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Tax

Son Liable for Father’s Unpaid Taxes

The Tax Court affirmed an IRS determination that a son is liable for his father’s unpaid taxes as the transferee of his father’s Florida condominium. Florida’s Uniform Fraudulent Transfer Act (FUFTA) did not protect the son from the liability. When his mother’s health declined in 1989, Scott Rubenstein moved from

Currency Option Not a Contract in “Major/Minor” Shelter

The Tax Court held that a foreign currency call option is not a foreign currency contract under the plain language of the IRC § 1256 contract mark-to-market rules. Thus an unrealized loss existing on the date that a foreign currency option was transferred to a charity was disallowed. Section 1256

Wider Material Participation Rules Could Increase Self-Employment Tax

In three recent cases, the Tax Court and Court of Federal Claims have held that a member of a limited liability company (LLC) or a limited liability partnership (LLP) should be treated as a general partner rather than presumptively as a limited partner for purposes of testing for material participation

Maximizing the Section 199 Deduction

Every business in the manufacturing sector, whether small or large, should consider the manufacturing deduction under IRC § 199. While section 199 comes with a complex set of rules, it nonetheless represents a valuable tax break for businesses that perform domestic manufacturing and certain other production activities. However, businesses should

AICPA Testifies at IRS Hearing on User Fee Regulations

Edward Karl, the AICPA’s vice president of taxation, testified Tuesday at an IRS hearing on proposed regulations relating to the user fee aspect of the Service’s proposal to require all paid tax return preparers to obtain a preparer tax identification number (PTIN) and use it on all tax returns after

IRS Finalizes Regs on Tentative Carryback Adjustments

The IRS on Monday released final regulations under IRC § 6411 providing guidance on the computation and allowance of tentative carryback adjustments (tentative refunds) (TD 9499). The final regulations finalize temporary regulations that were issued in 2007 (TD 9355) and are effective Aug. 24, 2010, the day they are scheduled

IRS Expands Use of Electronic Payments, Discontinues Paper Coupons

The IRS has issued proposed regulations that would eliminate paper coupons for deposits of employment taxes, corporate income and estimated taxes, and many other taxes (REG-153340-09). The paper coupon payment system will be shut down at the end of this year. With this change, taxpayers will be required to use

IRS Moves Forward With Preparer Registration Plan

On Thursday, the IRS issued proposed regulations that would put into place many of the parts of its plan to register and regulate tax return preparers (REG-138637-07). Proposed amendments to Circular 230 would clarify the definition of tax practice, establish a new “registered tax return preparer” designation, define the eligibility

Final Regs Released for Payment Card and Third-Party Network Information Reporting

The IRS on Friday issued final regulations (TD 9496) regarding the new information reporting requirement under IRC § 6050W for payment card and third-party network transactions. Starting Jan. 1, 2011, banks and similar transaction settlement entities must file annual information returns for each participating merchant or other payee reporting aggregate

Rules Issued for Income Deferral of Canceled Debt

The IRS issued temporary and proposed regulations Wednesday relating to taxpayer elections to defer recognition of cancellation of debt (COD) income. The American Recovery and Reinvestment Act of 2009 (ARRA, PL 111-5) enacted IRC § 108(i), providing an election to defer COD income arising from the forgiveness or reacquisition of

Members of Congress Ask Treasury to Modify Return Preparer Registration Plans

Thirty-one members of the House of Representatives wrote to Treasury Secretary Timothy Geithner on Aug. 2, expressing concerns with aspects of the IRS’ proposal to regulate paid tax return preparers. The House members asked that the plan be modified to exempt nonsigning preparers who work for a CPA firm from

Congress Votes to Limit Use of Foreign Tax Credits

The House of Representatives on Tuesday interrupted its August recess and passed H.R. 1586 by a vote of 247–161, sending the bill to President Barack Obama. The president signed the bill into law the same evening. The measure was passed by the Senate on Aug. 5. The bill is designed

IRS Changes Name of LMSB Division, Expands Focus

On Wednesday, the IRS announced that it is reorganizing and changing the name of its Large and Mid-Size Business (LMSB) division as part of its ongoing effort to focus more on international tax compliance (IR-2010-88). Starting Oct. 1, the division will be known as the Large Business and International (LB&I)

2010 Tax Software Survey: Lacerte

Click here for detailed survey responses for Lacerte. (Opens in new window; click once to enlarge.) General Information Tax program name: Lacerte Vendor name: Intuit, Inc. Telephone (sales): 800-765-7777 E-mail (sales): APD_Sales@intuit.com Website: http://lacerte.intuit.com Number of users: N/A Pricing Price on Federal 1040 (new customers): Federal 1040: $2,799 for unlimited

2010 Tax Software Survey: Drake Software

Click here for detailed survey responses for Drake Software. (Opens in new window; click once to enlarge.) General Information Tax program name: Drake Software Vendor name: Drake Software Telephone (sales): 800-890-9500 E-mail (sales): Sales@DrakeSoftware.com Website: DrakeSoftware.com Number of users: 34,000+ Pricing Price on Federal 1040 (new customers): $1,495 (with early

2010 Tax Software Survey: TaxSlayer Pro

Click here for detailed survey responses for TaxSlayer Pro. (Opens in new window; click once to enlarge.) General Information Tax program name: TaxSlayer Pro Vendor name: TaxSlayer Pro Telephone (sales): 888-420-1040 E-mail (sales): sales@taxslayerpro.com Website: www.taxslayerpro.com Number of users: 7,000+ Pricing Price on Federal 1040 (new customers): Classic: $895Premium: $995

2010 Tax Software Survey: TurboTax for Individual Consumer Use

Click here for detailed survey responses for TurboTax for Individual Consumer Use. (Opens in new window; click once to enlarge.) General Information Tax program name: TurboTax for Individual Consumer Use Vendor name: Intuit, Inc. Telephone (sales): 888-777-3066 E-mail (sales): Submitted via TurboTax.com website Website: www.TurboTax.com Number of users: Not disclosed

2010 Tax Software Survey: TaxACT 2010 Preparer’s 1040 Edition

Click here for detailed survey responses for TaxACT 2010 Preparer’s 1040 Edition. (Opens in new window; click once to enlarge.) General Information Tax program name: TaxACT 2010 Preparer’s 1040 Edition Vendor name: 2nd Story Software Telephone (sales): 800-573-4287 or 319-265-6500 E-mail (sales): support@taxact.com Website: www.taxact.com Number of users: N/A Pricing

2010 Tax Software Survey: TaxSimple

Click here for detailed survey responses for TaxSimple. (Opens in new window; click once to enlarge.) General Information Tax program name: TaxSimple Vendor name: TaxSimple, Inc. Telephone (sales): 973-989-8955 E-mail (sales): sales@taxsimple.com Website: www.taxsimple.net Number of users: N/A Pricing Price on Federal 1040 (new customers): $725      Increase from last

FROM THIS MONTH'S ISSUE

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.

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