On Friday, the IRS said it was delaying for six months some of the deadlines for implementing the Foreign Account Tax Compliance Act (FATCA) originally set out in the final regulations issued in April in T.D. 9610 (Notice 2013-43). The regulations, which provide rules on information reporting by foreign financial
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IRS provides details about postponed employer health care penalty and information reporting
On Tuesday, the IRS made official the postponement of the large-employer health care penalty and certain information reporting rules that had been informally announced July 2 on a Treasury Department blog. Notice 2013-45 postpones the information reporting rules under Secs. 6055 and 6056 and the Sec. 4980H shared responsibility penalty
Professional poker player goes bust in Tax Court
A professional poker player who was also a civil and geotechnical engineer and a laundromat owner lost in Tax Court on Monday (Hom, T.C. Memo. 2013-163). The court held that John Hom received unreported wages from his wholly owned C corporation, could not deduct unsubstantiated gambling losses or travel expenses,
Final rules on acceleration of COD income deferral are issued
The IRS on Tuesday issued final regulations on the rules to accelerate cancellation of debt (COD) income that taxpayers elected to defer over a five-year period when an applicable debt instrument was reacquired by the issuer or a related party in 2009 or 2010 (T.D. 9622 and T.D. 9623). An
Treasury postpones employer health care penalty, information reporting for one year
Large employers that fail to provide minimum health coverage for employees will not be subject to the shared-responsibility penalty until 2015 after Treasury announced on Tuesday that it would delay certain provisions of 2010’s health care legislation. In a Treasury blog post titled, “Continuing to Implement the ACA in a Careful,
IRS offers new method for home office deductions
Working at home has come a long way from the days when employers were most concerned that they would not get their money’s worth if they allowed employees to do so. Instant communication, improved internet access, and more stable virtual network connections have changed the equation for employers, who now
IRS finds widespread noncompliance by colleges and universities
The IRS published its final report concerning its Colleges and Universities Compliance Project, finding compliance issues related to unrelated business taxable income (UBTI) and compensation practices. The IRS conducted the study to find out why colleges and universities had so much unrelated business activity but owed so little tax and
PFP Q&A: Planning for change
With the Baby Boomer generation hitting retirement age, personal financial planning has become an increasingly important service for many accounting firms. But practitioners are dealing with plenty of changes, including the implementation of new tax laws and the landmark rollout of new standards. The JofA assembled a team of industry
Salary was partially reasonable
Relying on standards set by the Ninth Circuit, the Tax Court found that a sole shareholder’s compensation from a wholly owned corporation for the year in question was partially deductible as reasonable compensation. The deductible compensation included catch-up payments for prior years’ services. Arthur Astor was the president and CFO
Basis reporting for debt instruments and options is phased in
In final regulations (T.D. 9616), the IRS is phasing in basis reporting requirements under Sec. 6045(g) for debt instruments and options. The IRS took the action in response to comments about the complexity of complying with these rules and to give brokers ample time to develop and implement reporting systems.
Voluntary Classification Settlement Program
Determining proper classification of workers, either as independent contractors or employees, can be a subjective challenge for employers. The determination of whether a worker is an employee or an independent contractor is based on the facts and circumstances surrounding the individual’s work for the employer. Generally, the more the employer
Requesting a first-time abatement penalty waiver
The IRS’s first-time abatement (FTA) penalty waiver, although introduced 12 years ago, remains little known and often unrequested by qualifying taxpayers. It allows a first-time noncompliant taxpayer to request abatement of certain penalties for a single tax period. Individual taxpayers may request an FTA of a failure-to-file or failure-to-pay penalty.
Proposed rules address minimum value of health coverage for premium tax credits
The IRS issued proposed regulations for determining whether an eligible employer-sponsored health plan provides minimum value for purposes of the Sec. 36B health insurance premium tax credit (REG-125398-12). Individuals do not receive the credit if they are eligible for affordable coverage under an eligible employer-sponsored plan that provides minimum value.
Highlights of tax research
With tax reform in the news, it is helpful to understand the origins of some popular and long-lived tax incentives, such as the favorable tax treatment of people over 65 and tax incentives that encourage people to save. As the economy takes fitful steps to recover, insight into the efficacy
GAO: Foreign account “quiet disclosures” may be much higher than detected
More than 10,000 taxpayers showed signs of having avoided offshore penalties by making “quiet disclosures” of foreign bank accounts for tax years 2003 through 2008, the U.S. Government Accountability Office (GAO) reported, a period for which the IRS has detected several hundred quiet disclosures. Filing data also suggest many more
IRS issues guidance on minimum essential health coverage, shared-responsibility penalty
In anticipation of the full implementation of health care reform next year, on Wednesday the IRS issued two notices. The first notice defines minimum essential coverage under certain government health plans and other coverage designated as minimum essential coverage for purposes of the Sec. 36B premium tax credit (Notice 2013-41).
Supreme Court strikes down Defense of Marriage Act in estate tax case
The Supreme Court on Wednesday, in a 5–4 decision written by Justice Anthony Kennedy, ruled that the Defense of Marriage Act (DOMA), P.L. 104-199, is unconstitutional because it violates the Fifth Amendment’s Due Process Clause by denying equal protection to same-sex couples who are lawfully married in their states (Windsor,
Interim IRS chief issues initial report on Sec. 501(c)(4) controversy
On Monday, acting IRS commissioner Daniel Werfel issued his report, Charting a Path Forward at the IRS: Initial Assessment and Plan of Action, on the plans to reform the IRS to avoid inappropriate targeting of taxpayers applying for Sec. 501(c)(4) social welfare organization status. In the first section of the
15 policies for sound not-for-profit governance
CPAs nodded their heads in sympathy as stories of governance mistakes were told during a session at the AICPA Not-for-Profit Industry Conference in Washington on Thursday. One organization accepted a gift of a cattle ranch that had nothing to do with its mission, creating huge administrative headaches. Another organization did
IRS controversy could cause tax-exempt processing slowdown
CPAs need to be prepared for a slowdown in certain work handled by the IRS Exempt Organizations Division in the wake of the recent controversy involving the processing of certain applications for tax exemption under Sec. 501(c)(4), the division’s former head said Thursday. “Probably the whole system is frozen in
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