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All 2012 tax returns can now be filed with IRS

The IRS on Monday announced that it finished updating its processing systems and is now accepting all returns that include the 29 forms that were delayed by the late passage of the American Taxpayer Relief Act of 2012, P.L. 112-240. On Sunday, the IRS began accepting from e-file transmitters returns

The benefits of captive insurance companies

For many years, large corporations in this country have enjoyed many benefits from operating their own captive insurance companies. Most were established to provide coverage where insurance was unavailable or unreasonably priced. These insurance subsidiaries or affiliates were often domiciled offshore, especially in Bermuda or the Cayman Islands. The risk

Rules on use, disclosure of taxpayer information finalized

The IRS 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 REG-131028-09). The

The basic framework of cross-border taxation

U.S. citizens are taxable on their worldwide income, with a credit or deduction for taxes paid on foreign income. The United States makes no distinction between earnings from business or investment activities within the United States and those outside its borders. Tax laws governing cross-border transactions are both arcane and

IRS regulation of tax return preparers struck down

A U.S. district court ruled that the IRS’s registered tax return preparer program exceeds its statutory authority and enjoined it from enforcing the regulations (Loving, No. 12-385 (D.D.C. 1/18/13)). In 2011 the IRS issued final regulations (T.D. 9527) making unenrolled return preparers (i.e., return preparers who are not CPAs, attorneys,

Donating and sharing paid time off

Hurricane Sandy highlighted the role of programs that allow employees to donate the value of their unused paid time off (PTO) from work or share it with fellow employees. Following are the main types of programs and their tax treatment. Standard PTO Charitable Donation Programs In this type of program,

Mandatory language for consents to disclose, use taxpayer information modified

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

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

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