The IRS followed up on the Treasury Department’s Monday announcement that it is cracking down on corporate tax inversions by providing more detail on how the crackdown will work (Notice 2014-52). The new rules, which will be issued as regulations, generally apply to inversion transactions occurring on or after Sept.
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Tax
Changes proposed to allocation rules for rollovers
The IRS says it has become aware that some plan providers have been treating disbursements from retirement plans that contain both pretax and after-tax contributions as a single distribution of the aggregate disbursement amount, rather than as separate distributions, as required by the regulations. In proposed regulations issued on Thursday
IRS announces proposed changes to cafeteria plan elections and lookback period
The IRS issued two notices on Thursday, proposing to change the rules for when a taxpayer can revoke health care coverage in a cafeteria plan and enroll in a plan on the Health Insurance Marketplace exchanges, and how to measure the lookback period for determining who is a full-time employee
Special per diem rates issued for 2014–2015 travel expenses
On Friday, the IRS issued its annual update of special per diem rates for use in substantiating certain business expenses taxpayers incur when traveling away from home in 2014 and 2015 (Notice 2014-57).The notice provides the transportation industry meal and incidental expenses rates, the rate for the incidental-expenses-only deduction, and
Regulations update hybrid defined benefit plan rules
On Monday, the IRS released final and proposed regulations providing guidance on so-called hybrid defined benefit pension plans (T.D. 9693 and REG-111839-13). The regulations deal with changes made by the Pension Protection Act of 2006, P.L. 109-280, and the Worker, Retiree, and Employer Recovery Act of 2008, P.L. 110-458. The
PFIC reporting rules do not apply to certain marked-to-market stock
On Wednesday, the IRS announced that it will amend the regulations governing the reporting requirements for U.S. persons who hold stock in passive foreign investment companies (PFICs). The amendments will provide that, if a taxpayer marks to market PFIC stock under Sec. 475 or any Code section other than Sec.
IRS explains power-of-attorney requirements for corporate taxpayers
On Tuesday, the IRS’s Office of Professional Responsibility (OPR) issued a bulletin clarifying when corporate officers or employees must have a valid power of attorney in order to represent the company before the IRS (OPR Bulletin 2014-12). The bulletin also discusses how the existence of a power of attorney may
CPA practitioners sue to stop PTIN fees
Two CPAs have filed suit in the U.S. district court for the District of Columbia, asking the court to stop the IRS from charging fees for issuing preparer tax identification numbers (PTINs), to obtain refunds of fees paid in the past, and to enjoin the IRS from asking for more
ERISA: 40 years later
The 40th anniversary of ERISA’s enactment is a good time to look back at the problems with pensions that the legislation was intended to solve, and the problems that face today’s and tomorrow’s retirees, who increasingly must provide for their own retirement.
Tax software: Ethical, legal, and professional liability risks
This column addresses a CPA’s professional liability exposures as well as ethical and legal obligations related to the use of tax software.
2014 tax software survey
Learn how CPAs in our annual survey assessed the performance, features, and technical support of eight major tax preparation software products.
Success-based fees and milestone payments
When taxpayers incur costs that relate to an acquisition or restructuring, they generally must capitalize any costs incurred to facilitate (i.e., investigate or otherwise pursue) the transaction (Regs. Sec. 1.263(a)-5). When fees paid to service providers are contingent upon the successful closing of a transaction, taxpayers can use a facts-and-circumstances
Rules for written tax advice finalized
Circular 230 final regs. make ubiquitous email disclaimer no longer necessary. The IRS issued final regulations under Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10), on the rules for practitioners to provide written tax advice and certain other related provisions, adopting the proposed regulations
Tax Court foils transferee liability of Reynolds family trusts
State law is applied to determine whether a transferee is liable for a transferor’s tax liability. The Tax Court held that four trusts were not required to pay their former personal holding company’s tax liability. Virginia state law does not contain a corollary to the federal substance-over-form doctrine, and federal
Madoff account value must be determined at trial
The IRS is denied summary judgment on an estate’s valuation of its account in an infamous Ponzi scheme. Whether an account managed by Madoff Investments or its claimed holdings are considered property included in a gross estate and whether a willing buyer or seller of the account could reasonably know
Expanded OVDP a chance to reduce penalties
The new information-reporting requirements of the Foreign Account Tax Compliance Act (FATCA), P.L. 111-147, took effect on July 1. Among other things, FATCA requires foreign financial institutions (FFIs) to report on their accounts held by U.S. taxpayers. More than 77,000 FFIs signed on and acquired approved status in the initial
Supreme Court: Inherited IRAs are not retirement funds
The decision resolving a circuit split allows an inherited IRA to be included in a bankruptcy estate. The U.S. Supreme Court in Clark v. Rameker held that funds in an inherited individual retirement account (IRA) were not retirement funds that were exempt from a husband-and-wife debtors’ bankruptcy estate. Facts: The
Know when to hold ’em (and when to report ’em)
A district court holds that online gambling and payment accounts managed by foreign companies are subject to FBAR reporting. The U.S. District Court for the Northern District of California held that a taxpayer’s online poker and payment accounts with companies located overseas were subject to reporting on FinCEN Form 114,
New IRS appeals process starts Sept. 2
Starting Sept. 2, the IRS Office of Appeals is changing the way it handles appeals to examination decisions. Under the new Appeals Judicial Approach and Culture (AJAC) project, appeals officers are “no longer going to be examiners or investigators,” Appeals Team Manager Philip A. Oyoto told preparers at the IRS
SEC will scrutinize municipal advisers’ rules compliance
A new SEC examination initiative will scrutinize municipal advisers’ compliance with new rules and regulations that are under implementation. The SEC announced Tuesday that its Office of Compliance Inspections and Examinations (OCIE) will examine a significant percentage of municipal advisers for compliance. “The municipal adviser examination initiative will focus on
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