The IRS released proposed regulations under Sec. 274 clarifying which party is subject to the Secs. 274(a) and (n) limit on deductions for meals and entertainment to 50% of the expenses incurred (REG-101812-07). As the IRS emphasized, only one party is intended to be subject to the limitation when multiple
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Tax
Tax Court’s denial of easement deduction deemed unreasonable
The First Circuit recently held that a Tax Court decision disallowing a couple’s deduction for a qualified conservation contribution of a facade easement was an unreasonable and overly restrictive interpretation of the extinguishment provision of Regs. Sec. 1.170A-14. The First Circuit viewed the Tax Court’s reading of the regulation as
TIGTA shines light on large tax delinquencies of federal government agencies
The Treasury Inspector General for Tax Administration (TIGTA) found that 70 federal agencies had unpaid employment taxes totaling $14 million, and 18 federal agencies were delinquent in filing 39 employment tax returns, as of Dec. 31, 2011, in a report issued Thursday (TIGTA Rep’t No. 2012-30-094). Although federal agencies are
Special per diem rates updated for 2012–2013
The IRS on Wednesday issued the annual update of special per diem rates for use in substantiating certain business expenses taxpayers incur when traveling away from home (Notice 2012-63). The notice provides the transportation industry meal and incidental expenses rates, the rate for the incidental-expenses-only deduction, and the rates and
Tax Court defines gross receipts for the research credit
The Tax Court on Monday clarified that nonsales income is included in gross receipts for purposes of the Sec. 41 research credit (Hewlett-Packard Co., 139 T.C. No. 8 (2012)). The Tax Court granted partial summary judgment to the IRS, holding that for purposes of calculating average annual gross receipts under
PTIN information release concerns aired
The AICPA has expressed concerns to the IRS about the Service’s public release of information of CPAs and other federal tax return preparers the IRS collects as part of its preparer tax identification number (PTIN) registration requirement. Some of the PTIN information is subject to public release under the federal
Draft instructions to Form 706 provide guidance on portability election
On Tuesday, the IRS posted a draft version of the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, a follow-up to the draft Form 706 that was posted in August (see “Draft Form 706 provides check box to not elect portability”). The draft instructions provide more guidance
U.S. attorneys are authorized to fight stolen identity refund fraud
In an effort to better combat crimes involving stolen identities and tax refund fraud, the Justice Department is changing the procedures it uses to handle such cases. Under Tax Division Directive No. 144, released on Wednesday, U.S. attorneys’ offices will no longer need prior authorization from the Justice Department’s Tax
Corporate equity reduction transaction guidance issued
The IRS issued proposed regulations governing the availability of net operating loss (NOL) deductions that are attributable to corporate equity reduction transactions (CERTs) under Secs. 172(b)(1)(E) and (h) (REG-140668-07). The CERT rules were enacted in response to the use of NOL carrybacks to finance leveraged buyout transactions and are intended
IRS proposes changes to Circular 230 rules governing written tax advice
On Friday, the IRS released proposed regulations that would eliminate the complex rules in Circular 230 governing covered opinions (REG-138367-06). To replace the covered opinion rules, the proposed regulations would expand the requirements for written advice under Circular 230, Section 10.37. The proposed regulations would also make several other changes
AICPA urges Congress to quickly fix tax cliff
Congress must reach an agreement on expiring tax provisions as soon as possible because small businesses are being impeded from long-term tax and cash flow planning and prevented from making informed decisions. That is the message Jeffrey Porter, vice chair of the AICPA Tax Executive Committee, delivered to the House
Use of wrong delivery service results in dismissal of Tax Court petition
Taxpayers who chose the wrong type of FedEx delivery service did not get the benefit of the timely mailing/timely filing rule and as a result had their petition dismissed by the Tax Court (Scaggs, T.C. Memo. 2012-258). The taxpayers had filed a petition in Tax Court challenging an IRS notice
Employee health insurance safe harbors expanded
The IRS expanded and revised optional safe harbors on which applicable large employers may rely in complying with requirements starting in 2014 to provide health insurance coverage to their full-time employees. The safe harbors, described in Notice 2012-58 and previous notices, provide methods of determining the full-time status of seasonal
Accounting method changes to be allowed in corporate reorganizations
The IRS on Wednesday announced a change in its policy on automatic accounting method changes in corporate reorganizations (Rev. Proc. 2012-39). Taxpayers that engage in a tax-free reorganization or liquidation under Sec. 381(a) after Aug. 31, 2011, will be allowed to make automatic accounting method changes in the tax year
Proposed regs. issued on allocating Sec. 263A costs under simplified methods
The IRS issued proposed regulations that affect taxpayers who produce or resell property and allocate costs under the simplified production method or simplified resale method (REG-126770-06). The proposed rules would govern the taxpayers’ treatment of negative additional costs under those methods. Sec. 263A requires taxpayers to capitalize certain direct and
Taxpayer Advocate Service changes criteria for accepting cases
The Taxpayer Advocate Service (TAS) changed its criteria for accepting individual taxpayer cases for assistance, reducing the instances in which it will accept cases. The TAS said it took this action so that it can focus on cases “where we can add the most value.” In a notice to taxpayers
Statutory definition of notional principal contract extended further through 2013
The IRS announced that, in response to comments that the proposed effective date of regulations issued under Sec. 871(m) would not give taxpayers sufficient time to build and test the systems required to implement the rules, it was further extending the effective date until 2014 (Correction to T.D. 9572, 8/31/12).
2012 tax software survey: Individual product survey responses
In this year’s survey by the JofA and The Tax Adviser, more than 6,070 CPAs assessed the software they used to prepare 2011 tax returns, revealing what they liked and disliked about their software. The survey was conducted in May 2012. Overall, respondents were pleased with their software: On average,
IRS reviews whistleblower operations
The IRS is reviewing the operations of its Whistleblower Office to improve the timeliness and quality of its decisions on whistleblower claims, Deputy Commissioner for Services and Enforcement Steven T. Miller said in an internal IRS memo dated June 20. The review will yield a set of “expectations” for timely
Appeals Court invalidates associated-property regs.
In a case of first impression, the Court of Appeals for the Federal Circuit (reversing the Court of Federal Claims) held that the “associated property” rule requiring capitalization of interest expense under Sec. 263A was invalid insofar as it applies to property temporarily withdrawn from service. The question of the
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FROM THIS MONTH'S ISSUE
Flip out with the latest Tech Q&A
The September Technology Q&A column shows how to create dynamic to-do lists with Excel's checkboxes and also how to set up multifactor authentication texts that don't rely on phones. Flip through both items and view a video walkthrough in our digital format.
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