In December, the U.S. Department of Health and Human Services expanded hardships eligible for exemption from the Sec. 5000A shared-responsibility payment to include individuals whose policies were canceled by their previous insurers and who find that other coverage options are more expensive than their canceled policies. The shared-responsibility payment, popularly
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Final regs. allow Sec. 336(e) elections for S corps.
The IRS issued final regulations last May that apply when a Sec. 336(e) election is made to treat the sale, exchange, or distribution of at least 80% of the voting power and value of a target corporation’s stock as a nontaxable sale of all its underlying assets, which the regulations
Supreme Court resolves circuit split on gross-valuation-misstatement penalty
The U.S. Supreme Court held that the 40% penalty for a gross valuation misstatement applied when the partnerships at issue had been determined to be shams that lacked economic substance, and, as a result, the partners’ outside basis in the partnerships was zero (Woods, No. 12-562 (U.S. 12/3/13), rev’g 471
IRS: Terminating partnerships may not accelerate amortized startup expenditures
The IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses (REG-126285-12). When finalized, the regulations will apply to technical terminations of partnerships that occur on or after Dec. 9, 2013. Under Sec. 708(b)(1), a partnership terminates if (1)
Guidance on repair regs. updates accounting method change procedures
The IRS issued the second part of the guidance on accounting method changes under the so-called repair regulations, which govern the treatment of expenditures incurred in acquiring, producing, or improving tangible assets (Rev. Proc. 2014-17, modifying and superseding Rev. Proc. 2012-20). The first part of the updated procedures on accounting
IRS issues final instructions for net investment income tax form
The IRS finally released its eagerly awaited final instructions for Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, on Thursday. The instructions, which are 20 pages (for a one-page form), were released in draft form in the beginning of January. Practitioners and taxpayers have waited almost a month after
2014 car, truck depreciation limits issued
On Tuesday, the IRS issued the 2014 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F (Rev. Proc. 2014-21). Prior-year versions of this annual guidance had included figures for first-year bonus depreciation, but because bonus depreciation is not in effect for 2014, the
Final substantial-risk-of-forfeiture rules are released
The IRS on Tuesday finalized regulations that clarify when a substantial risk of forfeiture exists on the transfer of stock to an employee that is treated as compensation under Sec. 83 (T.D. 9659). If a substantial risk of forfeiture exists, the employee does not have to recognize the income at
Report reveals breadth of criminal tax activities
From shady tax preparation businesses to identity theft gangs to corrupt IRS agents, the IRS Criminal Investigation division’s annual report reviewing its accomplishments in 2013 reveals the wide range of criminal tax activities it investigated in the past year. And, the report points out, despite a continued significant decline in
Final FATCA rules are issued
On Thursday, the IRS released a large package of regulations needed to implement the Foreign Account Tax Compliance Act (FATCA). FATCA, enacted as part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147, requires U.S. withholding agents to withhold tax on certain payments to foreign financial institutions
“Dirty Dozen” tax scam list now includes telephone scams
Identity theft and telephone scams top this year’s list of the “Dirty Dozen” fraudulent tax schemes released by the IRS on Wednesday. The annual list contains various common scams that taxpayers may be subjected to at any time, but the IRS says many of them reach a peak during tax
D.C. Circuit affirms decision striking down tax return preparer regs.
The IRS’s attempt to regulate unenrolled tax return preparers was dealt another blow on Tuesday as the D.C. Circuit Court of Appeals held that the agency exceeded its statutory authority when it issued regulations imposing various requirements on tax return preparers (Loving, No. 13-5061 (D.C. Cir. 2/11/14), aff’g No. 1:12-cv-00385
New IDR procedures postponed until March 3
The IRS announced in an email to practitioners that it is pushing back the effective date for its new information document request (IDR) procedures to March 3 (e-News for Tax Professionals 2014-6 (Feb. 7, 2014)). The new procedures had been scheduled to start Jan. 2. The new IDR procedures were
IRS announces additional one-year delay in health coverage penalty for midsize employers
The IRS announced on Monday that it is delaying the so-called shared-responsibility requirement under Sec. 4980H for employers who have 50 to 99 full-time equivalent employees in 2014 (T.D. 9655). These employers will now have until 2016 to offer health care coverage to their employees or be subject to the
New proposed rules determine UBTI of certain exempt employee benefit organizations
The IRS on Wednesday issued proposed regulations to implement Sec. 512(a)(3)(E), which limits the amount of exempt function income that can be set aside when calculating the unrelated business taxable income (UBTI) of Sec. 501(c)(9) voluntary employee beneficiary associations (VEBA) and Sec. 501(c)(17) supplemental unemployment benefit trusts (SUBs) (REG-143874-10). This
Seven ways for small businesses to rein in health care costs
Editor’s note: On Feb. 10, the IRS delayed the penalty for employers with 50 to 99 full-time equivalent employees. Click here for details. New health care regulations in the United States have small business leaders bracing for increased costs and eager to save where they can. Although it was delayed
Trader or investor?
In two decisions in 2013, Endicott, T.C. Memo. 2013-199, and Nelson, T.C. Memo. 2013-259, the Tax Court maintained a high hurdle that taxpayers must clear to show they are in the trade or business of trading in marketable securities rather than acting as investors. Aside from dealers in securities (those
Final regs. issued on Sec. 382 ownership changes
On Oct. 22, the IRS released long-awaited final regulations on owner shifts and ownership changes under Sec. 382. The rules, contained in T.D. 9638, retain a taxpayer-friendly exception for small shareholders and provide a new anti-abuse rule. Sec. 382 limits a corporation’s use of net operating loss (NOL) carryovers and
Regs. permit midyear cuts in employer contributions to 401(k) plans
The IRS issued final regulations that permit employers to make midyear reductions or suspensions of safe-harbor matching or nonelective contributions to retirement plans in certain situations (T.D. 9641). To qualify for salary deferral, Sec. 401(k) plans must meet certain nondiscrimination rules that require non-highly compensated employees to participate in the
IRA-owned LLC’s payment to owner results in retroactive tax and penalties
The Tax Court held that compensation received by a taxpayer from a limited liability company (LLC) that was almost entirely owned by the taxpayer’s individual retirement account (IRA) resulted in several types of self-dealing prohibited transactions. Thus, the IRA owning the LLC automatically terminated as of the first day of the
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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
