The IRS on Friday announced that taxpayers who live in foreign countries can now use the Free File program to prepare and e-file their federal tax returns (IR-2011-30). The program is available to both U.S. citizens and resident aliens, and currently five of the Free File software providers can accept
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Tax Filing Season Resources—Tax Year 2010
This is the one-stop shop for all the updates you need to know for this year’s tax filing season. Find resources from the Journal of Accountancy, plus tax return checklists and tax savings tips from the AICPA, categorized by tax topic. INDIVIDUAL TAX Free File Program Expanded to Include Returns Filed
Uncertain Tax Position FAQs Posted
The IRS has posted a series of questions and answers (FAQs) 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
First-Time Homebuyer Credit Recapture Causing IRS Processing Problems
On Wednesday, the IRS announced that it is having problems processing tax returns that involve repayment of the IRC § 36 first-time homebuyer credit for 2008 home purchases. The IRS stated that it has assigned additional staff and resources to the issue to resolve it promptly. One group of affected
IRS Releases 2010 Gift Tax Return
The IRS on Friday released the final 2010 version of Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. The updated form reflects changes made by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (PL 111-312), which was enacted Dec. 17, 2010.
IRS Proposes Permanently Extending Period for Receiving Authorization to Disclose Return Information
The IRS on Thursday issued a proposed regulation that would permanently extend from 60 days to 120 days the permitted period for submission of taxpayer authorizations allowing disclosure of returns and return information to third-party designees (REG-153338-09). IRC § 6103(c) authorizes the IRS to disclose a taxpayer’s returns or return
IRS Issues Final Regs on Disclosing Return Information to Whistleblowers
On Monday, the IRS released final regulations regarding disclosure of return information by the Treasury Department in connection with written contracts among the IRS, whistleblowers and, if applicable, their legal representatives (TD 9516). The new IRS Whistleblower Office may determine during the course of an investigation that it needs the
IRS Issues First Guidance on Nonprofit CO-OP Health Insurers
The IRS issued its first guidance on the requirements for new qualified nonprofit health insurance issuers under IRC § 501(c)(29) and has requested comments on specific issues (Notice 2011-23). The notice clarifies that the IRS is not yet accepting applications for recognition of tax-exempt status under section 501(c)(29) and will
Senate Passes Bill Addressing Tax Strategy Patents
The Senate voted 95–5 Tuesday to pass the America Invents Act (S 23), which was formerly called the Patent Reform Act. Included in the bill is a provision intended to stop the granting of patents for tax strategies. That provision, in section 14 of the bill, would deem any “strategy
Pass-Throughs Dominate Tax Reform Conversation
While lawmakers and the Obama administration both support simplifying an Internal Revenue Code described by one witness as “grotesque in its complexity,” lines in the sand are quickly being drawn on how it should be done. These lines were evident in a March 3 House Ways and Means Select Revenues
House Passes 1099 Repeal
On Thursday, the House of Representatives passed the Small Business Paperwork Mandate Elimination Act of 2011 (HR 4) by a 314–112 vote. The bill would repeal the expanded Form 1099 information reporting requirements mandated by last year’s health care legislation. It would also repeal the new 1099 reporting requirements imposed
Coalition, AICPA Fight Government Contractor Withholding Law
The AICPA has added its voice to those calling on Congress to repeal a law that would require federal, state and local governments to withhold 3% on payments made to government contractors, and on Medicare, farm, and certain other payments. The potential impact of the withholding requirement is evident in
2011 Automobile Depreciation Limits Released
The IRS on Tuesday issued the 2011 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under IRC § 280F (Revenue Procedure 2011-21). This year, the IRS has provided the limitation amounts for vehicles placed in service in 2011 for which bonus depreciation under IRC §
Line Items
DEFYING COURTS, IRS FINALIZES BASIS OVERSTATEMENT RULES The IRS released final regulations defining an omission from gross income for purposes of the extended six-year limitations period for assessment of tax (TD 9511). The regulations finalize without change temporary regulations (TD 9466) that the Tax Court held to be invalid last
Motor Fuel Tax Refund for Off-Road Use
Many taxpayers may be overlooking the refund or credit available under IRC § 6421 for federal excise taxes paid for motor fuels and similar state provisions. The taxes are on fuels used to power vehicles and equipment on roads and highways. Taxes paid for fuel to power vehicles and equipment
CPA-Supervised Nonsigning Preparers Exempted From Exam, Continuing Education
The IRS issued guidance on new regulations governing tax return preparers (Notice 2011-6), and provided an exception to its return preparer regulation plan for nonsigning preparers supervised by a CPA, attorney, enrolled agent or other Circular 230 practitioner. The notice also provides an exception for individuals who prepare returns that
State Payout Bonuses Were Capital Contributions
The U.S. District Court for the Middle District of Florida held that payments received by an insurance company from the state of Florida were capital contributions and not income, since the state intended the payments to be nonshareholder capital contributions to encourage capital investment by private insurers in the Florida
Act 2 for Business Tax Incentives
Enacted in the waning days of the 111th Congress, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act, PL 111-312) was a creature of political compromise. But the act nonetheless built upon already attractive incentives that had been passed only a few months
Educated Spouse Denied Relief
The Tax Court upheld the IRS position that an educated spouse was unreasonable in believing her ex-husband would pay a tax deficiency, and denied her innocent spouse relief. Elizabeth B. Kelly, who had received a degree in social science, married Sean Kelly in 1981. Sean Kelly worked at Portfolio Analytics,
When Is a Supplemental Claim a New Claim?
For taxpayers, timeliness is crucial for certain acts, such as filing a refund claim with the IRS within the statute of limitation period. A refund claim must set forth in detail each ground upon which a credit or a refund is claimed and include facts sufficient to apprise the IRS
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