Coming regulations will reduce tax benefits of inversions by preventing certain uses of controlled foreign corporations and closing loopholes in the Sec. 7874 anti-inversion provisions.
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Due diligence in China
Due diligence, especially at private companies, requires professional skepticism, persistence, and cultural sensitivity when evaluating an investment opportunity in China.
Can practitioners give up their email disclaimers?
In June, the IRS finalized changes to Circular 230, Regulations Governing Practice Before the Internal Revenue Service, affecting the provision of written tax advice and certain other related provisions.
Minimum essential coverage, other health care reform guidance issued
The IRS issued final regulations and other guidance on how to determine whether taxpayers have minimum essential health care coverage and listing hardship exemptions for purposes of the individual mandate.
Rules updated for transit fare smart cards and qualified transportation fringe benefits
The Internal Revenue Service issued new rules on the tax treatment of smart cards and debit cards used to purchase transportation for employees.
IRS finalizes rules on relief from failure to file GRAs
The IRS finalized proposed regulations to update the rules that apply to U.S. taxpayers that fail to file gain recognition agreements (GRAs) when they transfer certain property to foreign corporations in nonrecognition transactions (T.D. 9704). The rules change the standards under which transferors are required to recognize gain on the
G-20 leaders commit to automatic exchange of tax information
“Profits should be taxed where economic activities deriving the profits are performed and where value is created”—so said the leaders of the G-20 major economies as they endorsed the Organisation for Economic Co-operation and Development’s (OECD’s) global standard for automatic exchange of tax information at the G-20 summit in Brisbane,
IRS fills in details of one-a-year IRA rollover rule
The IRS clarified how the recently announced change in how it interprets the statutory one-rollover-per-year rule for individual retirement arrangements (IRAs) will affect 2014 rollovers and how the rules will apply starting in 2015 (Announcement 2014-32). Sec. 408(d)(3)(A)(i) permits a tax-free rollover of funds in a taxpayer’s IRA as long
Regulations finalize rules on all-cash D reorganizations
On Monday, the IRS finalized temporary regulations regarding the determination of the basis of stock or securities in all-cash D reorganizations where no stock or securities of the issuing corporation is issued and distributed in the transaction (T.D. 9702). The regulations clarify that in these transactions, only a shareholder that
Final rules determine how E&P is treated in corporate reorganizations
New rules under Sec. 381 will change which corporation succeeds to the tax attributes, including the earnings and profits (E&P), of the transferor or distributor corporation in certain acquisitions. T.D. 9700, issued on Friday by the IRS, also finalizes other related proposed regulations under Sec. 312 clarifying that, in certain
Filing season complications loom, IRS commissioner tells AICPA
The 2015 tax filing season “will be one of the most complicated filing seasons we’ve ever had,” IRS Commissioner John Koskinen said in a keynote address Tuesday to hundreds of attendees at the AICPA National Tax Conference in Washington. He also held out hope of penalty relief for taxpayers affected
Form 990: Late filing penalty abatement
Several types of relief may be available to not-for-profit organizations that incur penalties for violating complex filing requirements.
Whistleblower awards widened
Final rules expand the definitions of collected proceeds and eligible individuals, and specify the criteria for award amounts. Comprehensive final regulations issued in August provide rules for whistleblower awards under Secs. 7623(a) and (b), as well as rules governing the disclosure of return information under Sec. 6103(h) to pursue these
Research and experimentation expenditures clarified
With enhanced definitions and numerous additional examples, final regulations issued in July (T.D. 9680) clarify research and experimentation (R&E) expenditures under Sec. 174 that may be deducted currently or capitalized and amortized. Under the final regulations, the ultimate success, failure, sale, or use of a product is not relevant to a determination
New IRS appeals process launched
Cases lacking documentation or adherence to procedural requirements or that have new taxpayer information will be returned to Examination. In September, the IRS Office of Appeals began a policy of hearing only cases that are fully developed; hearing officers will not do their own investigations and will send any new
Guidance issued on markdown allowances and margin protection payments
Final rules clarify retailers’ treatment of vendor discounts in inventory valuation. Final regulations restate and clarify retailers’ computation of ending inventory value, including the application of common vendor discounts. The amendments to Regs. Sec. 1.471-8 are intended to render that section’s provisions in plainer language and provide rules for how
Effective filing dates of returns are disputable issues of fact
The IRS’s motion for dismissal was denied in a case where determining the timeliness of a taxpayer’s refund claims depended on determining the effective filing date of the taxpayer’s returns. The Court of Federal Claims denied a motion by the IRS to dismiss a taxpayer’s refund claim for two prior
Aircraft rental is passive activity
Failure to properly document material participation prompts a Tax Court ruling that an aircraft rental activity is passive. The Tax Court held that losses from an aircraft rental activity were passive and could not be used to offset income from other business sources. The ruling was based on the taxpayer’s
Jeopardy and termination assessment cases
In some circumstances, the IRS may resort to a series of procedures known as jeopardy or termination assessment and collection. If the IRS believes that the collection of an unassessed liability is in jeopardy, it may take steps to begin collection proceedings without following the normal assessment and collection procedures
Father was custodial parent for dependency exemption and earned income credit
The IRS misapplied the Sec. 152(e) waiver requirements, the Tax Court holds. Even though a divorce instrument awarded custody of a child to her mother, the child’s father could claim the child for a dependency exemption and earned income tax credit because he was the custodial parent, the Tax Court
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