The IRS’s first-time abatement (FTA) penalty waiver, although introduced 12 years ago, remains little known and often unrequested by qualifying taxpayers. It allows a first-time noncompliant taxpayer to request abatement of certain penalties for a single tax period. Individual taxpayers may request an FTA of a failure-to-file or failure-to-pay penalty.
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TOPICS / TAX
Individual income taxation
Highlights of tax research
With tax reform in the news, it is helpful to understand the origins of some popular and long-lived tax incentives, such as the favorable tax treatment of people over 65 and tax incentives that encourage people to save. As the economy takes fitful steps to recover, insight into the efficacy
IRS issues guidance on minimum essential health coverage, shared-responsibility penalty
In anticipation of the full implementation of health care reform next year, on Wednesday the IRS issued two notices. The first notice defines minimum essential coverage under certain government health plans and other coverage designated as minimum essential coverage for purposes of the Sec. 36B premium tax credit (Notice 2013-41).
AICPA recommends changes to net investment income tax
Jeffrey Porter, chair of the AICPA’s Tax Executive Committee, submitted comments to the IRS on behalf of the AICPA on Monday, recommending many changes to the proposed regulations on the new net investment income tax. Starting in 2013, Sec. 1411(a)(1) imposes a tax equal to 3.8% of the lesser of
Potential income tax benefits for families with special needs children
As the number of children diagnosed with autism, Asperger’s syndrome, and other neurological disorders continues to skyrocket, the disruption it causes in the lives of all those concerned is unmistakable—as are the costs of providing care for the special needs child. As reported by the Autism and Developmental Disabilities Monitoring
Image rights create royalty payments
The Tax Court held that fees received by foreign professional golfer Sergio Garcia under an endorsement agreement should be treated as 65% royalty compensation and 35% personal service compensation, based on the facts and circumstances of the agreement. The court also held that Garcia’s U.S. image rights payments were royalties
Taxpayer can contest trust fund penalty where son tossed Letter 1153 into basement
A taxpayer successfully challenged the IRS’s filing of a notice of federal tax lien against him for a trust fund recovery penalty on the basis that he did not have an opportunity to contest the liability on which the assessment underlying the lien was based. The taxpayer argued he had
Supreme Court resolves circuit split on creditability of U.K. tax
In a unanimous decision, the U.S. Supreme Court held that the United Kingdom’s windfall profits tax imposed on newly privatized businesses was creditable against U.S. taxes under Sec. 901 (PPL Corp., No.12-43 (U.S. 5/20/13)). In doing so, the Court reversed the Third Circuit’s decision (665 F.3d 60 (3d Cir. 2011))
IRS gives details of operations on furlough dates
To help taxpayers plan for the upcoming furlough dates on which the IRS will be closed (see “IRS Decides to Shut Down Completely on Furlough Dates”), the IRS issued a news release detailing how the shutdown days, the first of which is May 24, will affect operations (IR-2013-51). The other
Final regulations permanently extend period to receive disclosure authorization
The IRS on Monday issued final regulations extending from 60 days to 120 days the permitted period for submission of taxpayer authorizations allowing disclosure of returns and return information to third-party designees (T.D. 9618). The regulations, which were adopted without change from the proposed rule issued in March 2011 (REG-153338-09),
Tokyo, Hong Kong again top IRS high-cost housing list
Tokyo and Hong Kong have the highest allowable housing costs for 2013 for purposes of the foreign housing exclusion under Sec. 911(c). The limitation for Tokyo is $320.82 per day, or $117,100 for the entire year. For Hong Kong, it is $313.15 a day, or $114,300 for the year. The
HSA inflation adjustments issued for 2014
On Thursday, the IRS issued the inflation-adjusted figures for the annual contribution limitation for health savings accounts (HSAs) and the minimum deductible amounts and maximum out-of-pocket expense amounts for high-deductible health plans for calendar year 2014 (Rev. Proc. 2013-25). Under Sec. 223, individuals who participate in a health plan with
Proposed rules address minimum value of health coverage for premium tax credits
The IRS issued proposed regulations for determining whether an eligible employer-sponsored health plan provides minimum value for purposes of the Sec. 36B health insurance premium tax credit (REG-125398-12). Individuals do not receive the credit if they are eligible for affordable coverage under an eligible employer-sponsored plan that provides minimum value.
TIGTA: Noncash charitable contribution claims still often erroneous
The Treasury Inspector General for Tax Administration (TIGTA) estimated that more than 273,000 taxpayers claimed $3.8 billion in potentially erroneous noncash charitable contribution deductions in tax year 2010. The audit report’s findings (Rep’t No. 2013-40-009) echoed TIGTA’s previous examinations of noncompliance in 2007 and 2009. In the latest review, released
A conversation about tax reform
Sponsored by Drake Software As Congress took steps earlier this year to enact the first major tax reform since 1986, the JofA turned to three leaders in tax policy for their thoughts on the directions, goals, and prospects for reform. Two of them participated as tax counsel staff to congressional
When is a casualty “sudden, unexpected, or unusual”?
The Second Circuit’s recent remand of Alphonso, No. 11-2364-ag (2d Cir. 2/6/13), rev’g 136 T.C. 247 (2011) (see “Tax Matters: Co-op Lessee Has Property Interest in Collapsed Wall,” on page 73), allows the Tax Court to consider perhaps the most controversial aspect of casualty loss deductions—the meaning of “sudden, unexpected,
AICPA makes tax reform recommendations to Ways and Means Committee working groups
In response to concerns that “[t]he proliferation of new income tax provisions since the 1986 tax reform effort has led to complex compliance hurdles for taxpayers, administrative complexity and enforcement challenges for the Internal Revenue Service,” the AICPA submitted recommendations for tax reform to five of the 11 working groups
Widow avoids jail time and probation in sentencing for offshore account tax evasion
Wealthy Palm Beach resident Mary Estelle Curran was sentenced to one year of probation in federal district court Thursday, following her guilty plea to charges of tax evasion. However, Judge Kenneth Ryskamp almost immediately revoked that sentence, reportedly telling the prosecutors that he thought the prosecution had been unnecessary and
Boston-area residents get more time to file returns and pay tax
In response to Monday’s bombings at the Boston Marathon, the IRS announced late Tuesday that it is extending the time for filing certain individual tax returns that were due April 15 and paying any tax due until July 15. “Our hearts go out to the people affected by this tragic
Witnesses tell Senate Finance Committee ways to improve tax system
Witnesses gave the Senate Finance Committee a variety of suggestions on how to fight tax identity theft and fraud, reform the tax system, and fund the IRS during a hearing on Tuesday. The committee heard from witnesses representing the IRS, the Taxpayer Advocate Service, the Social Security Administration (SSA), and
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SPONSORED REPORT
Preparing clients for new provisions next tax season
As the 2025 filing season approaches, H.R. 1 introduces significant tax reforms that CPAs must be prepared to navigate. These legislative changes represent some of the most comprehensive tax updates in recent years, affecting both individual and corporate taxpayers. This report provides in-depth analysis and guidance on H.R. 1.
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Current developments in taxation of individuals: Part 2
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Current developments in taxation of individuals: Part 1
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