The IRS released its strategic plan on Tuesday for 2009–2013. Not surprisingly, the plan says that the Service will focus on improved taxpayer service as well as increased compliance. The plan also discusses challenges that the IRS anticipates facing over the next few years and how it hopes to meet
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TOPICS / TAX
IRS practice & procedure
FBAR Penalties Reduced for Six Months
The IRS has provided a framework for voluntary disclosure requests containing offshore issues, such as previously undisclosed foreign financial accounts and entities (March 23, 2009, memo from Deputy Commissioner Linda Stiff to the commissioners of the Large and Mid-Size Business Division and the Small Business/Self-Employed Division). The policy will remain
“Differential Wage Payments” During Active Military Service Subject to Income Tax But Not FICA, FUTA
Payments by employers to employees while they are on active military duty for more than 30 days are subject to withholding for federal income tax but are not taxed under the Federal Insurance Contributions Act (FICA) or Federal Unemployment Tax Act (FUTA), the IRS said in Revenue Ruling 2009-11, issued
IRS, Historic Hotel Face Off Over Facade
The Tax Court held that the Uniform Standards of Professional Appraisal Practice (USPAP) are not the sole measure of an expert witness’s reliability. The witness had been called upon to provide a value of a conservation easement restricting the use of real property, or “servitude.” Based on that testimony, the
IRS Alternative Dispute Resolution Programs
The IRS recently extended its fast track settlement program to certain exempt and government entities and announced the establishment of a two-year test of mediation and arbitration procedures for offers in compromise and trust fund recovery penalty cases under the jurisdiction of the Office of Appeals. TEGE FAST TRACKThe Tax
Representing Clients With Tax Delinquencies and Deficiencies
It’s not unusual for CPAs to encounter clients delinquent in filing individual, corporate or payroll returns. CPAs can establish a rewarding practice niche if they are prepared to offer a full range of tax resolution options and be a trusted ally to clients who need to atone for their lapses
Partner-Level Defense Rule Held Valid
The Tax Court upheld the validity of temporary regulations requiring a partner to raise partner-level defenses to penalties in separate litigation after resolution of unified partnership proceedings. Andrew Filipowski created New Millennium Trading LLC in 1999 to generate a deductible loss through the use of foreign currency options. In 2005,
First Circuit Vacates Textron Workpaper Privilege Decision
The First Circuit has vacated its January decision in the Textron case, and a full panel of First Circuit judges will rehear the case in June. The January decision (No. 07-2631 (1st Cir. 1/21/09)) had held that the work-product privilege could operate to prevent the disclosure to the IRS of
IRS Reverses Position on Eligibility of Intangibles for Like-Kind Exchange Treatment
The IRS Office of Chief Counsel has announced a change in its position on the use of certain intangible property in IRC § 1031 like-kind exchanges (CCA 200911006). Previously (in Technical Advice Memorandum 200602034 and Field Attorney Advice 20074401F) the IRS had decided that registered trademarks, trade names, newspaper mastheads,
International Tax Provisions Introduced and to Be Considered This Year
President Obama’s budget proposal for the 2010 fiscal year includes “certain international tax reform and enforcement measures,” but the only detail on this is the following one-line item from the associated revenue table: “implement international enforcement, reform deferral, and other tax reform policies.” This is estimated to raise $210 billion
TIGTA: Some Tax Shelter Promoters Not Disciplined
The IRS’ Office of Professional Responsibility (OPR) was unaware of a significant number of licensed tax practitioners who had been assessed penalties, enjoined by federal courts or criminally sentenced for promoting abusive tax shelters, the Treasury Inspector General for Tax Administration (TIGTA) found in an audit. As a result, the
Sixth Circuit Upholds Use of Life Tables for Lottery Lump Sum
The Sixth Circuit Court of Appeals ruled in Carol J. Negron v. U.S., docket no. 07-4460, that the IRS annuity tables of IRC § 7520 provide a realistic and reasonable estate valuation of a state lottery prize paid as a lump sum. In so doing, it reversed a district court’s
Magazine Article Not a Penalty Defense
The Tax Court upheld penalties against a corporation that ignored its CPA’s advice against claiming bonus depreciation on a used airplane. The corporation instead had relied on a magazine article anticipating a possible law change that would have permitted the deduction. Congress, however, failed to pass the provision. On March
Line Items
IRS ANNOUNCES LIEN RELIEFIn December, the Service said it would expedite processing of requests to subordinate a tax lien to another lien or discharge it in some cases where a home is being sold for less than the amount secured by a mortgage. See Announcement IR-2008-141. The IRS typically takes
Two Out of Three Not Good Enough
The Tax Court ruled that a taxpayer was not entitled to claim a theft loss where he failed to show he had no reasonable chance of recovering his stolen money during the tax year in question. From 1999 to 2001 Dominick Vincentini, a resident of Michigan, was involved with Anderson
Private Annuity Defers Gain
A taxpayer was permitted to defer capital gain when he transferred appreciated capital assets in exchange for a private annuity. The Tax Court held the arrangement met the requirements of Revenue Ruling 69-74, 1969-1 C.B. 43, and thus the capital gain could be deferred until the taxpayer began receiving payments
Worker Classification Still Troublesome
The Tax Court ruled that a worker was an employee rather than an independent contractor partly because he was paid a daily rate during the four years he worked for an energy company and he supervised other employees. The worker classification issue has been a headache for taxpayers and the
Requesting 9100 Relief
A taxpayer who fails to make a tax election by the due date for the election may not be out of luck. Certain extension and administrative relief options exist if the taxpayer can obtain “9100 relief” under Treas. Reg. §§ 301.9100-1 through -3. The drawback is that unless he or
Tax Court Can Look Outside Administrative Record in Determining Innocent Spouse Relief
The Eleventh Circuit has held that the Tax Court could consider evidence outside the administrative record when deciding on a taxpayer’s claim for innocent spouse relief (Neal, No. 06-14357 (11th Cir. 2/10/09)). The taxpayer had petitioned the IRS for equitable relief under IRC section 6015(f) because, unbeknownst to her, her
Late February 1099-B Mailings Will Compress Tax Season for Many
Some brokerage customers of Fidelity Investments won’t receive Forms 1099-B until after the newly extended Feb. 17 general deadline for sending out the information returns, the company said Thursday. Fidelity, the nation’s largest mutual fund company, asked for and received from the IRS an additional extension to the end
Features
FROM THIS MONTH'S ISSUE
4 ways solo practitioners can stand out
Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
