On Wednesday, the IRS issued interim guidance on issues relating to the basis of stock subject to broker reporting (Notice 2011-56). The guidance responds to stakeholder comments received in response to final regulations on the topic issued last year (TD 9504). The IRS says it plans to issue proposed regulations
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TOPICS / TAX
IRS practice & procedure
IRS Suspends Foreign Asset, Passive Foreign Investment Company Information Reporting Rules
The IRS announced on Tuesday that it is suspending the information reporting requirements for certain individuals with foreign assets and shareholders of passive foreign investment companies (PFICs) under IRC §§ 6038D and 1298(f) (Notice 2011-55). The requirement will be suspended until the IRS releases Form 8938, Statement of Specified Foreign
FinCEN Grants Another FBAR Extension for Some Individuals
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Friday released Notice 2011-2, which gives another small subset of individuals with only signature authority over certain foreign financial accounts who are required to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), with respect to those
IRS Further Extends Deadline for Certain 2009 and Earlier FBARs
The IRS has further extended the deadline for certain persons to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for 2009 and earlier years (IRS Notice 2011-54). The new filing deadline is Nov. 1, 2011. The extension applies to persons with signature authority over a
Fourth Circuit Upholds Two-Year Innocent Spouse Limitation Period
The United States Fourth Circuit Court of Appeals overturned a Tax Court decision and upheld a Treasury regulation that sets a two-year statute of limitation on claims for innocent spouse relief (Jones v. Commissioner, docket no. 10-1985 (4th Cir. 6/13/11)). This marks the third time the Tax Court has been
IRS Finalizes Alternative Simplified R&D Credit Rules
On Friday, the IRS issued final regulations governing the election and calculation of the alternative simplified research and development credit under IRC § 41(c)(5) (TD 9528). The new rules are effective for tax years ending after June 9, 2011. The final regulations extend the election procedures for the alternative incremental
FinCEN Clarifies Parties Entitled to FBAR Filing Extension
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a revised notice Monday that clarified that a small subset of individuals are entitled to a one-year extension of the June 30, 2011, filing deadline to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). The notice
Regulators Extend FBAR Filing Deadline for Certain Financial Professionals
The IRS and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced Tuesday that a small group of individuals required to file the Report of Foreign Bank and Financial Accounts (FBARs) will receive a one-year extension beyond the upcoming filing date of June 30, 2011. FinCEN issued Notice 2011-1 that
IRS Announces “Good Faith” Extension of Voluntary Disclosure Deadline
The IRS said on Thursday that it is making available to taxpayers a 90-day deadline extension to participate in the 2011 offshore voluntary disclosure initiative (OVDI). The extension would be available to taxpayers who have made a good faith attempt to fully comply by Aug. 31, but are unable to
Schedule UTP Answers Posted
The IRS posted a series of questions and answers 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 filing Form
Co-ops and Casualties
The Tax Court held that a resident of a coop apartment complex could not claim a casualty loss deduction for an assessment to repair a common area in which she held no property interest beyond a right to use it. Christina Alphonso owned stock in Castle Village Owners Corp., a
Highway Repairs Are Domestic Production Property
The Tax Court held that a taxpayer’s receipts from highway construction projects were domestic production gross receipts (DPGR) permitting the taxpayer to claim a domestic production activities deduction. The court held that the taxpayer’s work substantially renovated real property, since it materially increased the property’s value, substantially prolonged its useful
Preparer E-File Regs Finalized
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 changes, proposed regulations (REG-100194-10) that were published last December, and they require specified tax return preparers to e-file if
Strategies for Compromising Tax Debts
Representing financially distressed individuals is becoming increasingly common with the economic difficulties many individuals and businesses have experienced in recent years. While tax practitioners know that a taxpayer can make an offer in compromise, some of the options available in making an offer are not well-known. This article addresses three
1099 Provisions Repealed
Congress repealed a widely criticized expansion of Form 1099 information reporting that would have applied to most payments by businesses and a similar requirement for recipients of real estate rental income. The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 4) passed the Senate
IRS Wins Historic Credit Fund Appeal
The Fourth Circuit Court of Appeals ruled against the taxpayers in Virginia Historic Tax Credit Fund 2001 LLP v. Commissioner (docket no. 10-1333), reversing the Tax Court. As noted in Tax Matters coverage (April 2011, page 52) of the Tax Court’s holding in Historic Boardwalk Hall LLC v. Commissioner, 136
Tax Court Gives Some Petitioners Extra Time to File Motions to Vacate
During the transition to its new eAccess electronic document management system, the Tax Court failed to serve a small number of petitioners with paper or electronic notices of the documents concluding their cases (such as final decisions or orders of dismissal). The Tax Court has notified petitioners in those cases,
Tax Court Rejects Taxpayer’s Argument That Denial of Accounting Method Change Was Arbitrary
The Tax Court held that the IRS’ rejection of a taxpayer’s accounting method change request was not the result of an “automatic rejection policy” and that the IRS acted within its proper discretion in denying the request (Lattice Semiconductor Corp. v. Commissioner, TC Memo 2011-100). The taxpayer produced electronic components
IRS Responds to AICPA Accounting Software Examination Letter
In a March 29 letter from Patricia Thompson, chair of the AICPA’s Tax Executive Committee, to Chris Wagner, commissioner of the IRS’ Small Business/Self-Employed Division, the AICPA communicated its concerns regarding the Service’s program to request the accounting software files of certain small business taxpayers under examination; the letter cites
FinCEN Amends BSA Regs on FBAR Filings
The Financial Crimes Enforcement Network (FinCEN) issued a final rule (tinyurl.com/4tevafd) 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 and
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