On Wednesday, the IRS issued proposed regulations on disguised sales of property to or by a partnership under Sec. 707 and the treatment of partnership liabilities under Sec. 752 (REG-119305-11). The IRS says the proposed regulations are designed to address “deficiencies and technical ambiguities” in the current regulations. Disguised sales
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Simplified method offered for requesting extended time to make portability election
The IRS on Monday offered certain executors a simplified way to request an extension of time to make the “portability” election to transfer a deceased spouse’s unused estate tax exclusion to the surviving spouse (Rev. Proc. 2014-18). Executors of estates of spouses who died in 2011, 2012, or 2013 and
Final version of net investment income tax form released
Just in time for the start of tax season, the IRS has released the final version of Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, which will be used by individuals and trusts and estates to compute the new 3.8% tax and then to report the tax on Forms
Minimum essential coverage and shared-responsibility penalty rules provide transitional relief for individuals
Proposed regulations issued by the IRS on Friday answer a number of questions regarding the Sec. 5000A “individual mandate” under 2010’s health care reform legislation, including the definition of those government programs that do not provide minimum essential health care coverage (REG-141036-13). They also provide a hardship exemption for individuals
Guidance issued on accounting method changes under repair regs.
The IRS on Friday issued long-awaited 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. 2014-16). Several sections of the repair regulations require taxpayers to secure the IRS’s consent before changing to an
District court says premium tax credits are available in federal health care exchanges
In a decision that aids the implementation of a key provision of 2010’s health care reform legislation, the federal district court for the District of Columbia held that the Sec. 36B premium tax credit is available to taxpayers who purchase health insurance through the 34 state health care exchanges that
Partnership basis rules proposed
The IRS on Wednesday issued proposed regulations providing guidance on the application of Sec. 704(c)(1)(C) added by the American Jobs Creation Act of 2004, P.L. 108-357 (AJCA), and the amendments to the mandatory basis adjustment rules of Sec. 743 in the AJCA. The proposed regulations would also conform the regulations
Swiss court stops handover of tax information to U.S.
A Swiss court has prevented the handover of information on U.S. account holders to the IRS by the Julius Baer Group Ltd., a Swiss bank (A v. Federal Tax Administration, A-5390/2013 (Fed. Admin. Ct. 1/6/14)). The IRS requested information from the bank on its customers who are U.S. citizens based
New procedures for reinstatement of tax-exempt status are introduced
Tax-exempt organizations that have had their tax-exempt status automatically revoked because they failed to file required annual returns for three consecutive years have new procedures for getting their exempt status reinstated, under guidance issued by the IRS on Thursday (Rev. Proc. 2014-11). Earlier guidance providing methods for reinstating exempt status
Tax Court allows discount of gift value for assumption of estate taxes
The Tax Court held that a gift’s fair market value (FMV) may be determined with reference to the recipient’s assumption of the potential Sec. 2035(b) estate tax liability, abandoning its precedent from McCord, 120 T.C. 358 (2003). Jean Steinberg, who was 89, entered into a binding agreement with her four
Proposed regulations change definition of R&D expenditures
The IRS recently 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 regulations would, among other things, settle the question of whether the sale of a product resulting from otherwise
Duty of consistency thwarts inheritors’ basis step-up
The Tax Court held that the duty-of-consistency doctrine prevented two taxpayers from using fair market value (FMV) as the basis of inherited property where the estate had previously valued the property using the special valuation election of Sec. 2032A. The value of property included in a decedent’s estate is its
Engagement letters for the individual tax practitioner
Follow best practices in this crucial document for any tax engagement.
Are courts ready to protect more accountant-client communications?
Recent court decisions, especially those involving corporate tax reserve accrual workpapers, indicate that the judicial view of the accountant-client relationship is changing and that courts may be willing to provide greater protection for communications between accountants and their clients.
Internet Tax Freedom Act preempts Illinois click-through nexus law
The Supreme Court of Illinois held in October that the state’s click-through nexus law is expressly preempted by the federal Internet Tax Freedom Act (ITFA), P.L. 105-277, which prohibits states from imposing discriminatory taxes on electronic commerce. The Illinois law (35 Ill. Comp. Stat. 105/2) expanded the definition of retailers
Buckle up for tax season
For taxpayers and their CPA return preparers, now is the time to power their way through filing season, hopefully with a minimum of hassle. Plus: The JofA’s annual Quick Guide, a printable card that contains dollar thresholds, tax tables, standard amounts, credits, and deductions to keep at your fingertips during tax season.
Calculating the health care individual mandate penalty
The shared-responsibility payment by applicable individuals, better known as the “individual mandate” penalty for failure to have qualifying health insurance coverage, was at the heart of the litigation over the Patient Protection and Affordable Care Act of 2010, P.L. 111-148 (PPACA), that culminated in the U.S. Supreme Court’s upholding the
Procedures for IRS rulings, technical advice, etc., updated for 2014
As 2013 drew to a close, the IRS was busy issuing annual updates to the revenue procedures that govern its operations and interactions with taxpayers. In particular, the IRS issued Rev. Procs. 2014-1 through 2014-6, all on Dec. 30, 2013. These include the list of “no ruling” areas in which
Top tax news developments in 2013
The past year featured a large number of tax developments, some of which got extensive coverage in the media, and many of which got less coverage but affect almost all taxpayers and practitioners. As we get ready to welcome a new year, here’s a look back at the most important
IRS announces automation of taxpayer resources, start of business filing season
The IRS announced on its website that, beginning in 2014, it will stop providing a number of taxpayer assistance services in person or over the phone and will shift those services online. The move is designed to free up IRS employees to help taxpayers deal with issues, such as identity
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