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
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Tax
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
Documenting charitable contributions
At this time of year, many charities see an upsurge in donations, and the federal tax deduction for charitable contributions is a significant incentive. The Tax Court recently highlighted how an apparently slight oversight in documentation can upend the interdependent relationship between donee and donor. General Substantiation Requirements The substantiation
Spousal payments are not child support
The Tax Court held that spousal support payments received by a taxpayer from her ex-husband prior to the fourth and final support reduction were alimony payments, not child support, since the final reduction was not clearly associated with a contingency related to a child. Generally, cash payments received by a
Covered opinion rules would be eased
The IRS released proposed regulations that would eliminate the complex rules in Circular 230, Section 10.35, governing covered opinions (REG-138367-06). To replace them, the proposed regulations would expand the requirements for written advice under Circular 230, Section 10.37. The IRS notes in the preamble to the proposed regulations that “[y]ears
Online travel companies not liable for occupancy taxes
The Sixth Circuit affirmed a district court’s judgment in favor of defendant online travel companies (OTCs) for alleged violations of local tax laws. The district court had held that the OTCs were not liable for collecting occupancy taxes. It is common practice for OTCs such as Priceline.com, Expedia, and Travelocity
Managing public PTIN information
Once the IRS began requiring tax return preparers to register and obtain preparer tax identification numbers (PTINs), third parties began requesting their registration information because much of the information was subject to public release under the Freedom of Information Act (FOIA). These third parties have in some cases published this
Income from partnership is self-employment income where taxpayer chose not to be a partner
The Eleventh Circuit Court of Appeals held that payments a taxpayer received from a nursing home business were taxable self-employment income despite the taxpayer’s convoluted attempts to characterize them as partnership distributions (Plotkin, No. 12-10620 (11th Cir. 11/27/12), aff’g T.C. Memo. 2011-260). The taxpayer operated nursing homes through various partnerships
New ITIN procedures issued for 2013 filing season
As the IRS promised when it issued the strict new individual taxpayer identification number (ITIN) procedures earlier this year, it has issued slightly easier procedures, effective Jan. 1, 2013, for the 2013 filing season (FS-2012-11). While some requirements have been eased slightly, others have been made more stringent. The IRS
Rev. proc. updates guidance on adequate disclosure of return positions
The IRS released its annual update identifying when a taxpayer’s disclosure of an item or position in an income tax return is adequate for purposes of reducing the understatement of tax penalty and the tax return preparer penalty for understatement due to unreasonable positions (Rev. Proc. 2012-51). Rev. Proc. 2012-51
Standard mileage rates go up a penny in 2013
Optional standard mileage rates for use of a vehicle will go up by 1 cent per mile for 2013, the IRS said Wednesday (Notice 2012-72). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile. For business use of a car, van, pickup
Effective date of tangible property regs. delayed
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.
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
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