In Rev. Proc. 2013-14, the IRS provided guidance to tax return preparers about the format and content of taxpayer consents to disclose and consents to use tax return information and modified the mandatory language required on each taxpayer consent. The guidance applies to individuals filing a return in the Form
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Tax
Home Concrete decision offers limited guidance
In its Home Concrete decision last year, the Supreme Court limited the ability of Treasury, through regulations, to define the meaning of “omits from gross income” differently than the Court had previously construed. But due to plurality and concurring decisions with different analyses, only limited inferences can be made as to how
File now or file later
The U.S. District Court for the District of Massachusetts held that an estate was liable for a late filing penalty since its reliance on an accountant’s advice to file a late estate tax return rather than a timely estimated return was not reasonable cause for filing the return after the
Voluntary Classification Settlement Program expanded
The IRS significantly modified its Voluntary Classification Settlement Program (VCSP). In Announcement 2012-46, in effect until June 30, 2013, the IRS is temporarily permitting employers who have not filed Forms 1099 for their workers to participate in the program by paying a larger amount of past-due tax than under the
Proving fraud proves difficult for IRS
The Tax Court determined that the IRS was time-barred from assessing tax against the owner of several bankrupt entities for all but the last of several years at issue. Aside from the one year for which the taxpayer consented to extend the limitation period, the assessments were all outside the
Stockpiled delayed returns to be accepted on Sunday, online filing to start next week
Late Wednesday, the IRS announced that it will begin accepting from e-file transmitters stockpiled returns containing the 29 forms for which acceptance was delayed beginning on Sunday, March 3, at 7 a.m. ET (Quick Alerts for Tax Professionals (2/27/13)). E-file transmitters have been holding returns submitted with the delayed forms
Acting commissioner outlines IRS plans for sequestration
With mandatory government spending cuts looming, Acting IRS Commissioner Steven Miller sent a memo to all IRS employees on Thursday, outlining the agency’s plans in the event sequestration occurs as planned on Friday. He outlined spending cuts the IRS plans to make, including employee furloughs, but emphasized that the furloughs
2013 automobile depreciation limits released
The IRS on Monday issued the 2013 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F (Rev. Proc. 2013-21). For passenger automobiles (other than trucks or vans) placed in service during calendar year 2013 to which 50% first-year bonus depreciation applies, the depreciation
IRS appeals decision striking down tax return preparer registration program
The IRS on Wednesday filed a Notice of Appeal to the United States Court of Appeals for the District of Columbia Circuit of the Jan. 18 district court decision that struck down the IRS’s registered tax return preparer program and enjoined it from enforcing the regulations (Loving, No. 1:12-cv-00385-JEB (D.D.C)
AICPA raises concerns about delayed, compressed tax season
Jeffrey Porter, chair of the AICPA’s Tax Executive Committee, sent a letter to Steven Miller, acting commissioner of the IRS, on Friday raising concerns about the “very compressed and difficult filing season” AICPA members and their clients are facing, due to the ongoing delays in the IRS’s acceptance of certain
U.S. and Switzerland sign FATCA agreement
The Treasury Department announced on Thursday that the United States and Switzerland have signed a bilateral agreement to implement provisions of the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted by Congress in 2010 as part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147. It
IRS issues annual whistleblower report to Congress
On Wednesday, the IRS issued its annual report on the whistleblower program, reporting the program’s results for the 2012 fiscal year (FY) and legislative and administrative recommendations for improving the program. Under Sec. 7623(b), which was amended in 2006, the IRS is required to pay awards of specified percentages of
Depreciation and education credit forms can soon be filed with the IRS
The IRS announced on Friday that it will soon be able to accept tax returns that include Form 4562, Depreciation and Amortization, and/or Form 8863, Education Credits (IR-2013-18). The IRS will start processing returns with Form 4562 on Sunday, Feb. 10, and will start processing returns with Form 8863 on
IRS postpones effective date of new procedures for consents to disclose
Rev. Proc. 2013-19, issued Wednesday, delays the date that taxpayer consents to disclose and consents to use tax return information must contain the mandatory language recently issued in Rev. Proc. 2013-14. The original effective date of Jan. 14, 2013, has been moved back to Jan. 1, 2014. Taxpayer consents to
Long-awaited final regs. issued on noncompensatory partnership options
On Monday, the IRS issued regulations (T.D. 9612) finalizing proposed regulations (REG-103580-02), which were issued in January 2003, on the treatment of certain call options, warrants, convertible debt, and convertible equity that are not issued in connection with the performance of services, i.e., noncompensatory partnership options. The final regulations apply
FAF to review standard on accounting for income taxes
The Financial Accounting Foundation (FAF) has chosen a 1992 standard focusing on accounting for income taxes as the subject of its next post-implementation review. FASB Statement No. 109, Accounting for Income Taxes, establishes standards for reporting the effects of income taxes in an organization’s financial statements. The standard is mostly
Court upholds injunction; IRS reopens PTIN system
The IRS announced on its Return Preparer Office Facebook page on Saturday that it has reopened its preparer tax identification number (PTIN) system for new applications and renewals. The announcement follows a clarification from the district court that struck down the IRS’s return preparer registration program, saying that the injunction
Telecommunication tower leases not subject to self-rental passive income rule
The Tax Court determined that a taxpayer’s rental income from the lease of land and telecommunication towers to his wholly owned S corporation was not subject to the “self-rental rule” of Regs. Sec. 1.469-2(f)(6). Accordingly, the court held, the IRS’s recharacterization of the income as nonpassive was inappropriate. The court,
Don’t neglect to elect, part 4
As a fourth installment in an occasional series, here are additional tax elections for estates, partnerships, and individuals. ESTATES Election to treat a revocable trust as part of an estate. Sec. 645 allows for an election to treat a qualified revocable trust (QRT) as part of a decedent’s estate for
Estate’s settlement payments not deductible
The Tax Court recently held that an estate’s settlement payment to one of its beneficiaries was not deductible since the payment lacked adequate consideration and was consistent with the decedent’s wishes expressed in her will. When computing its taxable estate, an estate can deduct a claim against it that represents
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FROM THIS MONTH'S ISSUE
4 ways solo practitioners can stand out
Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
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Current developments in taxation of individuals: Part 2
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