A CPA receives a request from a client to provide a letter to the client’s mortgage broker, lender, adoption agency, or other third party. The request seems simple enough and harmless. All the client asks is that the CPA verify that this is her client, that she has been preparing
Advertisement
TOPICS
Tax
TIGTA: Some Tax Shelter Promoters Not Disciplined
The IRS’ Office of Professional Responsibility (OPR) was unaware of a significant number of licensed tax practitioners who had been assessed penalties, enjoined by federal courts or criminally sentenced for promoting abusive tax shelters, the Treasury Inspector General for Tax Administration (TIGTA) found in an audit. As a result, the
IRS Announces Revisions to Form 941
The IRS announced that in mid-March it will start sending employers new Forms 941, Employer’s Quarterly Federal Tax Return. Employers will use the revised form to claim the new COBRA premium assistance payments credit, which was introduced by the recent stimulus act, the American Recovery and Reinvestment Act of 2009,
Sixth Circuit Upholds Use of Life Tables for Lottery Lump Sum
The Sixth Circuit Court of Appeals ruled in Carol J. Negron v. U.S., docket no. 07-4460, 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. In so doing, it reversed a district court’s
Magazine Article Not a Penalty Defense
The Tax Court upheld penalties against a corporation that ignored its CPA’s advice against claiming bonus depreciation on a used airplane. The corporation instead had relied on a magazine article anticipating a possible law change that would have permitted the deduction. Congress, however, failed to pass the provision. On March
Line Items
IRS ANNOUNCES LIEN RELIEFIn December, the Service said it would expedite processing of requests to subordinate a tax lien to another lien or discharge it in some cases where a home is being sold for less than the amount secured by a mortgage. See Announcement IR-2008-141. The IRS typically takes
The Redesigned Form 990
Most nonprofit organizations are now reviewing their first redesigned IRS Form 990 and its many new information requirements designed to enhance transparency and accountability. CPAs with nonprofit clients now are seeing the pieces fit together with satisfaction or, if drawing together the information has been difficult, perhaps with some concern.
Comments on Selected Parts of the New Form 990 and Schedules
Editor’s note: This is a sidebar to “The Redesigned Form 990: Advising Nonprofit Organizations,” March 09. Part I provides a snapshot of the entire organization because it summarizes the income statement and balance sheet on the first page. It also asks for a description of the organization’s mission. Since this is
New Single-Member LLC Reporting Reqiurements
Many tax-exempt organizations have formed single-member limited liability companies (SMLLCs) as integral parts of their entity structure. SMLLCs enjoy flexible treatment for tax purposes, limitation of liability, easy transferability of ownership interest by sale or exchange, and separate governance and management. As a result, they are widely used to conduct
Be an “Energy Star”
For many business owners 2008 was a record year for energy costs. The Obama administration, while pledging to reduce greenhouse gas emissions 80% by 2050, has said that ‘energy efficiency’ is the cheapest, cleanest and fastest energy ‘source.’ Consider the following tips to make your business more energy efficient.
Best of Both Worlds?
Over the past several years many companies pursued extremely aggressive growth, resulting in an accumulation of fixed assets on balance sheets. Many of these assets (especially land and buildings) have enjoyed an unprecedented appreciation in value. However, the current recession and accompanying credit crunch have caught some companies in a
Creating Joint Ownership: Avoiding the Tax Traps and Other Pitfalls
Last month’s column showed how adding a child or other nonspouse family member to the title of property as a joint tenant can create unintended consequences of deemed gifting for gift tax purposes. In that illustration, Jack added his daughter, Liz, as joint owner of rental property, immediately triggering a
Reporting Regs Issued for Employer-Owned Life Insurance
The IRS has issued final regulations on information reporting required for employer-owned life insurance policies. The Pension Protection Act of 2006 added IRC §§ 101(j) and 6039I concerning employer-owned life insurance contracts. An employer-owned life insurance contract is one owned by a person engaged in a trade or business employing
Two Out of Three Not Good Enough
The Tax Court ruled that a taxpayer was not entitled to claim a theft loss where he failed to show he had no reasonable chance of recovering his stolen money during the tax year in question. From 1999 to 2001 Dominick Vincentini, a resident of Michigan, was involved with Anderson
Private Annuity Defers Gain
A taxpayer was permitted to defer capital gain when he transferred appreciated capital assets in exchange for a private annuity. The Tax Court held the arrangement met the requirements of Revenue Ruling 69-74, 1969-1 C.B. 43, and thus the capital gain could be deferred until the taxpayer began receiving payments
Worker Classification Still Troublesome
The Tax Court ruled that a worker was an employee rather than an independent contractor partly because he was paid a daily rate during the four years he worked for an energy company and he supervised other employees. The worker classification issue has been a headache for taxpayers and the
Erroneous LIFO Methodology
A mistake made in a taxpayer’s last-in, first-out (LIFO) computation may repeat in later-year returns if staff preparing the computation take a “same as last year” approach. When the mistake ultimately is detected, there is a question of whether the mistake represents a method of accounting or an error. Huffman
Treatment of Gift Card/Certificate Sales: No Answers, More Questions
Gift card sales are becoming more and more a part of our retail shopping experience. The IRS is aware that the popularity of gift cards has increased “at a remarkable rate in recent years” (LMSB-04-0507-039). Gift card sales raise a variety of interesting federal income tax questions. The answers to
IRS Issues Final Regs on Automatic Contribution Arrangements
The Service on Tuesday issued final regulations on automatic contribution arrangements for 401(k) and other eligible plans. The regulations (TD 9447) adopt with modifications the 2007 proposed regulations (REG-133300-07) providing guidance on implementing provisions of the Pension Protection Act of 2006 and the Worker, Retiree, and Employer Recovery Act of
Features
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
