The House of Representatives on Thursday by a vote of 277–148 passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, HR 4853, which postpones the sunset of the 2001 and 2003 tax cuts, reduces the estate tax, extends a large number of expired provisions, and extends
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IRS Maintains Stance on Omissions from Gross Income and Overstatement of Basis
The IRS on Wednesday released final regulations defining an omission from gross income for purposes of the six-year minimum period for assessment of tax attributable to partnership items and the six-year period for assessing tax (TD 9511). The regulations are designed to resolve the question of whether an overstatement of
Senate Approves Tax Cut Extender Bill
On Wednesday, the Senate voted 81–19 in favor of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Senate Amendment 4753 to HR 4853, which would postpone the sunset of the 2001 and 2003 tax cuts, reduce the estate tax, extend a large number of expired provisions,
Federal Court Rules Health Care Insurance Mandate Unconstitutional
A federal district court has held that the health care reform legislation’s mandate that individuals obtain health insurance is unconstitutional (Virginia v. Sebelius, docket no. 3:10-CV-188 (E.D. Va. 12/13/10)). In so holding, however, the court severed that mandate from the rest of the health care reform legislation and refused to
Final Regs Issued Requiring Uncertain Tax Position Disclosure Statement
On Monday, the IRS issued final regulations requiring some corporations to file a Schedule UTP, disclosing their uncertain tax positions when filing a return (TD 9510). The final regulations adopt regulations proposed in September (REG-119046-10), with one change relating to the effective date. For prior coverage, see “IRS Issues Proposed
Provisions in the Senate’s Tax Cut Extension Bill
Senate Majority Leader Harry Reid, D-Nev., introduced legislation late Thursday that would postpone the sunset of the 2001 and 2003 tax cuts, reduce the estate tax, and extend a number of expired provisions, as well as extending unemployment benefits. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of
Security Replaces Modernization as Top IRS Challenge
In its 2011 annual report, the Treasury Inspector General for Tax Administration (TIGTA) said security is the top management challenge facing the IRS. Last year, TIGTA said modernization was the top challenge, but, “Due to recent events at IRS facilities and the potentially expanding role of the IRS, Security has
IRS Releases 2011 Standard Mileage Rates
The IRS released on Friday the standard mileage rates for use in 2011 (Notice 2010-88). The optional standard mileage rates can be used by taxpayers to calculate the deductible costs of operating an automobile. For business use of an automobile after Dec. 31, 2010, the rate is 51 cents a
IRS Releases Form and More Guidance on Small Business Health Care Tax Credit
On Thursday, the IRS released a new form and guidance relating to the small business health care tax credit for the 2010 tax year. The guidance (Notice 2010-82) discusses issues relating to employers’ eligibility for the credit and other eligibility issues. The Patient Protection and Affordable Care Act, PL 111-148,
Preparer Mandatory E-File Guidance Proposed
The IRS on Wednesday issued proposed guidance on how return preparers may meet their new electronic filing requirement for individual and fiduciary income tax returns starting Jan. 1, 2011. The proposed regulations (REG-100194-10) and a proposed revenue procedure (Notice 2010-85) provide for a hardship exception to the requirement and specify
Shulman Urges Congress to Fix AMT and Extender Issues Before Year-End
IRS Commissioner Doug Shulman urged Congress to pass tax legislation before the start of the next tax season. Shulman focused on the alternative minimum tax (AMT) patch and the extension of various income tax incentives for individuals. In identically worded letters to House Ways and Means Committee Chairman Sander Levin,
Featured Online Content for December 2010
FEATURED VIDEO Use the 2010 MAP Survey to Benchmark Your Firm The AICPA’s James Metzler, CPA, and Mark Koziel, CPA, discuss findings from the 2010 PCPS/TSCPA National MAP Survey, conducted by the AICPA’s Private Companies Practice Section and the Texas Society of Certified Public Accountants. The 2010 survey includes responses
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EXPANDED ADOPTION CREDIT GETS INTERIM GUIDANCE The IRS issued interim guidance Sept. 29 on the child adoption credit and income exclusion for employer reimbursements of adoption expenses, as expanded by the Patient Protection and Affordable Care Act (PL 111-148). For tax years beginning in 2010 and 2011, the act made
Taxpayer Off the Clock for Real Estate Loss
Time that a taxpayer considered himself “on call” for his real estate business could not be counted toward hours in which he performed services for it, limiting the losses he could claim, the Tax Court held. James Moss and his wife owned seven rental real estate properties in 2007 that
Innocent Spouse Relief: Alternatives After the Lantz Case
This past June, the Seventh Circuit Court of Appeals in Cathy M. Lantz v. Commissioner (docket no. 09-3345, 6/8/2010) reversed the Tax Court and upheld the IRS’ position that innocent spouses seeking equitable relief under subsection (f) of IRC § 6015 are subject to the same two-year filing deadline that
Displaced Workers and Deduction for Travel Expenses
In today’s economy, employees may be displaced from long-held jobs. They travel to new assignments and locations as businesses cut costs. Sometimes, employees may have to choose between being laid off or reassigned. In these situations, workers have often tried to deduct business or employment travel under IRC § 162(a)(2).
Highlights of the Small Business Stimulus Act
The Small Business Jobs Act of 2010 (PL 111-240), which Congress passed and President Barack Obama signed in September, expands loan programs through the U.S. Small Business Administration (SBA), strengthens small business preference programs for federal government projects, provides incentives for exporters, offers a variety of small business tax breaks
AICPA VP Testifies on Changes Needed to IRS Return Preparer Plan
Edward Karl, AICPA vice president–Taxation, testified at an IRS hearing Oct. 8 about proposed amendments to Circular 230 that would put into place many parts of the IRS’ plan to register and regulate tax return preparers (REG-138637-07). The proposed regulations would clarify the definition of tax practice, establish a new
Estate Must Reduce Its Credit for Tax on Prior Transfers
The Tax Court upheld the government’s reduction of a widow’s estate tax credit for tax on prior transfers due to property included in her estate previously transferred from her late husband’s estate. The court held that the limitations of IRC §§ 2013(b) and 2013(c) applied to the credit; that the
Tax Attribute Survival
Tax attribute survival is often a critical consideration in assessing a proposed corporate reorganization. Beneficial tax attributes, such as net operating losses, earnings and profits, and capital losses, are often involved, and the speed at which reorganizations tend to move makes a good foundational understanding of the relevant rules crucial
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