The Court of Federal Claims ruled that a member of a consolidated group is “the same taxpayer” for purposes of interest-netting relief both before and after becoming a member of the consolidated group. The IRS assessed a tax deficiency of $9,953,525 against Magma Power Co. with respect to its tax
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Business tax
Restricted stock awards and taxes: What employees and employers should know
The use of restricted stock awards to compensate employees is growing in popularity in place of the much-maligned stock option. One of the reasons for the shift to restricted stock is the reduced charge against income provided by restricted stock awards as compared to stock option grants. Restricted stock is
Streamlined installment agreement program modified
The IRS Small Business/Self-Employed Division modified the maximum unpaid balance of assessment taxpayers must meet to qualify for its streamlined installment agreement program and extended the time for payment (SBSE 05-0112-013). The aggregate unpaid balance of assessment threshold has doubled, from $25,000 to $50,000. The timeframe for full payment has
Tax filing season resources—Tax year 2011
This is the one-stop shop for all the updates you need to know for this year’s tax filing season. Find resources from the Journal of Accountancy, plus tax return checklists and tax savings tips from the AICPA, categorized by tax topic. INDIVIDUAL TAX Tax season startsJan. 16, 2012Tuesday, Jan. 17,
Statutory definition of specified notional principal contract extended through 2012
The IRS issued temporary and identical proposed regulations on dividend equivalents for purposes of Sec. 871(m) (T.D. 9572; REG-120282-10). The regulations provide guidance to nonresident aliens and foreign corporations that hold notional principal contracts providing for payments determined by reference to payments of dividends from sources within the United States.
IRS issues regs on interest expense allocation and apportionment for partners
The IRS has issued temporary and identical proposed regulations that make four changes to the rules for allocating and apportioning interest expense for partners in partnerships (T.D. 9571; REG-113903-10). The first change is to the method for apportioning interest expense for corporate partners whose interest in the partnership is 10%
Tax season starts
Tuesday, Jan. 17, marks the start of tax season, as the IRS opens up its system to accept e-filed individual tax returns. It will also start accepting returns through its Free File program on Tuesday. Unlike last year, when the start of tax season was delayed for some taxpayers by
IRS gives transitional relief to Form 8937 filers
The IRS announced on Friday that, due to its late release of the required form, it will not impose penalties on issuers of stock who report incorrect 2011 information required under Sec. 6045B, as long as they make a good-faith effort to timely comply with the requirements (Notice 2012-11). The
Form debuts for Jan. 17 stock basis change reporting deadline
The IRS released new Form 8937, Report of Organizational Actions Affecting Basis of Securities, and its instructions. The deadline for filing the form for 2011 is next Tuesday, Jan. 17. Issuers of specified securities must file the form by that deadline to report organizational actions during 2011 that affect those
IRS issues new guidance on W-2 reporting of health plan costs
The IRS released new guidance on the requirement that employers provide information to employees on the cost of employer-provided group health plan coverage (Notice 2012-9). The guidance comes in the form of 39 questions and answers. It supersedes Notice 2011-28 and makes changes to requirements that were issued in Notice
New tax provisions for 2012
With the ringing in of the new year, several new tax provisions took effect. While the list of new items does not compare with the number of tax provisions that expired at the end of 2011 (see “Many Tax Provisions Set to Expire at Year-End”), practitioners should be aware of
IRS audits of small business software files
Tax practitioners have always been cautious with the records they provide to the IRS in an audit to control the depth of an IRS inquiry. But IRS agents are starting to request client backup files from small business accounting software such as QuickBooks and Peachtree, and many practitioners are concerned
The basics of S corporation stock basis
The concept of basis is simple, but calculating basis for S corporation stock takes much of many CPA tax practitioners’ time and energy. Why is this the case? Basis measures the amount that the property’s owner is treated as having invested in the property. At the start of the investment,
Tax relief and health care acts shape 2011 returns
As CPAs gear up for tax season, they’ll find the Form 1040 series for 2011 looking much the same as that of the previous year, but only because of Congress’ 11th-hour compromise late in 2010 to keep it so. Nonetheless, a number of new features affecting individuals and businesses, such
IRS provides planning opportunity for accrued bonuses
A recently issued revenue ruling (Rev. Rul. 2011-29) provides accrual-method employers with a potential planning opportunity to secure a current deduction for accrued bonuses paid within 2½ months of their tax year-end. This opportunity can apply even though the bonus plan includes a contingency, that is, a requirement that the
Many Tax Provisions Set to Expire at Year-End
Congress has reportedly broken its impasse and agreed to extend the payroll tax cut for two months, so the reduced Social Security tax rate will not expire as scheduled at midnight on Dec. 31. While Congress’ negotiations over extending the reduced payroll tax rate have garnered a lot of media
Regulations Issued on Continuity of Interest Rule for Corporate Reorganizations
The IRS issued final and proposed regulations (T.D. 9565 and REG-124627-11) on the continuity of interest (COI) requirement in Sec. 368 corporate reorganizations. To qualify for nonrecognition treatment in a corporate reorganization, one of the requirements that must be met is COI, specifically how that requirement is met in the
Tax Issues and the 2010 S Corporation Shareholder Decedent
Editor’s note: This article originally appeared on thetaxadviser.com. A tax practitioner working with the estate of an S corporation shareholder who died in 2010 must contend with numerous issues. This article points out some of the issues and discusses some of the choices that a practitioner can consider. The
IRS Clarifies Recurring-Item Exception
The IRS issued a revenue ruling on Tuesday to clarify the application of the all-events test’s recurring-item exception under Sec. 461(h)(3) to certain fact patterns (Rev. Rul. 2012-1). The ruling addresses four questions: Is the amount of a taxpayer’s liability material for purposes of the recurring-item exception if the liability
Transit Pass and Vanpool Benefits to Shrink in 2012
Millions of people across the United States will experience a significant increase in the cost of their daily commute to work, and many employers will suffer a corresponding increase in payroll taxes for 2012 and beyond, unless Congress acts. The monthly tax exclusion for employer provided transit pass and vanpool
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