On Tuesday, the IRS released Notice 2013-59, explaining how the retroactive extension of the Sec. 179 rules under the American Taxpayer Relief Act of 2012 (ATRA), P.L. 112-240, operates when applied to qualified real property and how to allocate the portion of gain attributable to the qualified real property upon
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Tax
Health coverage information reporting requirements guidance issued
The IRS on Friday issued two related proposed regulation projects on health care coverage reporting requirements under the Patient Protection and Affordable Care Act, P.L. 111-148. One set of proposed regulations gives guidance to providers of minimum essential health coverage that are subject to the information-reporting requirements of Sec. 6055
Proposed regulations change definition of R&D expenditures
In proposed regulations issued on Thursday, the IRS provided guidance on the treatment under Sec. 174 of research and development (R&D) expenditures incurred in connection with the development of tangible property, including pilot models (REG-124148-05). The proposed changes would, among other things, settle the question of whether the sale of
Final rules remove “credit ratings” from regulations
The IRS on Thursday issued final regulations that remove all references to and all requirements of reliance on “credit ratings” from Treasury regulations (T.D. 9637). The regulations provide substitute standards of creditworthiness. They finalize rules that were issued in temporary form in 2011 to meet requirements mandated by the Dodd-Frank
Regulations clarify treatment of a debt instrument under straddle rules
On Wednesday, the IRS issued identical temporary (T.D. 9635) and proposed regulations (REG-111753-12) to clarify the treatment of debt instruments that are part of a straddle. The regulations provide guidance for when an issuer’s obligation under a debt instrument may be a position in actively traded personal property, in which
Final regulations attack artificially generated foreign tax credits
The IRS issued final regulations on determining the amount of taxes paid for purposes of the foreign tax credit (T.D. 9634). The regulations are designed to curb certain transactions that the IRS says “produce inappropriate foreign tax credit results.” They finalize proposed regulations issued in 2011 with no substantive change
Preventing a challenge to (un)reasonable compensation
As the IRS increases scrutiny of executive compensation, CPAs need to proactively advise their clients on how to withstand these inquiries. As a result of IRS training initiatives, three types of entities draw the most attention and therefore need good advice from CPAs. First, closely held C corporations are examined
IRS strikes out against Steinbrenner
In a family trust case, the U.S. District Court for the Middle District of Florida found in favor of the son of the New York Yankees’ late owner, George Steinbrenner, by ruling that a claim for refund was timely filed and that the date of payment was the correct starting
No constructive dividend from services rendered at cost
The Tax Court held that the sole owner of a construction corporation did not receive a constructive dividend in the amount of forgone profit when the corporation built a lakefront home for him and his wife at cost. The shareholder fully reimbursed the corporation for its costs, including overhead, and
Vineyard and homes held unfeasible, erasing easement’s value
The Tax Court disallowed a taxpayer’s charitable contribution deduction of a conservation easement because the taxpayer failed to show the easement had any value. According to the court, the taxpayer did not show that the highest and best use of the contributed property changed as a result of the contribution.
2013 tax software survey
In this year’s survey by the JofA and The Tax Adviser, more than 5,000 CPAs assessed the software they used to prepare 2012 tax returns. This year, tax preparers had to contend with a compressed filing season caused by late enactment of extender legislation in the American Taxpayer Relief Act
IRS acquiesces to broader Tax Court review of innocent spouse cases
In a favorable development for taxpayers seeking innocent spouse equitable relief, the IRS announced that it will acquiesce to a Ninth Circuit holding (Wilson, 705 F.3d 980 (9th Cir. 2013), aff’g T.C. Memo. 2010-134) that allowed the Tax Court to consider newly developed information during trial. The IRS had argued
The brave new world of cost basis reporting
Recent tax law changes have made accurately calculating and reporting clients’ capital gains even more critical with higher effective tax rates being imposed on those with higher adjusted gross income (regardless of source) and the new Sec. 1411 net investment income tax taking effect for tax year 2013. It had
IRS postpones employer health care penalty and information reporting
The IRS postponed for one year the large-employer health care penalty and certain information-reporting rules that had been due to take effect starting Jan. 1, 2014. The delay was informally announced July 2 on a Treasury Department blog, followed a week later by Notice 2013-45, which postpones to 2015 the information-reporting
State tax tribunals: A growing trend
The recent growth of the independent tax tribunal as a means to resolve state tax issues prior to trial is a significant development in the area of adjudicating state tax appeal controversies. The use of an impartial, independent forum outside the dominion and control of the state tax authority is
The qualified dividend multiplier effect
With the passage of the American Taxpayer Relief Act of 2012, P.L. 112-240, taxpayers can continue to save significant taxes on qualified dividends and long-term capital gains. Excluding the special 25% and 28% rates, Sec. 1(h)(1) now provides for three rates on qualified dividends and long-term capital gains (preferential income):
IRS proposes increased user fees for installment agreements, offers in compromise
On Thursday, the IRS issued proposed regulations to raise user fees for installment agreements from $105 to $120 and for offers in compromise from $150 to $186. The new fees are scheduled to take effect Jan. 1, 2014 (REG-144990-12). The user fees have not been raised since 2007 for installment
All legal same-sex marriages to be recognized for tax purposes, IRS says
In the wake of the Supreme Court’s Windsor decision invalidating a portion of the Defense of Marriage Act (DOMA), the Treasury Department and IRS announced on Thursday that “same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.” The IRS also
Final rules issued on individual health care mandate
The IRS released final regulations Tuesday on the Sec. 5000A shared-responsibility payment—the penalty or tax imposed on individual taxpayers who do not obtain minimum essential health care coverage beginning in 2014 (known as the “individual mandate”) (T.D. 9632). The final rules adopt the proposed regulations issued in January with a
Final regs. adopt differential income stream method for cost-sharing agreements
On Monday, the IRS issued regulations (T.D. 9630) that govern the application of the differential income stream approach to cost-sharing arrangements. The regulations finalized without change regulations proposed in 2012. At the end of 2011, the IRS published final cost-sharing rules under Sec. 482. The goal of the new regulations
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