I read with interest the article on “Representing Clients With Tax Delinquencies and Deficiencies” (“Tax Practice Corner,” April 09, page 65), as this is part of my practice. Of particular interest was the paragraph on abatement of penalties because that is often a key concern of delinquent clients. The authors
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Tax
Ponzi Guidance Welcomed
The Ponzi loss safe harbor recently set forth in Revenue Procedure 2009-20 and Revenue Ruling 2009-9 brought welcome clarity to permissible treatment of such losses as well as the possibility of expedited theft loss deductions, practitioners said. “It’s about as taxpayer-friendly as one could have hoped for,” said Rick Klahsen,
No Second Class of Stock
The Fifth Circuit Court of Appeals rejected an S corporation owner’s argument that the corporation’s payments to her father, one of the company’s founders, had created a second class of stock that had terminated the S election. The daughter had unsuccessfully sought by that reasoning to exclude from her gross
IRS Proposes Basis-Tracing Regulations
The IRS has issued proposed regulations that propose a comprehensive approach for stock basis recovery. The regulations, if adopted as final, would apply across a broad spectrum of transactions. They will create a single model for stock basis recovery if a shareholder receives a dividend under IRC § 301. These
IRS Notice Provides Work Opportunity Credit Definitions
The IRS has released a notice that defines the terms “unemployed veteran” and “disconnected youth,” for purposes of the IRC § 51 work opportunity credit (Notice 2009-28). The notice also gives transition relief to employers who hire employees from those targeted groups after Dec. 31, 2008, and before July 17,
Tax Amnesty Programs and Voluntary Compliance Initiatives: A Way to Mitigate Declining State Revenues
Since 2000, more than half of the states have offered tax amnesty programs one or more times (see Federation of Tax Administrators, “State Tax Amnesty Programs” (July 2007)). The programs allow taxpayers to “come clean” and report and pay delinquent tax liabilities. They are popular with taxpayers because they provide
New Expatriation Forms 8854 and W-8CE Now Available
A new version of Form 8854, Expatriation Information Statement, and new instructions were posted on the IRS Web site on May 14. The form expands the previous Form 8854 into parts A and B, with part B aimed at those new to the expatriation regime. The IRS has also issued
Revenue Ruling Gives Guidance on S Elections for Partnerships Converting to Corporations
The IRS issued Revenue Ruling 2009-15, which addresses the question of whether, when a partnership becomes a corporation for federal tax purposes, it is eligible to elect to be taxed as an S corporation in its first tax year. The ruling, issued Thursday, clarifies that a partnership that converts to
Administration’s International Tax Proposals Plan to Raise $210B Over 10 Years
President Obama released his plan to raise $198.3 billion from 2011–2019 by overhauling international taxes, which will affect multinational corporations. When combined with further international tax reforms that will be described in the administration’s full budget proposal, the proposed international tax reform package would raise $210 billion over the next
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SIXTH CIRCUIT UPHOLDS LIFE TABLES FOR LOTTERY LUMP SUMThe Sixth Circuit Court of Appeals ruled in Negron v. U.S. (No. 07-4460 (6th Cir. 1/28/09)) that the IRS annuity tables of IRC § 7520 provide a realistic and reasonable estate valuation of a state lottery prize paid as a lump sum
Third Party’s Activities Create Nexus
The U.S. Supreme Court declined to review a finding of substantial nexus by New Mexico for gross receipts tax on mail-order and online sales in that state by a subsidiary of Texas-based computer maker Dell Inc. The New Mexico Court of Appeals last summer affirmed an assessment of gross receipts
Strengthening Tax Services’ Foundation
The AICPA’s Statements on Standards for Tax Services (SSTSs) have been updated, clarified and streamlined in proposed revisions now available for study and comment by AICPA members. They can be found on the Tax Division pages of the AICPA Web site at tinyurl.com/5be2rk. The SSTSs are enforceable rules of conduct
Deduction Denied for ESOP Stock Redemption
The Eighth Circuit Court of Appeals denied food giant General Mills’ deductions for “cash distribution redemptive dividends” it paid participants in the company’s employee stock ownership plans (ESOPs). In so doing, the Eighth Circuit reversed a district court decision and ignored the Ninth Circuit’s ruling six years ago in Boise
Retirement Planning Using a Client’s Tax Return
Many CPAs never follow up with clients after tax season, but CPAs can provide valuable assistance by taking some time after busy season to use the tax return as a guide to helping clients prepare for retirement. A tax return is an excellent starting point for the personal financial planning
Noncompete Agreement Payment Wasn’t Sale of Personal Goodwill
The First Circuit upheld a district court’s holding that money allocated to a noncompete agreement was not for “personal goodwill” when a business’ sale agreement didn’t specifically identify it as such. When a business is sold, it is not uncommon for a portion of its sale price to be attributable
Mechanic Gets Bumped Again
The Seventh Circuit Court of Appeals upheld a Tax Court opinion that had denied former airline mechanic David Wilbert’s deductions for travel expenses incurred when he accepted assignments in various cities to keep his job under the airline’s employee “bumping” arrangement. Although the court was sympathetic to the taxpayer’s situation,
Looking Through the QSub Election
The Tax Court denied a taxpayer’s claim that the interest expense deduction for IRC § 265 qualified tax-exempt obligations (QTEOs) held by a qualified subchapter S subsidiary (QSub) bank is exempt from IRC § 291(a)(3) financial institution preference item limitations. Petitioners Jerome and Doris Vainisi together owned 100% of an
Small Retirement Plans Face Funding Dilemma
Many traditional defined benefit pension plans are underfunded due to market declines. As a result, barring congressional action, they could face future excise taxes ranging from 10% to 100% of the underfunded amounts as mandated by the Pension Protection Act of 2006 (PPA). Funding liabilities are especially difficult for smaller
Help for Homebuyers: A Guide to the New First-Time Homebuyer Credit
The first-time homebuyer credit, introduced by the Housing and Economic Recovery Act of 2008, PL 110-289 (the 2008 act), has been substantially modified and clarified by two developments this year: the passage of the American Recovery and Reinvestment Act of 2009, PL 111-5 (the 2009 act), and the issuance of
IRS Issues Proposed Regs on Graduated Retained Interests Under Sec. 2036
The IRS issued proposed regulations Thursday providing guidance on the portion of trust property includible in the grantor’s gross estate if the grantor has retained certain interests in the property (REG-119532-08). The retained interests covered include the use of the property and the right to an annuity, unitrust, graduated retained
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SPONSORED REPORT
Preparing clients for new provisions next tax season
As the 2025 filing season approaches, H.R. 1 introduces significant tax reforms that CPAs must be prepared to navigate. These legislative changes represent some of the most comprehensive tax updates in recent years, affecting both individual and corporate taxpayers. This report provides in-depth analysis and guidance on H.R. 1.
From The Tax Adviser
November 30, 2025
Digital asset transactions: Broker reporting, amount realized, and basis
October 31, 2025
Recent developments in estate planning
October 31, 2025
