The U.S. Supreme Court issued a decision Tuesday holding that a conviction under Sec. 7206 for willfully filing a false tax return (or for aiding and abetting filing a false tax return) is an aggravated felony that can result in deportation. Kawashima v. Holder, S. Ct. Dkt. No. 10-577 (U.S.
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Budget proposal includes change to treatment of intentionally defective trusts
Among the various estate tax proposals in President Barack Obama’s recently released fiscal year 2013 revenue proposals is a new plan that could alter estate planning techniques and benefits with intentionally defective grantor trusts (IDGTs); the assets in these trusts would be included in the estate of the grantor at
Congress passes payroll tax cut extension
On Friday, the House of Representatives and the Senate both passed a bill that will extend the reduced 4.2% Social Security tax rate through the end of the year (The Middle Class Tax Relief and Job Creation Act of 2012, H.R. 3630). The vote was 293–132 in the House and
Portability election extended for some estates
Some executors who missed a deadline to apply a decedent’s unused estate and gift tax exclusion amount to a surviving spouse received an extension Friday. The IRS announced the extension in Notice 2012-21. It applies to estates of decedents dying in the first six months after provisions for “portability” of
FinCEN once again extends FBAR filing deadline for certain financial professionals
The Financial Crimes Enforcement Network (FinCEN) announced a further extension of the deadline for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to June 30, 2013, for a small group of financial professionals (FinCEN Notice 2012-1). In 2011, FinCEN announced that three small groups of
IRS proposes PTIN regs. for supervised, nonsigning and non-1040 preparers
The IRS issued proposed regulations on Tuesday regarding the availability of preparer tax identification numbers (PTINs) for supervised nonsigning preparers and for preparers of forms other than Form 1040. They also address what tax forms are considered returns for purposes of the PTIN rules (REG-124791-11). The proposed regulations do not
Partnerships can issue Schedules K-1 electronically
The IRS issued Rev. Proc. 2012-17, which contains rules partnerships must follow if they want to supply Schedules K-1, Partner’s Share of Income, Deductions, Credits, etc., electronically. The guidance is effective Feb. 13, 2012. Failure to furnish the Schedule K-1 as required in Rev. Proc. 2012-17 can be deemed a
President’s budget proposes AMT elimination, tax reform
President Barack Obama unveiled his proposed budget for fiscal year 2013 on Monday. Included in its 256 pages are several tax reform proposals, including plans to eliminate the alternative minimum tax (AMT), to repeal LIFO, and to tax dividends of high-income taxpayers at ordinary income rates. The budget estimates that
Foreign tax credit regs. on splitter arrangements and determining who is liable for foreign tax
Late Thursday, the IRS issued final regulations on determining who has the legal liability to pay the foreign tax for foreign tax credit purposes (T.D. 9576) and temporary regulations on the application of the “anti-splitter” rules of Sec. 909 (T.D. 9577). The rules are related because the legal liability to
Employer health coverage questions addressed
The IRS and Treasury Department, along with two other federal departments, on Thursday further described planned guidance on provisions for employer-sponsored health coverage mandated by the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, scheduled to take effect in 2014. Treasury and the IRS issued Notice 2012-17 covering frequently
Guidance issued on work opportunity credit for veterans
The IRS issued a notice on Thursday that gives employers guidance on two new tax credits for qualified veterans and provides extra time to comply with some of the credits’ requirements (Notice 2012-13). The Three Percent Withholding Repeal and Job Creation Act, P.L. 112-56, extended the work opportunity tax credit
Proposed FATCA regs. take comprehensive approach to foreign financial institution reporting
The IRS on Wednesday issued proposed regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities (REG-121647-10). Under the Foreign Account Tax Compliance Act of 2009 (FATCA), part of the Hiring Incentives to Restore Employment (HIRE) Act of
TIGTA: Revise Form 1099-R to improve taxpayer compliance
In a report released on Tuesday, the Treasury Inspector General for Tax Administration (TIGTA) recommended the IRS change its Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to improve taxpayer compliance with reporting and paying tax on this type of income (TIGTA, Opportunities Exist
Couples who filed joint returns must now file separate powers of attorney
Starting March 1, the IRS will no longer accept old versions of Form 2848, Power of Attorney and Declaration of Representative, and will accept only the version released in October 2011. The new version of the form requires a husband and wife who filed a joint tax return to each
IRS, Labor Department proposals aim to increase retirement options and transparency
Federal initiatives designed to broaden options and increase transparency in retirement plans were announced Thursday. The IRS issued proposed regulations that would make it easier for defined benefit pension plans to offer combinations of lifetime income and single-sum cash payments (REG-110980-10). Other proposed regulations released on Thursday would relax the
Prop. regs would ease required minimum distribution rules for older retirees who purchase certain annuities
The IRS issued proposed rules (REG-115809-11) that would permit IRA participants to enter into contracts for annuities that begin at an advanced age (often called longevity annuities), using a certain amount of their account balances without having these amounts count for calculating required minimum distributions from the IRAs under Regs.
Individuals who are eligible for medical services at IHS facilities may still participate in HSAs
The IRS on Wednesday explained that people who are eligible to receive medical services at Indian Health Service (IHS) facilities are not automatically disqualified from making tax-free contributions to health savings accounts (HSAs) (Notice 2012-14). Under Sec. 223(c)(1), an eligible individual for HSA purposes is, for any month, an individual
Help clients choose the right charities
Many nonprofits operate with tight resources, and some are struggling to survive in the slow economy. Here are ways to determine if the charities your clients support are effectively governed, accountable and fiscally responsible. —By Betsy Brill (betsy@stratphilanthropy.com), MBA, founder and president, and Susan Winer (susan@stratphilanthropy.com), senior vice president–Business, both
Grantor retained interests clarified
The IRS issued final regulations providing guidance on the portion of property (held in trust or otherwise) includible in a grantor’s gross estate if the grantor has retained the use of the property or the right to an annuity, unitrust, graduated retained interest or other payment from the property for
Congress repeals 3% withholding, enacts worker credit for veterans
On Nov. 21, President Barack Obama signed into law an act (P.L. 112-56) that repeals a 3% government contractor withholding requirement. The act removes Sec. 3402(t), which required withholding of 3% of payments by the federal or state governments or their instrumentalities or subdivisions (including multistate agencies) to any person
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