Annette Nellen, chair of the AICPA Individual Income Taxation Technical Resource Panel, pleased some members of Congress when she repeated the AICPA’s support for repeal of the alternative minimum tax (AMT) in testimony before the House Ways and Means Committee on April 13. “That’s music to my ears,” veteran congressman
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TOPICS / TAX
Individual income taxation
Discharge of Indebtedness Rules Clarified for Grantor Trusts and Disregarded Entities
On Tuesday, the IRS issued proposed regulations (REG-154159-09) that provide rules regarding who is the “taxpayer” for purposes of applying the IRC § 108 discharge of indebtedness rules to a grantor trust or disregarded entity. IRC §§ 108(a)(1)(A) and (B) exclude discharged debt from a taxpayer’s income if the discharge
Federal Budget Deal Avoids Tax Season Disruptions
White House and congressional negotiators reached an agreement on funding the federal government ahead of a midnight Friday deadline and averted a shutdown of all nonessential government functions. Under the agreement, the federal government will be funded by a continuing resolution through next Friday. By Friday, Congress plans to pass
IRS Prepared to Process Returns If Government Shuts Down
IRS Commissioner Doug Shulman addressed the National Press Club on Wednesday, and after his prepared remarks he answered questions regarding the IRS’ preparations for a possible shutdown of the federal government, which could happen Friday. The first question asked what people can expect if the government shuts down. Shulman said
Senate Approves 1099 Repeal, Sends Bill to President
The Senate on Tuesday passed legislation to repeal both the expanded Form 1099 information-reporting requirements mandated by last year’s health care legislation and also new 1099 reporting requirements imposed on taxpayers who receive rental income. The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR
Second Home Eligible for Parsonage Exclusion
The Tax Court held that a parsonage allowance paid to an ordained minister used to pay the housing expenses of a second home could be excluded from income, saying the phrase “a home” used in IRC § 107 should be interpreted as any home, not just one. Section 107 allows
Tax Relief for Homeowners With Corrosive Drywall
Some homeowners who have built or purchased new homes in recent years are experiencing the destructive effects of sulfur emissions from so-called corrosive gypsum plasterboard, or drywall. This drywall was manufactured in China in response to the mini-construction boom after the destruction from Gulf Coast hurricanes in the mid-2000s. Most
Taxpayer Assistance Order Regulations Issued
On Thursday, the IRS issued final regulations governing national taxpayer advocate (NTA) taxpayer assistance orders when a taxpayer is suffering hardship because of the way the IRS is administering the tax laws (TD 9519). Under IRC § 7811 the NTA can issue a taxpayer assistance order if the NTA “determines
IRS Issues Final Regs and Guidance on Mandatory E-Filing Requirements
The IRS issued final regulations (TD 9518) and several pieces of guidance relating to the requirement that return preparers e-file tax returns, starting this year. The final regulations adopt, with minor amendments, proposed regulations (REG-100194-10) that were published last December, and they require specified tax return preparers to e-file if
Free File Program Expanded to Include Returns Filed From Overseas
The IRS on Friday announced that taxpayers who live in foreign countries can now use the Free File program to prepare and e-file their federal tax returns (IR-2011-30). The program is available to both U.S. citizens and resident aliens, and currently five of the Free File software providers can accept
Tax Filing Season Resources—Tax Year 2010
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 Free File Program Expanded to Include Returns Filed
First-Time Homebuyer Credit Recapture Causing IRS Processing Problems
On Wednesday, the IRS announced that it is having problems processing tax returns that involve repayment of the IRC § 36 first-time homebuyer credit for 2008 home purchases. The IRS stated that it has assigned additional staff and resources to the issue to resolve it promptly. One group of affected
IRS Proposes Permanently Extending Period for Receiving Authorization to Disclose Return Information
The IRS on Thursday issued a proposed regulation that would permanently extend 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 (REG-153338-09). IRC § 6103(c) authorizes the IRS to disclose a taxpayer’s returns or return
2011 Automobile Depreciation Limits Released
The IRS on Tuesday issued the 2011 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under IRC § 280F (Revenue Procedure 2011-21). This year, the IRS has provided the limitation amounts for vehicles placed in service in 2011 for which bonus depreciation under IRC §
Line Items
DEFYING COURTS, IRS FINALIZES BASIS OVERSTATEMENT RULES The IRS released final regulations defining an omission from gross income for purposes of the extended six-year limitations period for assessment of tax (TD 9511). The regulations finalize without change temporary regulations (TD 9466) that the Tax Court held to be invalid last
When Is a Supplemental Claim a New Claim?
For taxpayers, timeliness is crucial for certain acts, such as filing a refund claim with the IRS within the statute of limitation period. A refund claim must set forth in detail each ground upon which a credit or a refund is claimed and include facts sufficient to apprise the IRS
IRS Lists Countries With Adverse Conditions for IRC § 911 Purposes in 2010
The IRS has waived the eligibility requirements under IRC § 911(d)(1) for certain taxpayers who did not meet the requirements because of adverse conditions in the foreign country in which they lived (Revenue Procedure 2011-20). The affected countries for 2010 are Haiti and Côte d’Ivoire (also known as Ivory Coast).
House Committee Sends 1099 Repeal to the Floor; Senate Passes Its Own Version of Repeal
The House Ways and Means Committee approved a bill Thursday that would repeal the expanded Form 1099 reporting requirements, voting 21–15 to send the measure to the full House of Representatives. Late on Thursday, the Senate passed the FAA Air Transportation Modernization and Safety Improvement Act (S 223) by a
IRS Starts Accepting Delayed Returns
The IRS on Tuesday announced that it has started accepting returns that it could not accept before because it was updating forms and reprogramming its systems (IR-2011-16). In December, the IRS informed taxpayers that because of the Dec. 17 enactment date of the Tax Relief, Unemployment Insurance Reauthorization, and Job
President Proposes 3-Year AMT Patch, Partial Relief on 1099s, Crackdown on Misclassification
President Barack Obama released his proposed budget for fiscal 2012 that would make several tax credits permanent, including the research and experimentation credit, and provide three more years of AMT relief, but would repeal or limit several other tax breaks. The budget would also set aside $240 million for initiatives
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