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.
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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
Proposed small employers’ health insurance premium tax credit rules issued
On Friday, the IRS issued proposed regulations governing the Sec. 45R credit for small employers that offer health insurance coverage for employees (REG-113792-13). The proposed rules incorporate the provisions of Notices 2010-44 and 2010-82 (which were issued to provide guidance for employers claiming the credit between its original 2010 effective
Tenth Circuit throws out decision striking down Colorado’s Amazon law
The permanent injunction that a federal district court issued in March 2012 enjoining Colorado from enforcing its Amazon law requiring remote sellers to report sales in the state has been dismissed by an appeals court. The Tenth Circuit held on Tuesday that the Tax Injunction Act (TIA, 28 U.S.C. §
Online FATCA registration system launched
The IRS on Monday announced the launch of an online system that foreign financial institutions (FFIs) can use to register with the agency to meet their obligations under the Foreign Account Tax Compliance Act (FATCA) (IR-2013-69 (8/19/13)). The system allows institutions that must register with the IRS to create an
Amounts on late-filed S corporation return were not disclosed on taxpayer’s return
For purposes of determining whether there had been a substantial understatement of gross income on a taxpayer’s return, the IRS Office of Chief Counsel determined that amounts on a Form 1120S, U.S. Income Tax Return for an S Corporation, filed after the three-year statute of limitation expired, were not considered
IRS issues draft FATCA report form
On Thursday, the IRS released a draft Form 8966, FATCA Report, which will be used by foreign financial institutions (FFIs) and withholding agents to comply with their FATCA reporting and withholding requirements. Under the Foreign Account Tax Compliance Act (FATCA), enacted as part of the Hiring Incentives to Restore Employment
Revenue procedure provides liberal relief for late S corp. elections
On Wednesday, the IRS consolidated the provisions of a number of previous revenue procedures for requesting relief for late S elections under Sec. 1362, late qualified subchapter S trust (QSST) elections, late electing small business trust (ESBT) elections, late qualified subchapter S subsidiary (QSub) elections, and late corporate classification elections
Final rules issued on IRS disclosure of tax return information under health care law
The IRS issued final regulations about how it will release certain tax return information to the Department of Health and Human Services (HHS), as required by 2010’s health care legislation (T.D. 9628). The final regulations, which will be effective Wednesday, describe certain items the IRS will disclose in addition to
Proposed rules reset limitation for pursuing equitable innocent spouse relief
On Monday, the IRS issued proposed regulations under Secs. 6015(f) and 66(c) changing the deadline for taxpayers to request innocent spouse relief from joint liability (REG-132251-11). The proposed rules generally adopt new time limitation rules announced in Notice 2011-70, and, as a result, the regulations are effective the date the
“Private attorney general” can deduct his lawyers’ fees as trade or business expenses
In a case of first impression, a federal district court held that a taxpayer who zealously and single-mindedly pursued False Claims Act lawsuits against his former employer was engaged in the trade or business of prosecuting those lawsuits and he could deduct legal expenses related to that trade or business
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