This page tracks developments in five hot tax topics affecting taxpayers in 2010 and 2011 that Congress has had under consideration. On Dec. 17, President Barack Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR 4853), which deals with four of the
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IRS Exempts CPA-Supervised Nonsigners From New Preparer Rules
On Thursday, the IRS released guidance on the implementation of 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
IRS Updates Guidance on Adequate Disclosure of Positions
The IRS has released updated guidance identifying when a taxpayer’s disclosure of an item or position in an income tax return is adequate for purposes of reducing the understatement of tax penalty and the tax return preparer penalty for understatement due to unreasonable positions (Revenue Procedure 2011-13). The IRS regularly
Tax Law Changes Will Delay Start of Filing Season for Some Taxpayers
The IRS is warning taxpayers that it will not accept certain 2010 individual tax returns until mid- or late February due to tax law changes recently enacted by Congress (IR-2010-126). Taxpayers affected include all those who itemize deductions on Schedule A, as well as those who take certain recently extended
IRS Releases 2011 Tax Tables and Other Inflation Adjustments
On Thursday, the IRS released the 2011 tax rate tables and other inflation adjustments, which it had been holding while waiting for Congress to resolve various tax issues (Revenue Procedure 2011-12). With the enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act
Congress Resolves Many Tax Issues During Lame-Duck Session
Congress adjourned its year-end lame-duck session on Wednesday after passing legislative fixes for several pending tax issues, including the estate tax, the expiration of the 2001 and 2003 tax cuts, an alternative minimum tax (AMT) patch, and extensions of many expired provisions. However, it failed to repeal the expanded Form
IRS Releases 2011 Withholding Tables
In the wake of Thursday night’s passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, the IRS released the withholding tables for employers to use in 2011. The IRS was unable to issue the tables earlier because of uncertainty over whether the current tax rates would be
Tax Cut Extension Enacted
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
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
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