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Tax

Ninth Circuit Affirms Tax Court’s Jurisdiction to Redetermine Partnership Deficiency

In a Son-of-BOSS appeal, the Ninth Circuit Court of Appeals rejected a taxpayer’s two procedural arguments and upheld the Tax Court’s jurisdiction to redetermine the tax shelter participant’s deficiency. The petitioner, Michael Napoliello, entered into two pairs of offsetting long and short foreign currency option contracts held by an LLC

Offers in Compromise and Dissipated Assets

Under IRC Sec. 7122(a), taxpayers may request an offer in compromise (OIC) with the IRS to settle outstanding tax liabilities for less than the full amount owed. To qualify, taxpayers must prove that their outstanding tax liabilities exceed the amount of income and assets available to satisfy those liabilities during

IRS Clarifies Corporate Governance Questions for Tax-Exempt Organizations

The IRS believes that strong corporate governance leads to increased compliance for tax-exempt organizations. In 2008, the IRS released a redesigned Form 990, Return of Organization Exempt From Income Tax, which requires more comprehensive and in-depth information regarding the organization’s governance, structure, policies and disclosure practices. These changes were formalized

Adjunct Professor Ruled an Employee

The Tax Court held that an adjunct university professor was a common-law employee and not a statutory employee or independent contractor, since he exercised only limited control over his course curriculum and materials and the university considered him its employee. William Schramm was an adjunct professor at Nova Southeastern University

ProSystem fx Tips

With tax season just around the corner, here are a few tips for using CCH’s ProSystem fx Tax (Foundation). ProSystem fx was the most-used software among the 10,026 respondents in the 2011 tax software survey conducted by the JofA and The Tax Adviser (see tinyurl.com/42o9h5s). 1. Tax cross-referencing. Pressing F1

Advising Clients in Same-Sex Relationships

Even as the debate over legally recognizing same-sex relationships continues, many such unions are being created in which income, expenses, assets and liabilities are shared, but generally without legal recognition of property and other rights accorded heterosexual marriages, federally and in most states. These unions create unique challenges and opportunities

IRS Offers Employee Reclassification Agreement

Employers may reclassify independent contractors as employees and limit the resulting federal payroll taxes for their most recent tax year, plus avoid related penalties and interest for prior years, under an IRS program announced Sept. 21. In Announcement 2011-64, the IRS outlined its new Voluntary Classification Settlement Program (VCSP). Unlike

IRS Proposes New Treatment of LLC Members, Limited Partners Under Passive Loss Rules

The IRS on Friday issued proposed regulations (REG-109369-10) that would redefine “interest in a limited partnership as a limited partner” for purposes of determining material participation under the Sec. 469 passive loss rules. Under Sec. 469(h)(2), losses from an interest in a limited partnership are presumptively treated as passive losses

IRS Launches New Round of Preparer Office Visits

The IRS has sent letters to tax return preparers whom the IRS has identified as at high risk of not complying with their responsibilities as return preparers. The IRS will follow up with office visits to some of these preparers who appear to have serious compliance issues. The IRS has

IRS Announces Competency Testing for Registered Tax Return Preparers

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

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

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

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