The IRS on Friday suspended any requirement for persons other than U.S. citizens and domestic entities to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), otherwise due on June 30, 2010. The Service also extended until June 30, 2011, the deadline for filing an
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TOPICS / TAX
IRS practice & procedure
Allowed Uses of Taxpayer Info Widened
The IRS in late December issued temporary and proposed regulations under IRC § 7216 clarifying and expanding the ways in which tax return preparers may disclose or use certain tax return information without taxpayer consent (TD 9478 and REG-131028-09). The IRS also issued two revenue rulings approving several scenarios involving
IRS Initiatives Could Change Compliance Landscape in 2010
During the latter part of 2009, the IRS announced a number of new compliance initiatives that, when fully implemented, have the potential to dramatically alter how the IRS deals with certain groups of taxpayers. The programs are important not only in how they will directly affect the targeted taxpayer groups
Request for Audit Reconsideration
IRC § 6404(a) allows the IRS to abate any assessment of tax and applicable interest and/or penalties if the assessment is excessive, erroneously or illegally made, or made after the statute of limitation has expired. If an erroneous assessment has been made and a taxpayer has not paid it, under
Senate Passes Bill to Limit Reportable Transaction Penalties
The Senate passed a bill (S. 2917) Tuesday that would modify the amount of the penalty for failure to report tax shelter transactions under IRC § 6707A. The Small Business Penalty Fairness Act of 2009 passed by unanimous consent. The bill would set the amount of the penalty under section
Appeals Court Upholds Return Preparer’s Conviction in RAL Wire Fraud Case
The Fourth Circuit Court of Appeals upheld the conviction of a Maryland tax return preparer for preparing false tax returns and for wire fraud, where the preparer used interstate wire communications to secure refund anticipation loans (RALs) for his customers based on the false tax returns (U.S. v. Mehta, docket
Obtaining a Power of Attorney Through IRS E-Services
E-services is a suite of Internet-based products that allows tax professionals to conduct client business with the IRS 24 hours a day, 7 days a week. Compared with mailing or faxing a Form 2848, Power of Attorney and Declaration of Representative, the e-services application is a much faster way for
Cross-Border Tax Issues
CFOs can exercise reasonable diligence to ensure that they have procedures in place to deal with some of the more common shortcomings in cross-border tax compliance. The following are some routine tax compliance situations that U. S. companies ($500 million or less in sales) with outbound activities are most likely
Court of Federal Claims Upholds Additional SUI Credit
In an unreported decision, the U.S. Court of Federal Claims held that plaintiffs in 10 consolidated tax refund cases were entitled to an additional state unemployment insurance (SUI) credit against their FUTA tax liabilities for years 1991–1996. Although the case selected as the lead was that of Cencast Services LP,
Line Items
FINAL REGS CLARIFY INSTALLMENT TAX PAYMENTS The IRS issued final regulations governing the payment of tax liabilities in installments (TD 9473). The regulations reflect changes to the Tax Code made by acts going as far back as 1996. IRC § 6159 allows taxpayers who cannot pay their tax liabilities in
IRS Updates Rules on Adequate Disclosure
The IRS has updated its guidance on the rules governing when disclosure of an item or position on a tax return constitutes “adequate disclosure” for purposes of reducing an understatement of income tax or avoiding certain tax return preparer penalties (Revenue Procedure 2010-15). The guidance applies only to the substantial
IRS Plans to Require Disclosure of Uncertain Tax Positions
The IRS announced Tuesday that it is considering making changes to how business taxpayers report uncertain tax positions (Announcement 2010-9). Specifically, the IRS said it is developing a schedule that certain businesses would be required to use to disclose uncertain tax positions on their returns annually. The IRS plans to
Swiss Court Halts Release of Some UBS Account Holder Data
A Swiss court has held that the Swiss bank UBS does not have to hand over to the IRS confidential data on 26 accounts under a settlement agreement between the United States and Switzerland negotiated in August 2009. Under the agreement, UBS is supposed to turn over for investigation information
Taxpayer Advocate Urges Better IRS Service
A report examining problems taxpayers encounter with the IRS found that the Service’s collection practices may harm long-term taxpayer compliance and are not supported by reliable data. The IRS also faces challenges in providing core services such as meeting the demand for telephone assistance, National Taxpayer Advocate Nina Olson said
Credit Card Fees Are OID
The Tax Court held that credit card “interchange” fees received by subsidiaries of credit card issuer Capital One resembled interest that increased or created original issue discount (OID) related to the company’s pool of credit card receivables. As OID, a daily amount was properly included in income over the life
LILO Stands Up to Court Scrutiny
In a rare setback for the IRS in its litigation against lease-in, lease-out (LILO) tax shelters, the Court of Federal Claims held that an arrangement by Consolidated Edison Co. of New York (Con Ed) with an electric utility in the Netherlands should be respected for federal tax purposes because it
IRS Extends Moratorium on Tax Shelter Enforcement
IRS Commissioner Doug Shulman announced in a letter to Sen. Chuck Grassley, R-Iowa, that the IRS is extending until March 1, 2010, a moratorium on collection enforcement of the IRC § 6707A penalty for failure to disclose tax shelters and other reportable transactions. Shulman first announced the moratorium July 6
When a Tax Return Is Not a “Return”
A taxpayer who does not comply with IRC § 6020(a) when filing late tax returns could lose the benefit of a bankruptcy discharge of taxes due on those returns. CPAs must be wary of this 2005 amendment to the Bankruptcy Code (USC Title 11) if a client has a history
Requests for Tax Shelter Opinion Letters Denied
The Tax Court denied a partnership’s motions to compel the IRS to provide tax opinion letters related to all known “Son of BOSS” transactions, along with a list of law or accounting firms that have issued them. The court determined that the information requested by 3K Investments LLC (tax matters
Final Regulations Update Rules on Paying Tax in Installments
The IRS issued final regulations Tuesday governing the payment of tax liabilities in installments (TD 9473). The regulations reflect changes to the law made by various acts going as far back as 1996. IRC § 6159 allows taxpayers who cannot pay their tax liabilities in full an option to enter
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From The Tax Adviser
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