The tax organizer files are starting to come in, the return preparation software is updated, and the staff has cleared its calendar for the long days and nights ahead. That’s right, it’s tax preparation season, and for 2012 returns, CPAs have much to consider that’s new. They may also have
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Tax
Whistleblower’s claim not entitled to Tax Court review
In a case of first impression, the Tax Court held that it could not order the IRS to reopen an individual’s whistleblower claim under Sec. 7623(b), and the court dismissed his petition. Sec. 7623(b) authorizes an award to a whistleblower if the IRS proceeds with any administrative or judicial action based
Avoiding allegations of improper tax advice
On the golf course, an older client mentions that he has pledged an endowment to his alma mater. Knowing the client does not need his IRA funds for retirement purposes, the CPA mentions that certain taxpayers can make distributions directly from their IRAs without the distribution being included in taxable
Nina Olson: Taxpayers’ voice at the IRS
Nina E. Olson is the IRS’s National Taxpayer Advocate. Since 2001, she has led the Taxpayer Advocate Service (TAS), a nationwide organization of approximately 2,000 taxpayer advocates who help U.S. individual and business taxpayers resolve problems and work with the IRS to correct systemic and procedural problems. In this capacity,
Mandatory language for consents to disclose, use taxpayer information modified
In Rev. Proc. 2013-14, the IRS has 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
Rules on use, disclosure of taxpayer information finalized
The IRS on Wednesday issued final regulations under Sec. 7216 that govern the circumstances in which tax return preparers can disclose or use certain limited tax return information (T.D. 9608). The regulations finalize with minor changes rules that were issued in 2010 as temporary and proposed regulations (T.D. 9478 and
Final regs. remove de minimis partner rule
The IRS issued final regulations that remove the de minimis partner rule from Regs. Sec. 1.704-1(b)(2)(iii)(e) (T.D. 9607). This means that when determining whether special allocations have substantial economic effect, partnerships will no longer be permitted to ignore the tax attributes of de minimis partners. The IRS received many suggestions
Sec. 304 anti-abuse, anti-avoidance rules finalized
In T.D. 9606, the IRS finalized regulations that apply to transactions subject to Sec. 304 but that are structured with the principal purpose of avoiding the statute’s application. The regulations target transactions designed to avoid Sec. 304 treatment of a corporation that controls an acquiring corporation or a deemed acquiring
Voluntary Classification Settlement Program expanded, liberalized
On Tuesday, the IRS made significant changes to 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
Proposed regs. provide rules for whistleblower awards
The IRS issued proposed regulations for whistleblower awards under Secs. 7623(a) and (b), as well as rules governing the disclosure of return information under Sec. 6103(h) to pursue these claims (REG-141066-09). The proposed regulations provide general rules for submitting information to the IRS, definitions of key terms, rules for administrative
Tangible property regs. amended to implement delayed effective date
On Friday, the IRS released technical amendments to T.D. 9564 that, in response to numerous comments from taxpayers, delay the effective date of the temporary regulations it issued in December 2011 governing whether tangible property expenses could be deducted or had to be capitalized. Those regulations were supposed to apply
Rules distinguishing tips from service charges delayed until 2014
In Announcement 2012-50, the IRS announced that businesses have additional time to make the changes needed to comply with the proper treatment of tips and service charges under Q&A-1 of Rev. Rul. 2012-18. Announcement 2012-25 previously delayed implementation to amounts paid on or after Jan. 1, 2013, and requested comments
Finance professionals: Fiscal cliff could sap U.S. economic growth
Finance professionals warn that U.S. economic growth is in jeopardy if budget issues cannot be resolved quickly, a survey released Monday by the Association for Financial Professionals (AFP) indicates. Respondents to the AFP Business Outlook Survey predict that U.S. GDP will grow 1.7% in 2013, creating an additional 1.3 million
Reportable transaction rules updated for certain losses
Rev. Proc. 2013-11, issued on Thursday, provides that certain losses are not taken into account in determining whether a transaction is a reportable transaction. Regs. Sec. 1.6011-4 requires taxpayers that participate in reportable transactions to disclose those transactions. One category of reportable transaction is a loss transaction, which is defined
IRS issues proposed regs. on 3.8% net investment income tax
On Monday, the IRS released proposed regulations governing the 3.8% net investment income tax imposed under Sec. 1411 that was added to the Code by the Health Care and Education Reconciliation Act of 2010, P.L. 111-152 (REG-130507-11). Taxpayers can rely on the proposed regulations for purposes of complying with the
Guidance issued on additional Medicare tax
The IRS issued proposed regulations concerning the 0.9% Medicare surtax, which takes effect next year (REG-130074-11). The proposed regulations contain guidance for employers and individuals on the implementation of the tax, including the requirement to file a return reporting the tax, the process for employers to make adjustments of underpayments
Per diem rates updated
The IRS 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 list
Year-end tax planning: Preparing for the tax cliff
Rarely has there been such a major difference between the laws in effect in one year and the next. The maximum income tax rates next year could be as high as 43.4% on ordinary income (44.6% if the potential impact of reinstated limitations on itemized deductions is taken into account)
No extended assessment period for innocent S shareholder
The Office of Chief Counsel (OCC) advised in Chief Counsel Advice (CCA) 201238026 that the assessment period is not extended for the personal tax liability of a shareholder who did not take part in the fraud reflected on his S corporation’s Form 1120S, U.S. Income Tax Return for an S
Instructions address portability election
The IRS posted revised instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, with guidance for electing the portability of a deceased spouse’s unused estate and gift tax exclusion amount. The instructions also address an executor’s use of a checkbox to opt out of electing portability of
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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
April 30, 2026
