In a fact sheet (FS-2011-13) released Friday, the IRS reminded U.S. citizens and dual citizens of the United States and foreign countries who live abroad about U.S. filing requirements, including Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). Some dual-citizen taxpayers may have only recently learned
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TOPICS / TAX
Individual income taxation
Standard Mileage Rates for 2012 Released
The IRS on Friday released standard mileage rates for use in 2012 (Notice 2012-1). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile. For business use of an automobile remains at 55½ cents per mile. For medical or moving expenses, it is
Line Items
HIGH COURT TO HEAR BASIS ISSUE SPLITTING CIRCUITS The U.S. Supreme Court granted certiorari Sept. 27 in U.S. v. Home Concrete & Supply LLC, one of several cases in which the IRS has claimed that a six-year extended statute of limitation applies when an understatement of gross income arises from
IRS Issues Guidance on Fingerprinting, Other Registered Tax Return Preparer Details
The IRS provided more details on Sept. 21 of its still-developing requirements for all paid tax return preparers to be registered and undergo a background check, to include fingerprinting. The IRS said CPAs are exempt from fingerprinting at this time. It also said it will not require individuals to be
Offers in Compromise and Dissipated Assets
Under IRC Sec. 7122(a), taxpayers may request an offer in compromise (OIC) with the IRS to settle outstanding tax liabilities for less than the full amount owed. To qualify, taxpayers must prove that their outstanding tax liabilities exceed the amount of income and assets available to satisfy those liabilities during
Advising Clients in Same-Sex Relationships
Even as the debate over legally recognizing same-sex relationships continues, many such unions are being created in which income, expenses, assets and liabilities are shared, but generally without legal recognition of property and other rights accorded heterosexual marriages, federally and in most states. These unions create unique challenges and opportunities
Health Care Premium Credit Rules Proposed
The IRS released proposed regulations in August (REG-131491-10) implementing the health insurance premium tax credit, which was enacted last year by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act and is effective starting in 2014. The proposed regulations were part of a “next
Fifth Circuit Upholds Qualified Disclaimer
In an unpublished opinion, the Fifth Circuit Court of Appeals held that a disclaimer by a legatee did not result in a lapsed bequest under Mississippi state law that would have resulted in taxable gifts of property passing to the legatee’s heirs. The circuit court thus reversed and remanded a
Inflation Adjustments Made to Many Tax Items for 2012
The IRS released on Thursday its annual revenue procedure making inflation adjustments to the income tax tables and many tax credits and other items for tax years beginning in 2012 (Rev. Proc. 2011-52). Separately on Thursday, the IRS announced the 2012 contribution limits and other figures for pension plans and
Trade Bills Pass Congress With Tax Provisions
A tax preparer penalty relating to the earned income tax credit (EITC) will increase to $500, and the IRS will receive detailed information about federal and state prison inmates, both measures in a trio of foreign trade agreements Congress passed Wednesday. The trade deals with South Korea, Colombia and Panama
IRS Proposes Stiffer Preparer Requirements for EITCs
The IRS issued proposed regulations Thursday (REG-140280-09) that would impose new requirements for tax return preparers and their firms for returns claiming the earned income tax credit (EITC), including submission of information regarding taxpayers’ eligibility to the IRS. The EITC provides a refundable credit to eligible taxpayers, and it has
2011 Tax Research Service Survey
CPA tax preparers’ attitudes toward their tax research services in some respects reflect a universal quandary of the Information Age: They’re pleased to have so much material at their fingertips, but despite modern aids such as keyword searching, are still often frustrated in tracking down a particular desired bit of
Medical Deduction Allowed for In-Home Personal Care
The Tax Court held that payments made to an elderly woman’s providers of personal care that she required due to her diminished capacity qualified as long-term-care services and were therefore deductible under IRC § 213(d)(1)(C). Lillian Baral was diagnosed with dementia by her physician in 2004. After she was hospitalized
Roth Restructure “Too Good to Be True”
The Tax Court held on July 5 that the IRS properly assessed excise tax on a taxpayer’s excess contribution to a Roth IRA, since the attempted tax-free conversion of a regular IRA to a Roth IRA lacked economic substance. In addition, the court held that the taxpayer was subject to
SE Tax and Sporadic Activity
A common issue for taxpayers and their CPA return preparers is whether an activity for which the taxpayer received compensation during the tax year constitutes self-employment for purposes of self-employment tax. The answer can make a big difference in tax liability, since self-employment tax amounts to 15.3% of net self-employment
IRS Relents on Two-Year Limit on Innocent Spouse Equitable Relief
After winning appeals in three federal circuit courts of its two-year limit for requesting equitable innocent spouse relief, the IRS said on July 25 it will no longer observe that deadline. In Notice 2011-70, the IRS said it will now consider taxpayer requests for equitable relief from joint and several
Final Regulations Simplify Reduced Research Credit Election
The IRS released final regulations (TD 9539) further simplifying an election method by which taxpayers may use a standard rate to reduce a research credit under IRC § 41 in lieu of reducing their research expense deductions. The final regulations also clarify how members of a controlled group may make
IRS Updates, Clarifies Travel Allowances, Reinstates High-Low Method
The IRS issued an update and new guidance Friday (Revenue Procedure 2011-47) for use of a federal per diem rate to substantiate the amount of ordinary and necessary expenses for lodging, meals and incidental costs paid or incurred for business-related travel away from home. The IRS stated that this revenue
IRS Issues Guidance on Fingerprinting, Other Registered Tax Return Preparer Details
The IRS provided more details Wednesday of its still-developing requirements for all paid tax return preparers to be registered and undergo a background check, to include fingerprinting. The IRS said CPAs are exempt from fingerprinting “at this time.” It also said it will not require individuals to be fingerprinted prior
2010 Estate Tax Payment, Carryover Basis Election Extended
Executors of estates of most decedents who died in 2010 now can get an automatic extension until March 19, 2012, to pay any estate tax due as well as to file an estate tax return, the IRS announced Tuesday. The announcement, in Notice 2011-76 and News Release IR-2011-91, also postpones
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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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