The IRS on Wednesday filed a Notice of Appeal to the United States Court of Appeals for the District of Columbia Circuit of the Jan. 18 district court decision that struck down the IRS’s registered tax return preparer program and enjoined it from enforcing the regulations (Loving, No. 1:12-cv-00385-JEB (D.D.C)
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IRS practice & procedure
U.S. and Switzerland sign FATCA agreement
The Treasury Department announced on Thursday that the United States and Switzerland have signed a bilateral agreement to implement provisions of the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted by Congress in 2010 as part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147. It
IRS issues annual whistleblower report to Congress
On Wednesday, the IRS issued its annual report on the whistleblower program, reporting the program’s results for the 2012 fiscal year (FY) and legislative and administrative recommendations for improving the program. Under Sec. 7623(b), which was amended in 2006, the IRS is required to pay awards of specified percentages of
IRS postpones effective date of new procedures for consents to disclose
Rev. Proc. 2013-19, issued Wednesday, delays the date that taxpayer consents to disclose and consents to use tax return information must contain the mandatory language recently issued in Rev. Proc. 2013-14. The original effective date of Jan. 14, 2013, has been moved back to Jan. 1, 2014. Taxpayer consents to
Grouping passive activities
One technique for converting otherwise passive activities to nonpassive is grouping them and treating them collectively as a single activity, thereby combining the participation hours and improving a taxpayer’s ability to achieve the necessary hours for material participation. Regs. Sec. 1.469-4 provides general rules and limitations for grouping activities and
Changes to rules on failure to file gain recognition agreements proposed
The IRS has issued proposed regulations to update the rules that apply to U.S. taxpayers that fail to file gain recognition agreements (GRAs) when they transfer certain property to foreign corporations in nonrecognition transactions (REG-140649-11). The proposed rules would change the standards under which transferors are required to recognize gain
IRS files motion to suspend injunction in return preparer regulation case
The IRS on Wednesday filed a motion in federal court to suspend an injunction that forbids it from continuing with its registered tax return preparer program, pending appeal of the case (Motion to Suspend Injunction Pending Appeal, D.D.C. 1/23/13). The IRS also indicated that it intends to file a Notice of
Updated forms, procedures issued for plan sponsors in IRS’s Voluntary Correction Program
On Thursday, the IRS announced that it was issuing updated procedures and forms for sponsors of retirement plans that intended to qualify under Secs. 401(a), 403(a), 403(b), 408(k), or 408(p), but that have not met these requirements for a period of time. The procedures govern the Employee Plans Compliance Resolution
Sec. 6038D reporting of specified foreign financial assets postponed for one year
The IRS on Wednesday announced that it is postponing for at least one year the requirement that domestic entities report interests in specified foreign financial assets. In Notice 2013-10, the IRS says that when it issues final regulations, they will apply no earlier than to tax years beginning after Dec.
Federal court strikes down IRS tax return preparer registration program
The United States District Court for the District of Columbia on Friday struck down the IRS’s registered tax return preparer program and enjoined it from enforcing the regulations (Loving, No. 12-385 (D.D.C. 1/18/13)). Background The IRS in 2011 began regulating all tax return preparers who prepare and file tax returns
FATCA final regulations cover all the bases
On Thursday, the IRS issued final regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities (T.D. 9610). Under the Foreign Account Tax Compliance Act of 2009 (FATCA), enacted as part of the Hiring Incentives to Restore Employment
FATCA: A new era of financial transparency
Since 2008, the U.S. government has been aggressively moving against U.S. taxpayers who have undeclared foreign accounts. Through a variety of mechanisms, the government has obtained information about U.S. account holders and their assets from jurisdictions previously thought nearly impenetrable. These recent developments portend the eventual erosion of traditional concepts of
Improving the audit selection process
The Treasury Inspector General for Tax Administration (TIGTA) recently released two reports for its study of the IRS Small Business/Self-Employed (SB/SE) Division’s audits of partnerships and S corporations. The findings in both reports are similar: Although the SB/SE audits recommended substantial adjustments, roughly 33% of all the audits in fiscal
Covered opinion rules withdrawn
Finding that the rules it implemented in 2004 regarding covered opinions were not justified by the additional costs of practitioner compliance, on Sept. 14 the IRS proposed revoking them and substituting a single, basic new standard governing all written tax advice (REG-138367-06). Under current Circular 230, Regulations Governing Practice Before
Whistleblower’s claim not entitled to Tax Court review
In a case of first impression, the Tax Court held that it could not order the IRS to reopen an individual’s whistleblower claim under Sec. 7623(b), and the court dismissed his petition. Sec. 7623(b) authorizes an award to a whistleblower if the IRS proceeds with any administrative or judicial action based
Avoiding allegations of improper tax advice
On the golf course, an older client mentions that he has pledged an endowment to his alma mater. Knowing the client does not need his IRA funds for retirement purposes, the CPA mentions that certain taxpayers can make distributions directly from their IRAs without the distribution being included in taxable
Mandatory language for consents to disclose, use taxpayer information modified
In Rev. Proc. 2013-14, the IRS has provided guidance to tax return preparers about the format and content of taxpayer consents to disclose and consents to use tax return information and modified the mandatory language required on each taxpayer consent. The guidance applies to individuals filing a return in the
Rules on use, disclosure of taxpayer information finalized
The IRS on Wednesday issued final regulations under Sec. 7216 that govern the circumstances in which tax return preparers can disclose or use certain limited tax return information (T.D. 9608). The regulations finalize with minor changes rules that were issued in 2010 as temporary and proposed regulations (T.D. 9478 and
Voluntary Classification Settlement Program expanded, liberalized
On Tuesday, the IRS made significant changes to its Voluntary Classification Settlement Program (VCSP). In Announcement 2012-46, in effect until June 30, 2013, the IRS is temporarily permitting employers who have not filed Forms 1099 for their workers to participate in the program by paying a larger amount of past
Proposed regs. provide rules for whistleblower awards
The IRS issued proposed regulations for whistleblower awards under Secs. 7623(a) and (b), as well as rules governing the disclosure of return information under Sec. 6103(h) to pursue these claims (REG-141066-09). The proposed regulations provide general rules for submitting information to the IRS, definitions of key terms, rules for administrative
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