Because the IRS believes that requiring the filing of Form 1099-C, Cancellation of Debt, at the expiration of a 36-month nonpayment of debt testing period “creates confusion for taxpayers” and does not increase tax compliance, the Service released proposed regulations to eliminate the rule (REG-136676-13). Under Sec. 6050P and its
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Tax
Changes made to IRS streamlined offshore compliance procedures
The IRS updated its streamlined offshore compliance program to provide procedures taxpayers residing both inside and outside the United States should use to participate in the program. The streamlined offshore compliance program is for taxpayers whose failure to comply with requirements to report offshore assets is nonwillful. It is designed
Certain FATCA deadlines are postponed
The IRS announced its intention in Notice 2014-59 to amend temporary regulations it issued under the Foreign Account Tax Compliance Act (FATCA) on March 6, 2014, to modify the effective dates of (1) the standards of knowledge that apply to a withholding certificate or documentary evidence to document a payee
Notice defines terms for economic substance doctrine
On Thursday, the IRS provided guidance defining “transaction” for purposes of applying the Sec. 7701(o) economic substance doctrine and “similar rule of law” for purposes of the Sec. 6662(b)(6) accuracy-related penalty (Notice 2014-58). The economic substance doctrine is a common law judicial doctrine that disallows tax benefits of a transaction
AICPA asks for raise in repair regulations’ de minimis safe harbor threshold
Jeffery Porter, CPA, chair of the AICPA’s Tax Executive Committee, wrote to Andrew Keyso, IRS associate chief counsel, on Wednesday, raising the AICPA’s concerns about the low amount of the de minimis safe harbor threshold in the tangible property regulations (T.D. 9636) that were issued in September 2013, and about
Asset protection of retirement funds after Clark
Protection for inherited IRAs and Roth IRAs is still possible after a Supreme Court decision denied their exemption from bankruptcy estates.
The tip of the iceberg: Professional liability claims and international taxation
International tax issues can present significant challenges for a CPA firm. Even the smallest client may provide goods or services outside the United States or use a foreign supplier, sometimes without the CPA even realizing it.
Sec. 121 gain exclusion does not offset suspended passive losses
Qualifying taxpayers who convert a principal residence to rental property and sell it can exclude gain under Sec. 121 without offsetting any passive losses carried forward. The IRS concluded in a Chief Counsel Advice memo (CCA) that excluded gain from the sale of a former principal residence that was converted
Qualified lessee construction allowances
Under Sec. 110, certain businesses that are tenants of a retail space may exclude from gross income amounts received from the lessor of the space to construct or improve real property used in the taxpayer’s trade or business. This safe harbor applies where the lease is for 15 years or
AICPA sues IRS to stop return preparer program
An unenrolled preparer program is an “end run” around an adverse court decision, the Institute says. The AICPA filed suit in the U.S. District Court for the District of Columbia in July, asking the court to halt the IRS’s recently introduced Annual Filing Season Program. The AICPA’s three-count complaint asks
Tax relief for small employer retirement plans
To avoid the expense of establishing a retirement plan, many small employers have left their employees on their own when it comes to saving for retirement. However, the small employer pension plan startup costs credit under Sec. 45E alleviates some of the burden by allowing a credit for establishing a
IRS issues guidance on health insurance premium tax credits
Allocation of credit, abused spouses, and self-employed taxpayers are among issues addressed. The IRS issued regulations and revenue procedures addressing how to calculate the Sec. 36B premium tax credit (subject of the lawsuits discussed in the previous item), including how the credit is calculated in conjunction with the Sec. 162(l)
Federal courts disagree on premium tax credits through federal exchanges
The IRS will continue processing credit claims despite one circuit’s decision overruling a key Affordable Care Act provision. The appellate courts for the D.C. Circuit and the Fourth Circuit issued conflicting decisions on July 22 regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health
Goodwill not distributed to sole shareholder
The Tax Court finds that a family trucking business did not distribute appreciated intangible assets under Sec. 311(b). The Tax Court held that a trucking company’s alleged goodwill was personally owned by its sole shareholder, and therefore the trucking company had no goodwill asset to transfer. Because goodwill was not
Giant Eagle’s advance deductions grounded
No deduction or gross profit offset is allowed for discounts offered on future fuel purchases by customers under a customer loyalty program. The Tax Court held that a taxpayer was not entitled to deduct the estimated future cost of fuel discounts earned by its customers until those discounts were redeemed.
Final regs. allow deduction for local lodging expenses
Regulations issued on Tuesday finalize rules the IRS put into effect in 2012 allowing employees to deduct certain expenses paid or incurred for local lodging as business expenses (T.D. 9696). Normally, lodging expenses a taxpayer incurs while not traveling away from home are considered personal expenses under Sec. 262(a) and
Vision, dental, and long-term-care benefits qualify as limited excepted benefits under new IRS rules
Dental, vision, and long-term-care benefits will qualify as excepted benefits under final regulations issued by the IRS (T.D. 9697). Excepted benefits are not subject to certain health reform requirements enacted as part of the Health Insurance Portability and Accountability Act (HIPAA), P.L. 104-191, and the Patient Protection and Affordable Care
IRS signals PPACA compliance issues for 2015
This month, the IRS made several updates to the Internal Revenue Manual (IRM) that provide insight on the notices and enforcement methods the Service will use next tax season to ensure taxpayers comply with the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148. Most compliance efforts focus on the
AICPA identifies problems with IRS’s electronic signature rules
Jeffrey Porter, chair of the AICPA’s Tax Executive Committee, sent a letter to IRS Commissioner John Koskinen on Wednesday raising concerns about the IRS’s recently issued guidance on electronic signatures. The letter addresses the electronic signature standards that apply when a taxpayer does not appear in person before the tax
Doctors lack standing to challenge delay of employer mandate
The Seventh Circuit affirmed the dismissal of a suit objecting to the IRS’s decision to delay imposing the Sec. 4980H employer mandate penalty until 2015 (Association of American Physicians and Surgeons, Inc., No. 14-2123 (7th Cir. 9/19/14), aff’g No. 13-C-1214 (E.D. Wis. 3/18/14)). Under Sec. 4980H, an applicable large employer
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