The IRS announced on Tuesday that it is delaying 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 (T.D. 9564), which were to apply to tax years beginning on or after Jan. 1, 2012.
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Tax
Failure to enact AMT patch could push start of tax season to March for millions, IRS warns
As the end of the year approaches, media attention is focused on the “fiscal cliff,” but a much more immediate result of Congress’s inaction threatens the 2013 filing season: the alternative minimum tax (AMT) patch, which expired at the end of 2011. The IRS warns that the start of tax
Hurricane Sandy victims can take hardship distributions, loans from retirement plans
The IRS on Friday announced that it will allow taxpayers who have been adversely affected by Hurricane Sandy to take hardship distributions or loans from their retirement plans (Announcement 2012-44). To qualify under the announcement, hardship distributions made on account of a hardship resulting from Hurricane Sandy must be made
Modernized e-File is improving, but IRS can’t retire legacy system yet
The Treasury Inspector General for Tax Administration (TIGTA) on Wednesday reported on the IRS’s progress in retiring its Legacy e-File system and moving to the Modernized e-File (MeF) system (TIGTA Rep’t No. 2012-20-121). The IRS started to phase out the legacy system in 2004 with the introduction of an internet-based
How can the nonpayment testing period for COD income be improved?
In Notice 2012-65, the IRS asked for public comments on whether it should amend existing Regs. Secs. 1.6050P-1(b)(2)(i)(H) and (iv), which require applicable financial entities to issue Forms 1099-C reporting cancellation of debt (COD) income when a 36-month nonpayment testing period has expired. Under Sec. 6050P and its regulations, COD
Obama can’t expect a “fiscal honeymoon” in second term, Fitch says
Newly reelected President Barack Obama and Congress need to quickly come to an agreement on how to avoid the so-called “fiscal cliff” and raise the government’s debt ceiling, if the nation wants to avoid another recession, Fitch Ratings said Wednesday. “The economic policy challenge facing the president is to put
Leave-based donation programs allowed for Hurricane Sandy relief
In response to the extraordinary damage caused by Hurricane Sandy and the extreme need for relief, the IRS has released guidance for employers who are considering adopting leave-based donation programs to aid the storm’s victims (Notice 2012-69). A leave-based donation program allows employees to forgo vacation, sick, or personal leave
One-time abatement of $5,000 frivolous filing penalty announced
Taxpayers who have filed all required tax returns and paid all outstanding tax liabilities, including penalties (except for the Sec. 6702 penalty) and related interest, may qualify for a one-time reduction to $500 of any unpaid penalties that the IRS has assessed (Rev. Proc. 2012-43). Under Sec. 6702, a $5,000
IRS extends deadlines, provides relief for Hurricane Sandy victims
Late on Friday, the IRS announced various tax relief measures for individuals and businesses affected by Hurricane Sandy in Connecticut, New Jersey, and New York (e-News for Tax Professionals No. 2012-44). The relief applies to taxpayers in areas in those states declared a disaster area by the Federal Emergency Management
S.C. taxpayers’ Social Security numbers, credit cards hacked
The South Carolina Department of Revenue is providing affected taxpayers a year of credit monitoring after a hacker stole information including 3.6 million Social Security numbers and 387,000 credit and debit card numbers from its computer systems. State revenue officials announced Friday that the S.C. Division of Information Technology learned
TIGTA: IRS unable to detect ITIN fraud; AICPA urges changes
IRS management created an atmosphere that discourages tax examiners from identifying potentially fraudulent applications for individual taxpayer identification numbers (ITINs), the Treasury Inspector General for Tax Administration reported in August (TIGTA Rep’t No. 2012-42-081). ITINs allow individuals who are not eligible for Social Security numbers to obtain an identification number for
Schedule UTP: The early returns are in
The first two years of corporate income tax returns requiring Form 1120, Schedule UTP, Uncertain Tax Position Statement, have been filed, and the IRS has described first-year returns and provided guidance for the growing number of business taxpayers that will be required to file it. Schedule UTP was a required
Facing the tax cliff
You can’t pick up a newspaper or go online this fall without seeing stories about the coming “tax cliff” or “taxmageddon”—the time at the end of this year when the current tax rates for income, capital gains, gifts, and estates are scheduled to expire. Mostly overlooked by the news media
TIGTA: Appeals errors persist
The IRS Office of Appeals continues to make errors in classifying hearings and determining the statute of limitation on collections, the Treasury Inspector General for Tax Administration reported (TIGTA Rep’t No. 2012-10-077). The audit and report, required annually by statute, indicates that, based on statistical samples studied, the potential number
Charitable contributions of vehicles
Your clients may ask about donating used vehicles to charitable organizations. Donating a car is a good way to get a tax deduction, but increased scrutiny by the IRS means taxpayers need to have a good understanding of the rules related to the items claimed on their return. Clients should
Corporation cannot deduct California business privilege tax in year paid
Banking corporation Wells Fargo, an accrual-basis taxpayer, could not deduct the California business privilege tax it paid in one year (year 1) for the privilege of doing business the next year (year 2), even though California law had since 1972 treated the tax as being incurred in year 1, a
What is an item of property?
The Tax Court held the IRS properly recharacterized income generated from the rental of semi truck tractors and trailers as nonpassive under the self-rental rule, since each tractor or trailer was considered an item of property under Regs. Sec. 1.469-2(f)(6). Generally, taxpayers’ passive losses are currently deductible only to the
Proposed amendments would change apportionment rules
The Multistate Tax Commission is considering significant changes to the rules that govern how multistate businesses are taxed. The goal of the proposed amendments is to modernize the Multistate Tax Compact so it conforms to shifting tax policy preferences and changes in the world economy. All but three states (Delaware,
IRS wins again on appeal of rehabilitation credit
In the IRS’s second successful appeal of historic rehabilitation credits for private investors in public projects, the Third Circuit reversed and remanded the Tax Court’s decision in Historic Boardwalk Hall LLC. The IRS victory follows earlier success in Virginia Historic Tax Credit Fund, 639 F.3d 129 (4th Cir. 2011). Prior
IRS delays Oct. 31 deadlines for taxpayers and preparers affected by Hurricane Sandy
On Wednesday, the IRS announced it is granting taxpayers and tax preparers affected by Hurricane Sandy until Nov. 7 to file returns and accompanying payments normally due on Oct. 31 (IR-2012-82).The relief applies to taxpayers and tax preparers in an area affected by Hurricane Sandy or otherwise affected by the
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From The Tax Adviser
March 31, 2026
Current developments in taxation of individuals: Part 1
March 31, 2026
Current Developments in Taxation of Individuals: Part 1
March 6, 2026
