On Wednesday, the IRS issued final regulations under Sec. 6707, which imposes a large penalty on any material adviser who fails to file a return required under Sec. 6111(a) disclosing a reportable transaction or who files a false or incomplete return (T.D. 9686). The regulations adopt the proposed regulations issued
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Tax
IRS issues guidance on health insurance premium tax credits
The IRS issued regulations and revenue procedures Thursday addressing how to calculate the Sec. 36B premium tax credit, including how the credit is calculated in conjunction with the Sec. 162(l) deduction for health insurance premiums of self-employed individuals. The temporary regulations (T.D. 9683) also provide rules for taxpayers who are
New IRS rules simplify compliance for money market fund shares
In response to new SEC pricing rules for shares in certain money market funds (MMFs), the IRS on Wednesday issued guidance that allows a simplified method for calculating gain or loss on shares in MMFs subject to the new rules and exempts redemptions of shares in these MMFs from the
Federal courts disagree on health care credits for federal exchanges
The appellate courts for the D. C. Circuit and the Fourth Circuit issued conflicting decisions on Tuesday regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health insurance on exchanges set up by the federal government. The D.C Circuit held that the regulation permitting taxpayer’s
Final rules issued on bona fide indebtedness and terminating partnership’s startup expenses
On Tuesday, the IRS issued T.D. 9682, which finalized proposed regulations relating to basis of indebtedness of S corporations to their shareholders that provide that S corporation shareholders increase their basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide, which is determined
New rules on covered asset acquisitions will shut down transactions to avoid Sec. 901(m)
In Notice 2014-44, the IRS announced that it would issue regulations to prevent taxpayers from misapplying the statutory disposition rule in cases where the gain or loss from the disposition of the relevant foreign asset (RFA) is recognized for U.S. income tax purposes but not for foreign income tax purposes.
Definitions of R&E expenditures are amended under final rules
The IRS issued final regulations on which amounts paid or incurred in connection with the development of tangible property, including pilot models, qualify for the Sec. 174 deduction (or amortization) for research and experimental expenditures (T.D. 9680). The regulations finalize proposed rules issued last September (REG-124148-05), with a few changes
Effective date of fiduciary fee unbundling rules delayed until 2015
In response to a comment that the current effective date of the new rules on fiduciary fees does not give fiduciaries enough time to implement them, the IRS amended T.D. 9664 to delay the date. As a result, the new rules governing which costs of trusts and estates are subject
Court halts IRS regulation of contingent fees for refund claims
The U.S. District Court for the District of Columbia granted a motion of summary judgment and issued an injunction to prevent the IRS from regulating contingent fee arrangements for the preparation and filing of ordinary refund claims under Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R.
Partnership interest expense allocation rules are finalized
The IRS has finalized, without substantive changes, proposed regulations that were issued in conjunction with temporary regulations in January 2012. The final regulations make permanent four changes to the rules for allocating and apportioning interest expense for partners in partnerships (T.D. 9676). The first change is to the method for apportioning
AICPA sues IRS to stop return preparer program
The AICPA filed suit in the U.S. District Court for the District of Columbia on Tuesday, asking the court to halt the IRS’s recently introduced Annual Filing Season Program. The AICPA’s three-count complaint asks the court to declare the rule implementing the program unlawful and stop its operation. The Annual
Fighting identity theft, IRS issues final rules on truncated identification numbers
The IRS issued final regulations (T.D. 9675) that allow the use of truncated taxpayer identification numbers (TTINs) on payee statements and certain other documents where not prohibited by the Internal Revenue Code, applicable regulations, or other guidance published in the Internal Revenue Bulletin, forms, or instructions. The regulations finalize the
One-IRA-rollover-a-year rule will be effective in 2015, IRS says
Following up on its promise earlier in the year to follow the Tax Court’s holding that the limit of one rollover per year applies on an aggregate basis and not on an IRA-by-IRA basis, the IRS withdrew a proposed regulation from 1981, Prop. Regs. Sec. 1.408-4(b)(4)(ii), which had provided otherwise
E-filing of amended returns, elimination of Form 1040X among TIGTA recommendations
Taxpayers should be allowed to use Form 1040 to amend their returns and should be able to e-file amended returns, according to recommendations made by the Treasury Inspector General for Tax Administration (TIGTA) on Wednesday (TIGTA Rep’t No. 2014-40-028). Although individual tax returns in the Form 1040 series may all
Limit on direct deposit of refunds will go into effect in 2015
In its latest attempt to fight tax refund fraud, the IRS said that, beginning in January 2015, it will impose a limit of three electronic direct deposits of tax refunds into a single financial account or prepaid debit card. Taxpayers who exceed the limit will receive the fourth and subsequent
The lure of a Sec. 475 election
A mark-to-market election can be very beneficial for securities or commodities traders. Here’s how to determine who qualifies for the election and who should make it.
The Sec. 4980H assessable payment for large employers
Know your business’s responsibilities under the Affordable Care Act.
Health care reform essentials
New health care regulations create many challenges and opportunities for businesses. Here are 10 things CPAs should know about the new rules to help the businesses they serve make wise decisions.
Creating the net investment income tax regulations: A conversation with David Kirk
The JofA gets an inside view from David Kirk, one of the principal architects of the Treasury regulations related to the 3.8% tax that was passed to raise money for health care reform.
IRA participants can purchase longevity annuities
Final regulations issued on Wednesday (T.D. 9673) permit individual retirement account (IRA) participants to enter into contracts for annuities that begin at an advanced age (often called longevity annuities), using a certain amount of their account balances, without having these amounts count for calculating required minimum distributions from the IRAs
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