As part of its ongoing initiative to regulate previously unenrolled tax return preparers, the IRS announced on Tuesday that competency testing for registered tax return preparers will start next week (IR-2011-111). The IRS announced that the fee for taking the competency test will be $116 ($27 of which is the
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Tax
President Signs Government Contractor Withholding Repeal, Veterans Job Credits
On Monday, President Barack Obama signed into law the Three Percent Withholding Repeal and Job Creation Act (H.R. 674), which Congress sent to him last week. The act repeals a requirement that 3% of payments be withheld by the federal or state governments or their instrumentalities or subdivisions (including multistate
Temporary Regs on All-Cash D Reorgs Issued
The IRS on Friday issued identical temporary and proposed regulations on basis allocation in all-cash D reorganizations (T.D. 9558; REG-101273-10). The regulations govern the determination of the basis of stock or securities in a corporate reorganization when the issuing corporation does not distribute any stock or securities in the reorganization.
IRS Reissues Alternative Valuation Date Proposed Regulations
The IRS issued new proposed regulations Thursday (REG-112196-07) on electing an alternate valuation date for an estate and withdrew earlier ones released in 2008. The proposed regulations as reissued would limit the ability of estates to use the alternate valuation method if the value of the estate declines after the
Congress Sends Repeal of 3% Government Contractor Withholding to President
Late on Wednesday, the House of Representatives passed a bill (H.R. 674) that will repeal a 3% government contractor withholding requirement. The vote was 422-0. The Senate approved the bill on Nov. 10, and it now goes to President Barack Obama for his signature. The bill repeals Sec. 3402(t), which
Witnesses Tell Congressional Subcommittee Small Business Health Tax Credit Is Too Complicated
A tax credit enacted to encourage small businesses and tax-exempt organizations to provide health insurance coverage for employees is too complicated and is not meeting its goal, witnesses told a congressional panel Tuesday. The credit, passed as part of the Patient Protection and Affordable Care Act, P.L. 111-148, in 2010,
Final Regs Issued on Debt Satisfied by a Partnership Interest
The IRS on Tuesday issued final regulations on the application of Sec. 108(e)(8) to partners and partnerships (T.D. 9557). The regulations provide rules for determining a partnership’s discharge of indebtedness (DOI) income when it transfers a partnership interest to a creditor to satisfy a partnership debt. The regulations also discuss
Senate Passes Amended Bill Repealing 3% Withholding on Government Contracts
The U.S. Senate on Thursday approved a bill (H.R. 674) to repeal 3% income tax withholding on payments to vendors by federal, state and local governments. The vote was 95-0, with one senator voting “present.” Immediately before the vote, the Senate added an amendment that would allow a tax credit
Final Regulations Govern Listed Transactions for GST Tax
The IRS issued final regulations on Thursday that add transactions that reduce or eliminate the generation-skipping transfer (GST) tax as listed transactions or transactions of interest and require the disclosure of those transactions under Sec. 6011 (T.D. 9556). The final regulations adopt without change proposed regulations issued in 2009 (REG-136563-07).
Shulman Announces Delay in Fingerprinting Requirement
The IRS will delay and reconsider its fingerprinting requirement for tax return preparers, IRS Commissioner Doug Shulman told the AICPA National Tax Conference on Tuesday. “We have decided to hold off fingerprinting while we consider issues that have been raised and have further discussions with interested parties,” Shulman said during
Final Regs Clarify Estate Tax Treatment of Grantor Retained Interests
The IRS issued final regulations providing guidance on the portion of property (held in trust or otherwise) includible in the 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
Employer Duties Regarding IRS Levies
When a taxpayer fails to satisfy his or her tax liabilities, the IRS has an array of administrative tools that it can call upon to obtain the taxpayer’s compliance. One method is levying the taxpayer’s wages at the source under Internal Revenue Code provisions that require employers to help the
Different Tax Results for Two Horse Breeders
The Tax Court recently allowed claimed losses from horse-breeding activities in one case but denied them in another. In the first case, the court held that the taxpayers could deduct all of the expenses of their horse-breeding activity, since they had a profit motive when they started and conducted the
Tax-Exempt Hospitals and New Reporting Requirements
The Patient Protection and Affordable Care Act of 2010 (PPACA) imposes reporting requirements under new IRC § 501(r) for charitable hospitals regarding the fulfillment of their charitable purpose as tax-exempt organizations. Specifically, if they have not already done so, these hospitals must complete a community health needs assessment and draft
Charitable Contributions of Conservation Easements
Charitable contributions of conservation easements allow taxpayers to obtain a federal tax benefit while helping to conserve land for public use or enjoyment or to preserve a historic structure. Through the use of these easements, ownership of land or a historic building is kept in private hands but with restrictions
Noncompete Agreement Is a Section 197 Intangible
The First Circuit Court of Appeals, affirming the Tax Court, held that a covenant not to compete must be amortized over 15 years rather than its one-year term. Recovery Group Inc. was an S corporation that provided services to insolvent companies. To buy out the interest of one of its
Health Care Premium Credit Rules Proposed
The IRS released proposed regulations in August (REG-131491-10) implementing the health insurance premium tax credit, which was enacted last year by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act and is effective starting in 2014. The proposed regulations were part of a “next
TIGTA: Resolution of Math Error Disputes Often Late, Sometimes Wrong
In taxpayer disputes over its correction of math errors on returns, the IRS was wrong 17% of the time and late in resolving disputes 40% of the time, the Treasury Inspector General for Tax Administration (TIGTA) found. IRC § 6213(b)(1) allows the IRS to adjust items on tax returns without
Short-Term Rentals Preclude Use of Losses
CPA tax practitioners who have clients involved in a real estate rental trade or business are no doubt aware of the rule allowing $25,000 of passive losses from rental real estate to be deducted against nonpassive income and the 750-hour material participation rule for qualifying as a real estate professional
Two Estate Tax Rulings Uphold IRS Regulatory Interpretations
In two recent estate tax cases, executors were denied timeliness-related claims, and although in both cases the executors said administrative failures by the IRS caused or contributed to the error, the courts said those lapses did not rise to the level of misconduct that would justify special treatment. In the
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4 ways solo practitioners can stand out
Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
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