Final regulations set the time for automatic extensions of partnership, trust and estate income tax returns at five months (TD 9531). Under this rule, the extended returns and Schedules K-1 for partners and beneficiaries will generally be due Sept. 15. The regulations also provide for an automatic six-month extension for
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Tax
House Passes Bill With Tax Patent Provision, Sends Back to Senate
On Thursday, by a vote of 304–117, the House of Representatives passed the America Invents Act (H.R. 1249), which includes a provision intended to stop the granting of patents for tax strategies. The bill would deem any “strategy for reducing, avoiding, or deferring tax liability” to be prior art, and
IRS Raises Standard Mileage Rate for Second Half of 2011
In response to rising gasoline prices, the IRS has raised the standard mileage rate for business use of an automobile from 51 cents per mile to 55½ per mile, effective July 1 (Announcement 2011-40). The medical and moving standard mileage rate is increasing to 23½ per mile, also on July
IRS Publishes Interim Guidance on Stock Basis Reporting
On Wednesday, the IRS issued interim guidance on issues relating to the basis of stock subject to broker reporting (Notice 2011-56). The guidance responds to stakeholder comments received in response to final regulations on the topic issued last year (TD 9504). The IRS says it plans to issue proposed regulations
IRS Suspends Foreign Asset, Passive Foreign Investment Company Information Reporting Rules
The IRS announced on Tuesday that it is suspending the information reporting requirements for certain individuals with foreign assets and shareholders of passive foreign investment companies (PFICs) under IRC §§ 6038D and 1298(f) (Notice 2011-55). The requirement will be suspended until the IRS releases Form 8938, Statement of Specified Foreign
FinCEN Grants Another FBAR Extension for Some Individuals
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Friday released Notice 2011-2, which gives another small subset of individuals with only signature authority over certain foreign financial accounts who are required to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), with respect to those
IRS Further Extends Deadline for Certain 2009 and Earlier FBARs
The IRS has further extended the deadline for certain persons to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for 2009 and earlier years (IRS Notice 2011-54). The new filing deadline is Nov. 1, 2011. The extension applies to persons with signature authority over a
Fourth Circuit Upholds Two-Year Innocent Spouse Limitation Period
The United States Fourth Circuit Court of Appeals overturned a Tax Court decision and upheld a Treasury regulation that sets a two-year statute of limitation on claims for innocent spouse relief (Jones v. Commissioner, docket no. 10-1985 (4th Cir. 6/13/11)). This marks the third time the Tax Court has been
IRS Finalizes Alternative Simplified R&D Credit Rules
On Friday, the IRS issued final regulations governing the election and calculation of the alternative simplified research and development credit under IRC § 41(c)(5) (TD 9528). The new rules are effective for tax years ending after June 9, 2011. The final regulations extend the election procedures for the alternative incremental
IRS Eliminates Form 5472 Duplicate Filing Requirement
On Thursday, the IRS issued temporary and proposed regulations to remove the duplicate filing requirement for Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (TD 9529 and REG-101352-11). Under the current final regulations, corporations that are required
FinCEN Clarifies Parties Entitled to FBAR Filing Extension
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a revised notice Monday that clarified that a small subset of individuals are entitled to a one-year extension of the June 30, 2011, filing deadline to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). The notice
Regulators Extend FBAR Filing Deadline for Certain Financial Professionals
The IRS and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced Tuesday that a small group of individuals required to file the Report of Foreign Bank and Financial Accounts (FBARs) will receive a one-year extension beyond the upcoming filing date of June 30, 2011. FinCEN issued Notice 2011-1 that
IRS Announces “Good Faith” Extension of Voluntary Disclosure Deadline
The IRS said on Thursday that it is making available to taxpayers a 90-day deadline extension to participate in the 2011 offshore voluntary disclosure initiative (OVDI). The extension would be available to taxpayers who have made a good faith attempt to fully comply by Aug. 31, but are unable to
IRS Finalizes Circular 230 Regulations
The IRS issued final regulations Tuesday (TD 9527) implementing components of the IRS’ initiative to register and regulate all paid tax return preparers. The regulations, which finalize proposed regulations issued in August 2010 (REG-138637-07), revise regulations under Title 31, part 10, commonly known as Circular 230, which govern the practice
Schedule UTP Answers Posted
The IRS posted a series of questions and answers about the new requirement for large corporations to report their uncertain tax positions. The seven FAQs address both reporting requirements for Schedule UTP, Uncertain Tax Position Statement, and the IRS’ policy of restraint. For the 2010 tax year, corporations filing Form
Plug-In Electric Cars Get a Jolt From Tax Incentives
With manufacturers now promoting their new plug-in electric models, the cars have caught up with the buyer tax credit Congress dangled for them three years ago. CPAs’ clients are likely to ask about this and other tax breaks for plug-in electrics. Although the Chevy Volt was available only in a
Co-ops and Casualties
The Tax Court held that a resident of a coop apartment complex could not claim a casualty loss deduction for an assessment to repair a common area in which she held no property interest beyond a right to use it. Christina Alphonso owned stock in Castle Village Owners Corp., a
Highway Repairs Are Domestic Production Property
The Tax Court held that a taxpayer’s receipts from highway construction projects were domestic production gross receipts (DPGR) permitting the taxpayer to claim a domestic production activities deduction. The court held that the taxpayer’s work substantially renovated real property, since it materially increased the property’s value, substantially prolonged its useful
Seven Good Reasons Credit Shelter Trusts Remain Relevant
At first glance, a new provision of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 might seem to have provided by law what estate planners have traditionally provided for their clients by setting up one or more trusts: a way to ensure that the estate or
Preparer E-File Regs Finalized
The IRS issued final regulations (TD 9518) and several pieces of guidance relating to the requirement that return preparers e-file tax returns, starting this year. The final regulations adopt, with minor changes, proposed regulations (REG-100194-10) that were published last December, and they require specified tax return preparers to e-file if
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