The Tax Court has amended its procedural rules, effective Jan. 1, 2010, to allow electronic filing of documents submitted to the court (Tax Court Rule 26). The court set up a pilot electronic filing program in 2005. In 2008, the court added an electronic document access system to its Web
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TOPICS / TAX
IRS practice & procedure
UBS Targets Come Into Focus
The IRS has released the selection criteria for identifying holders ofaccounts with Swiss bank UBS under a U.S. settlement agreement with the Swiss government negotiated in August. Under the agreement, UBS will turn over information concerning approximately 4,450 accounts for investigation. IRS Commissioner Doug Shulman also recently announced that about
Court Negates Tax Planning Transaction
A district court held that a partnership’s reported capital loss stemming from nonperforming loans lacked economic substance and denied the claimed tax benefits. D. Andrew Beal owned a bank that was in the business of acquiring nonproducing loans (NPLs) at extreme discounts. With an associate and China Cinda Asset Management
Final Regs Issued on E-Postcards
The Pension Protection Act of 2006 introduced a new notification requirement for small tax-exempt organizations that are not required to file an annual information return under IRC § 6033(a)(1). In July, the IRS released final regulations spelling out what small tax-exempt organizations must do to meet this requirement. Practitioners should
Line Items
FIRST CIRCUIT DENIES TEXTRON WORK PRODUCT PRIVILEGE In a 3-2 decision, the First Circuit Court of Appeals overturned its earlier three-judge ruling and a district court to hold that the work product doctrine did not protect from IRS summons the tax accrual workpapers of aviation and industrial conglomerate Textron Inc.
Qualifying Child Definition Amended
The Fostering Connections to Success and Increasing Adoptions Act of 2008, PL110-351, made several changes to the qualifying child (QC) definitions effective for tax years beginning after Dec. 31, 2008. Section 501(a) of the act amended the age requirement (IRC § 152(c)(3)) to also require the QC to be younger
Salaries a BIG Offset
C corporations that elect S status are often subject to the built-in gains (BIG) tax under IRC § 1374. One of the aspects of the BIG tax that can be a trap for the unwary is the treatment of accounts receivable for cash-basis corporations. The fair market value of accounts
IRS Not Limited to Three Years for FPAA
The Fifth Circuit held that IRC § 6229(a) sets no deadline by which the IRS must issue an FPAA (final partnership administrative adjustment). Its interpretation of the relationship between the limitations period in sections 6501(a) and 6229(a) mirrors that of the Tax Court, the D.C. Circuit and the Federal Circuit
Unrelated Child as a Qualifying Relative
One requirement for claiming a qualifying child (QC) for purposes of the dependency exemption deduction is that the child must be related to the taxpayer, that is, the taxpayer’s child (including stepchild or foster child), sibling, half-sibling, step-sibling or descendant of any of them (IRC § 152(c)(2)). However, dependents alternatively
Final Regulations Issued on S Corporation COD Income Exclusion and Tax Attributes
The IRS and Treasury Department issued final regulations (TD 9469) this week governing how an S corporation reduces its tax attributes under IRC § 108(b) when the S corporation has discharge of indebtedness (COD) income that is excluded from gross income under section 108(a). The regulations address situations in which
Government Loses LILO Case
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 Consolidated Edison Co. of New York (Con Ed) had with an electric utility in the Netherlands should be respected for federal tax purposes because it
Coalition Urges Congress to Ban Tax Strategy Patents
A coalition of various organizations, including the AICPA, has written to members of Congress to ask for a ban on the patenting of tax strategies. The letter says tax strategy patents “pose a significant threat to taxpayers and their advisers,” and urges Congress to prohibit them. In the past few
Losses From Interests in LLCs and LLPs Not Presumptively Passive
The Court of Federal Claims recently ruled that an interest in a Texas limited liability company (LLC) was not a limited partnership interest held as a limited partner for purposes of the passive loss rules and therefore losses from the interest should not be treated as presumptively passive. The Tax
Disclosure Consent Under § 7216
IRS rules effective Jan. 1, 2009, delineate more strictly tax return preparers’ duties to safeguard taxpayer information from unauthorized disclosure or use. IRC § 7216 imposes criminal penalties on the unauthorized use of taxpayer information. The requirements are closely tailored to the type of information, the party using it, and
Offshore Account Voluntary Disclosure Deadline Extended to Oct. 15
The IRS today extended the deadline for voluntary disclosures by taxpayers with unreported income from hidden offshore accounts from this Wednesday, Sept. 23, to Oct. 15. The IRS cautioned that there would be no further extensions. The IRS said that tax practitioners had requested an extension because some are having
IRS Expands, Updates Appeals Mediation Process
The IRS on Friday expanded the number of cases that are eligible to go through mediation in Appeals and updated the mediation procedures (Revenue Procedure 2009-44). The IRS’ Appeals mediation program was authorized in 1998. The IRS Appeals function is designed to resolve tax controversies without litigation. The mediation program
Ninth, Federal Circuits: Basis Overstatement Not Income Omission
An overstatement of basis does not constitute a substantial omission of gross income that would extend the deficiency statute of limitations to six years, the Ninth Circuit Court of Appeals ruled, upholding the Tax Court. The decision in Bakersfield Energy Partners v. Commissioner puts the Ninth Circuit in line with
No Penalty Tax on Additional IRA Distributions
The Tax Court ruled that paying higher education expenses from an IRA was not a modification of a taxpayer’s annuity payments from the IRA that would have made the payments subject to the 10% additional tax on early distributions. Generally under IRC § 72(t), distributions received from an IRA before
Loan Refinancing Deemed a Taxable Distribution
The Tax Court found that the amount by which a taxpayer’s refinancing of a loan from his qualified retirement plan exceeded statutory limits was a deemed distribution subject to the 10% additional tax. Under section 72(p)(2), a loan from a qualified retirement plan to a participant is not treated as
Courts Split on Tax Shelter Exception to Practitioner Privilege
In the long-running Countryside Limited Partnership case, the Tax Court ruled against a government documents discovery request, saying the government had not met its burden of proof for showing the documents were in connection with the promotion of a tax shelter. Thus the government was unable to overcome the federally
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From The Tax Adviser
March 31, 2026
Current developments in taxation of individuals: Part 1
March 31, 2026
Current Developments in Taxation of Individuals: Part 1
March 6, 2026
