tax Administration estimated that about 1 million callers to two IRS customer service lines did not receive quality service.
TIGTA: IRS reassigned staff after layoffs for filing season
More than 11,000 workers left Taxpayer Services, prompting the IRS to assign 1,173 higher-paid employees to lower-grade positions, the report from the Treasury Inspector General for Tax Administration said.
IRS holds hiring events in 6 cities after staff cuts
During the 10th ENGAGE, AICPA Chair Jan Lewis pointed to new hiring as a step toward improving IRS responsiveness.
AICPA recommends improvements to CP53E notice process
A letter to the IRS cites erroneous notices, late guidance, and practitioner confusion. It also calls for clearer rules and system changes.
IRS to merge tax practitioner offices despite AICPA opposition
The new Tax Professional Management Office will combine the Return Preparer Office and Office of Professional Responsibility functions under one structure, with the IRS saying their missions and oversight roles would remain unchanged.
Tax Court allows cattle ranch deductions
The Tax Court held that a Texas rancher operated with a profit motive, despite “troublingly large” losses more than 77 times his gross receipts from farming and ranching.
Tax Court upholds passport notice certification
The IRS issued a passport notice certification of a “seriously delinquent tax debt” of more than $1.6 million in trust fund recovery penalties.
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