My comments relate to Stephen Huggard’s article titled “Voluntary Disclosure to the IRS: A Viable Option” (March 08, page 40). This article was very well written and right on point. Huggard makes an excellent final comment in the article stating that, “As long as the taxpayer is careful, he or
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TOPICS / TAX
IRS practice & procedure
IRS Commissioner: Tax Collections Must Be Fair Amid Tough Economic Times
The IRS and tax preparers can reach out to taxpayers hurt by the current economic downturn to help them meet their tax obligations, IRS Commissioner Douglas Shulman told the AICPA National Tax Conference on Oct. 27. (Watch the speech here.) While the Service is mindful that many taxpayers are
IRS Appeals Jelke to Supreme Court
The government asked the U.S. Supreme Court to review the Eleventh Circuit’s decision in Estate of Frazier Jelke III v. Commissioner (100 AFTR2d 2007-6694, “Tax Matters: Dunn Does It Again,” JofA, March 08, page 70). The Eleventh Circuit previously declined to rehear en banc its decision overruling the Tax Court
Service Launches LILO, SILO Settlement Initiative
The IRS followed up its recent court victories against LILOs (lease in, lease out) and SILOs (sale in, lease out) with an offer to settle the estimated hundreds of the listed-transaction tax shelters still on companies’ books. The offer, sent initially on Aug. 6 to 45 large corporations known to
Shell Wins $19M Refund
A district court in Texas allowed Shell Petroleum to carry back capital losses and receive a nearly $19 million refund. The losses were generated by a restructuring transaction involving an exchange of highbasis property for new subsidiary stock followed by loss-generating dispositions of the stock. In 1992, Shell Oil was
Health Accounts Illustrated
The IRS has provided guidance on a variety of issues pertaining to health savings accounts (HSAs). The 42 questions and answers of Notice 2008- 59 address such issues as eligibility for individuals with “limited purpose” coverage by a health flexible spending account (FSA) or health reimbursement arrangement (HRA). The guidance
All That Glitters Is Not Deductible
The Tenth Circuit Court of Appeals upheld a district court’s ruling that a company could not carry back a loss because the statute of limitations had passed. Taxpayers that incur net operating losses are permitted under IRC § 172 to carry them back two years and forward 20 years. A
Startup Expensing Election Now Deemed
Taxpayers may elect under IRC § 195 to deduct in the first year of operation up to $5,000 of startup expenses (reduced by the excess of total startup costs over $50,000) of an active trade or business and generally must amortize the remainder over 15 years. In July, the IRS
Court Hangs Up On Phone Tax Refund
The Court of Federal Claims held that the statute of limitations applies to taxpayers who paid the telephone excise tax through carriers and were not required to file returns related to it. Until May 2006, the IRS contended that telephone toll charges that varied only with elapsed time but not
Taxpayer Ignores CPA’s Advice At His Peril
An owner of a California health care company was found liable by the Tax Court for an accuracy-related penalty for a deduction he claimed in spite of his CPA’s advice against it. Larry Wadsworth was a general partner of Gold Coast Medical Services (GCMS), which provided medical products and services
GRAT Expectations
The Service adopted final regulations governing inclusion in estates of trust property of grantor retained trusts, charitable retained trusts and similar trusts. The final regs (TD 9414) are effective for estates of decedents dying after July 13, 2008, and modify and clarify a number of features of their proposed version
Criminal Enforcement Ramps Up
©2008 AICPA
Rules Clarified for Claiming the Exemption (and Related Tax Breaks) for Children of Divorced Parents
New final rules clarify who may claim qualifying children in the case of divorced or separated parents. Treasury Decision 9408, amending Treas. Reg. § 1.152-4, clarified the “counting nights” rule to identify a custodial parent. In promulgating the final regulations, the IRS took into consideration comments of the AICPA (Aug.
Equitable Owner Equals Deduction
The Tax Court held that a married couple could deduct mortgage interest and property tax payments made from a corporate checking account on a home that was owned by their son. The court held that the taxpayers were equitable and beneficial owners of the property and that the checking account
Nexus for Sales and Use Taxes
States have become more aggressive in claiming a seller has substantial nexus for sales and use tax purposes. They look for in-state activities, relationships and assets of unregistered businesses with customers in the state. Here are some tips to help businesses determine their sales and use tax collection obligations: Review
Knowing But Innocent
The Tax Court held that the IRS abused its discretion in denying a stay-at-home mom’s request for innocent spouse relief because it did not consider all of the relevant factors. Chrystina Nihiser filed for relief after her husband stopped paying their taxes due to financial problems with his business. Although
More Support for Check-the-Box
Following the U.S. Supreme Court’s refusal to hear an appeal attacking the validity of “check-the-box” provisions, a district court has similarly denied a legal challenge to the default business entity classification. The plaintiff in the more recent decision, L&L Holding Co. LLC v. U.S. (101 AFTR2d 2008-2081), contested an employment
Another SILO Pulled Down
A district court upheld the IRS’s denial of deductions by two large banks from a sale in, lease out (SILO) transaction, continuing a string of victories by the Service against the one-time promoted shelter. The opinion by the court for the Northern District of Ohio against KeyCorp and PNC Financial
Lack of Records Equals Recapture
The Tax Court held that a taxpayer had to recapture the majority of his prior-year section 179 deduction since he failed to show that the business use of his GMC Suburban remained above 50% in the following tax year. His testimony of the business use of the vehicle, although considered
When (and Where) Is It Filed?
The Fourth Circuit recently upheld a Tax Court decision that a deficiency notice beat the three-year statute of limitations only because the taxpayer had hand-delivered his returns to the wrong office. The IRS is generally required by IRC § 6501(a) to assess income tax deficiencies no later than three years
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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
