The IRS has released a revenue procedure establishing a program for the pre-approval of Sec. 403(b) plans. Under the program, beginning June 28, 2013, it will accept applications for opinion and advisory letters as to whether the form of “prototype plans” and “volume submitter plans” meet the requirements of Sec.
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Appeals court reverses $2.6 million penalty against tax shelter promoter
The Fourth Circuit Court of Appeals reversed and remanded a district court decision because the lower court permitted the jury to hear evidence of a taxpayer’s failure to file his personal income tax returns and to pay his taxes as evidence of his bad acts in determining whether he should
IRS’s identity theft liaison pilot program with law enforcement expands to 50 states
The IRS announced the expansion of its Law Enforcement Assistance Program on identity theft to 50 states and the District of Columbia (IR-2013-34). The expansion was effective Friday. Under the program, state and local law enforcement officials with evidence of identity theft involving fraudulently filed tax returns obtain permission from
Individual health care mandate rules proposed
The IRS released proposed rules for 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 (the controversial “individual mandate”) (REG-148500-12). Separately, the IRS also issued final regulations defining affordable coverage for purposes of the premium
Proposed regs. would govern employment tax liability of third-party agents
The IRS released proposed regulations (REG-102966-10) under Sec. 3504 (acts to be performed by agents) that would govern the liability for employment taxes when an employer designates an agent under a “service agreement” to pay its employees and to satisfy all employment tax obligations. Such agents include payroll service providers,
Release of dependency exemption trumps child support
In two recent cases, the Tax Court ruled on the validity of a dependency exemption release to a noncustodial parent. Taken together, the cases illustrate how a properly executed and filed Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, is the key to releasing
Simplified home office deduction safe harbor now available
In Rev. Proc. 2013-13, issued in January, the IRS gave taxpayers an optional safe-harbor method to calculate a deduction for expenses of a business use of a residence under Sec. 280A, effective for tax years beginning in 2013. Individual taxpayers who elect this method can determine the deduction by multiplying
Confidential and privileged communications
As tax advisers, accountants should understand when communications and work product are privileged and when they are not. The IRS is granted significant power to pursue information in examining a tax return or collecting a tax liability, and the courts have interpreted this summons power as broad authority to obtain
FATCA final regulations cover all the bases
The IRS issued final regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities (T.D. 9610). Under the Foreign Account Tax Compliance Act of 2009 (FATCA), enacted as part of the Hiring Incentives to Restore Employment Act of
Making a “backdoor” Roth IRA contribution
Sec. 408(d)(1) ordinarily requires a pro rata allocation between taxable and nontaxable amounts (using the Sec. 72 annuity rules) when reporting distributions received from an individual retirement plan (an individual retirement account or annuity (IRA)). The practical effect is that a taxpayer must recover any nontaxable amount (basis) ratably as
Tax considerations when dividing property in divorce
The emotional aspects of a divorce often interfere with planning for the efficient distribution of the marital estate. The shock and ill feelings may create a barrier between spouses that prevents even discussing issues. Tax practitioners need to know how to explain to a divorcing client the tax realities, to
Golf course easement donation lands out of bounds
The Tax Court disallowed a taxpayer’s deduction for a conservation easement because the taxpayer’s donated golf course was not a qualified real property interest. The court found that the golf course was not subject to a use restriction in perpetuity since the easement agreement permitted the taxpayer, with the approval
IRS extends suspension of examinations of tangible property capitalization issues
On Wednesday, the IRS posted an updated Large Business & Industry (LB&I) Directive for field examinations on the repair vs. capitalization issue that extends the suspension of examinations (LB&I-04-0313-001). The effective date of the tangible property temporary regulations (T.D. 9564) (in amendments published Dec. 17, 2012) has been extended to
Appeals court denies IRS request for stay in return preparer regulation case
The IRS lost another round in its court battle to regulate tax return preparers when the U.S. Court of Appeals for the District of Columbia Circuit denied its motion to stay an injunction halting its return preparer regulation program, pending appeal of a lower court’s decision (Loving, No. 1:12-cv-00385-JEB (D.C.
Identity theft, phishing top IRS’s “Dirty Dozen” tax scams
The IRS issued its “Dirty Dozen” list of tax scams Tuesday, highlighting fraudulent schemes commonly committed by and upon taxpayers. The annual warning, released to coincide with tax filing season, emphasizes the most egregious schemes involving filing false returns or return items, but it also advises yearlong vigilance against practices
“Sovereign citizens” promoter faces up to 164 years in prison
A proponent of the “sovereign citizens” movement and self-proclaimed president of the “Republic for the United States” has been convicted of conspiracy to defraud the United States through a series of seminars in which attendees were taught to pay their federal income taxes by filing fictitious bonds (Turner, No. 1:12cr169-MHT
Taxpayers filing delayed forms get late-payment penalty relief
On Wednesday, the IRS announced that it will waive the penalty normally assessed for late payment of income tax, for taxpayers who have requested an extension of time to file their return and who are filing one of the 31 forms that were delayed until March because of the last-minute
Tax filing resources—Tax year 2012
This is the one-stop shop for all the updates you need to know for this year’s tax filing season. Find resources from the Journal of Accountancy, plus tax return checklists and tax savings tips from the AICPA, categorized by tax topic. INDIVIDUAL TAX All 2012 tax returns can now be
Tax reform prospects good, say veterans of 1986 reform
Developments since the 1986 Tax Reform Act was signed favor a successful outcome for the current reform effort, said two experts who worked for congressional committees producing the earlier legislation. But they also agreed that a tax reform bill probably won’t be enacted until next year. Don Longano and Mel
Regs. issued on asset transfers to foreign corporations
The IRS on Monday issued final, temporary, and proposed regulations governing outbound asset transfers under Sec. 361. T.D. 9614 contains final regulations that apply to transfers of certain property (including stock and securities) by a domestic corporation to a foreign corporation in certain nonrecognition exchanges and to distributions of stock
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From The Tax Adviser
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Current developments in taxation of individuals: Part 1
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