The IRS postponed for a year the effective date of the backup withholding requirement for payments in settlement of payment card and third-party network transactions. The Service also created an FAQ page explaining the new requirements. The postponement, in Notice 2011-88, applies to transactions subject to reporting under Sec. 6050W
Advertisement
TOPICS
Tax
House Passes Repeal of 3% Withholding on Government Contracts
The House of Representatives passed a bill Wednesday to repeal a law that beginning in 2013 requires tax withholding of 3% of payments to vendors and contractors providing services to federal, state and local governments and their agencies. The bill, HR 674, passed by a vote of 405-16 and now
Final Regs Clarify Excise, Employment Tax Treatment of Disregarded Entities
The IRS issued final regulations (T.D. 9553) Tuesday clarifying the treatment of disregarded entities with respect to employment and certain excise taxes. The rules adopt proposed regulations issued in 2009 (REG-116614-08). Under Regs. Sec. 301.7701-2(a), business entities with a single owner may be disregarded as an entity separate from their
IRS Proposes Eliminating De Minimis Partner Rule
The IRS issued proposed regulations on Monday that, if finalized, would remove the de minimis partner rule in Regs. Sec. 1.704-1(b)(2)(iii)(e) (REG-109564-10). Sec. 704(b) allows a partnership to make special allocations as long as they have substantial economic effect. In 2008, the IRS issued final regulations under Sec. 704(b) that
President Signs Bill Increasing EITC Due Diligence Penalty
President Barack Obama signed into law Friday a trade agreement with South Korea (HR 3080) that increases from $100 to $500 the Sec. 6695(g) penalty for failure by preparers to exercise due diligence with respect to the earned income tax credit (EITC). Under another provision of the agreement, the IRS
PTIN System Opens for 2012 Renewals
The IRS on Thursday announced that it has opened its preparer tax identification number (PTIN) registration system to accept renewals for the 2012 filing season (IR-2011-105). Preparers are required to renew their PTINs annually and must do so before Jan. 1, 2012. Among the changes this year, CPAs will be
Inflation Adjustments Made to Many Tax Items for 2012
The IRS released on Thursday its annual revenue procedure making inflation adjustments to the income tax tables and many tax credits and other items for tax years beginning in 2012 (Rev. Proc. 2011-52). Separately on Thursday, the IRS announced the 2012 contribution limits and other figures for pension plans and
Final Regulations Eliminate “Hot Stock” Rule for Certain Reorganizations
On Wednesday, the IRS issued final regulations that generally hold that the so-called “hot stock” rule is inapplicable in reorganizations where a subsidiary is a member of the distributing corporation’s separate affiliated group (DSAG) (T.D. 9548). The regulations finalize without change rules that were issued as temporary and proposed regulations
Estate Tax Protective Claim Procedures Detailed
The IRS issued guidance Friday on filing a protective claim for refund of estate tax and notifying the IRS that the claim is ready for consideration. The guidance, in Rev. Proc. 2011-48, provides details on who may file a protective claim, methods by which the claim must be prepared and
Trade Bills Pass Congress With Tax Provisions
A tax preparer penalty relating to the earned income tax credit (EITC) will increase to $500, and the IRS will receive detailed information about federal and state prison inmates, both measures in a trio of foreign trade agreements Congress passed Wednesday. The trade deals with South Korea, Colombia and Panama
TIGTA Finds Problems With IRS Purchase Cards, Network Security
The Treasury Inspector General for Tax Administration (TIGTA) released a pair of reports on Tuesday finding problems with the security of the IRS Windows environment and a lack of control over IRS purchase cards (TIGTA Reports 2011-20-111 and 2011-10-075, respectively). Purchase Cards In Report 2011-10-075, TIGTA states that between Sept.
Practitioners Raise Concerns About Fingerprinting Proposal at IRS Hearing
The IRS heard a consistent chorus at a hearing Friday on proposed fees (REG-116284-11) for fingerprinting of registered tax return preparers and nonsigning staff at CPA firms: The IRS’ proposal is duplicative, expensive and can be done in a better way. The fees, estimated to cost $60 to $90 per
IRS Proposes Stiffer Preparer Requirements for EITCs
The IRS issued proposed regulations Thursday (REG-140280-09) that would impose new requirements for tax return preparers and their firms for returns claiming the earned income tax credit (EITC), including submission of information regarding taxpayers’ eligibility to the IRS. The EITC provides a refundable credit to eligible taxpayers, and it has
2011 Tax Research Service Survey
CPA tax preparers’ attitudes toward their tax research services in some respects reflect a universal quandary of the Information Age: They’re pleased to have so much material at their fingertips, but despite modern aids such as keyword searching, are still often frustrated in tracking down a particular desired bit of
Act Public Before Going Public
After several years of increasing numbers of U.S. companies making initial public stock offerings, starting in late summer 2011, some companies postponed going public as economic and market conditions grew turbulent and uncertain. But even a holding pattern might have some advantages if companies use that time to better prepare
Medical Deduction Allowed for In-Home Personal Care
The Tax Court held that payments made to an elderly woman’s providers of personal care that she required due to her diminished capacity qualified as long-term-care services and were therefore deductible under IRC § 213(d)(1)(C). Lillian Baral was diagnosed with dementia by her physician in 2004. After she was hospitalized
Regs Shut Down Artificially Generated FTCs
The IRS issued final, temporary and proposed regulations providing guidance on determining the amount of taxes paid for purposes of determining the foreign tax credit. The regulations are designed to curb certain transactions that the IRS says “produce inappropriate foreign tax credit results.” The final regulations (TD 9535), issued July
Roth Restructure “Too Good to Be True”
The Tax Court held on July 5 that the IRS properly assessed excise tax on a taxpayer’s excess contribution to a Roth IRA, since the attempted tax-free conversion of a regular IRA to a Roth IRA lacked economic substance. In addition, the court held that the taxpayer was subject to
Business Autos and 100% Bonus Depreciation
Practitioners who are helping clients decide whether to take advantage of the new 100% bonus depreciation provision should be aware of how it affects depreciation of business automobiles. The Code section allowing bonus depreciation (IRC § 168(k)(1)) says that the adjusted basis of qualified property must be reduced by the
SE Tax and Sporadic Activity
A common issue for taxpayers and their CPA return preparers is whether an activity for which the taxpayer received compensation during the tax year constitutes self-employment for purposes of self-employment tax. The answer can make a big difference in tax liability, since self-employment tax amounts to 15.3% of net self-employment
Features
SPONSORED REPORT
How to find the right CAS clients
The key to success with CAS is selecting the best clients. Tools like ideal client profiles (ICPs), buyer personas, and even artificial intelligence can help identify the businesses that best fit each CAS practice.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
Hedge funds: Tax structuring, planning, and compliance
March 31, 2026
Current developments in taxation of individuals: Part 1
March 31, 2026
