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
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IRS practice & procedure
Final Regulations Issued on Validity, Priority of Federal Tax Liens
On Monday, the IRS published final regulations (TD 9520) that govern the validity and priority of federal tax liens under IRC § 6323. Under IRC § 6321, the federal government has an automatic lien against any person who does not pay federal tax for which they are liable after the
Supreme Court: Medical Residents Not Exempt From FICA
Resolving a circuit split and applying the Chevron standard of greater deference to Treasury regulations, the U.S. Supreme Court upheld the validity of Treasury regulations requiring full-time medical residents and their university employers to pay FICA tax. In doing so, the court announced that tax regulations should generally be accorded
AICPA Calls for Safeguards for Electronic Data Provided for IRS Exams
The AICPA called on the IRS to start a dialogue to fix what it views as an important problem for some small businesses under audit examination: providing electronic records to the IRS while protecting confidential information that is not relevant to the IRS’ request. The IRS maintains that the
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
Unfair Lending Practice Settlement Does Not Result in Income to Borrower
In Chief Counsel advice, the IRS stated that adjustments to loan principal amounts under a settlement to reform unfair lending practices do not result in income to the borrower, even though the adjustments result in a reduction in the amount the borrower will pay under the loan (CCA 201112008). The
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
Uncertain Tax Position FAQs Posted
The IRS has posted a series of questions and answers (FAQs) about the new requirement for large corporations to report their uncertain tax positions. The seven FAQs address both reporting requirements for Schedule UTP, Uncertain Tax Position Statement, and the IRS’ policy of restraint. For the 2010 tax year, corporations
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
IRS Issues Final Regs on Disclosing Return Information to Whistleblowers
On Monday, the IRS released final regulations regarding disclosure of return information by the Treasury Department in connection with written contracts among the IRS, whistleblowers and, if applicable, their legal representatives (TD 9516). The new IRS Whistleblower Office may determine during the course of an investigation that it needs the
Senate Passes Bill Addressing Tax Strategy Patents
The Senate voted 95–5 Tuesday to pass the America Invents Act (S 23), which was formerly called the Patent Reform Act. Included in the bill is a provision intended to stop the granting of patents for tax strategies. That provision, in section 14 of the bill, would deem any “strategy
Pass-Throughs Dominate Tax Reform Conversation
While lawmakers and the Obama administration both support simplifying an Internal Revenue Code described by one witness as “grotesque in its complexity,” lines in the sand are quickly being drawn on how it should be done. These lines were evident in a March 3 House Ways and Means Select Revenues
CPA-Supervised Nonsigning Preparers Exempted From Exam, Continuing Education
The IRS issued guidance on new regulations governing tax return preparers (Notice 2011-6), and provided an exception to its return preparer regulation plan for nonsigning preparers supervised by a CPA, attorney, enrolled agent or other Circular 230 practitioner. The notice also provides an exception for individuals who prepare returns that
Educated Spouse Denied Relief
The Tax Court upheld the IRS position that an educated spouse was unreasonable in believing her ex-husband would pay a tax deficiency, and denied her innocent spouse relief. Elizabeth B. Kelly, who had received a degree in social science, married Sean Kelly in 1981. Sean Kelly worked at Portfolio Analytics,
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
Tax-Exempt Bond Voluntary Closing Agreement Program Announced
On Monday, the IRS announced a program to provide certain issuers that purchase and hold their own tax-exempt bonds relief from debt extinguishment (Announcement 2011-19). In 2008, during the financial crisis, the IRS issued two notices providing relief from liquidity constraints in the tax-exempt bond market. The notices allowed state
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).
FinCEN Amends BSA Regs on FBAR Filings
The Financial Crimes Enforcement Network (FinCEN) on Thursday issued a final rule that amends the regulations under the Bank Secrecy Act (BSA) regarding Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to clarify when an account is foreign and therefore reportable as a foreign financial account
IRS Announces Changes to Lien Process
The IRS has announced a set of new policies designed to help taxpayers pay their back taxes and avoid liens (IR-2011-20). The changes to the IRS’ lien filing practices include: Increasing the dollar threshold above which liens are generally filed. Making lien withdrawals easier after the taxes have been paid.
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
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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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