by Bruce R. Hopkins and Jody Blazek,John Wiley & Sons Inc., 2008, hardcover, 768 pp. Only about 75,000 private foundations exist in the U.S. But like the people who create them, they exert an influence far beyond their numbers. Mostly, they do so by their largesse. Including community foundations, they
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ANNUAL EMPLOYMENT TAX FILINGS ARE OPTIONALThe IRS issued proposed and temporary regulations under IRC §§ 6011 and 6302 (TD 9440) that no longer mandate annual filings by eligible employers in the reporting and paying of income taxes and Federal Insurance Contribution Act (FICA) taxes withheld from wages. The annual filings,
Data Point: 189 Million
The approximate number of callers to the IRS’ toll-free telephone help lines during fiscal year 2008. Source: TIGTA report on IRS call volume, www.treas.gov/tigta/auditreports/2009reports/200940030fr.html
IRS, Historic Hotel Face Off Over Facade
The Tax Court held that the Uniform Standards of Professional Appraisal Practice (USPAP) are not the sole measure of an expert witness’s reliability. The witness had been called upon to provide a value of a conservation easement restricting the use of real property, or “servitude.” Based on that testimony, the
IRS Alternative Dispute Resolution Programs
The IRS recently extended its fast track settlement program to certain exempt and government entities and announced the establishment of a two-year test of mediation and arbitration procedures for offers in compromise and trust fund recovery penalty cases under the jurisdiction of the Office of Appeals. TEGE FAST TRACKThe Tax
Taxes in Troubled Times
The IRS has acknowledged there’s plenty of pain to go around in the current economic downturn. Financially strapped taxpayers can take advantage of several relief initiatives and provisions that could lessen their tax bite. Those with investments posting a loss may be able to “harvest” it or at least reposition
Tax Considerations for Buying and Selling Property With a Burdensome Lease
An economic downturn like the current one can cause fixed lease obligations to become burdensome and trigger a significant negative impact on leasing in many markets. Real property and other business assets may have been leased in a sale-leaseback transaction, or the lessee may have simply desired use but not
Democrats Keep Exemption
In the waning days of the Bush administration, the government ended its long-running effort to retroactively revoke the tax-exempt status of a Democratic Party-affiliated organization that it claimed had improperly promoted the party’s candidates. In 1985, prominent members of the Democratic Party including then-Gov. Bill Clinton formed the Democratic Leadership
Stimulus Act Eases Taxes for Individuals, Small Businesses
With the enactment of the American Recovery and Reinvestment Act of 2009 on Feb. 17, Congress delivered a smorgasbord of tax relief items to individual taxpayers and small businesses. While the specifics of those measures were the subject of whirlwind conference negotiations in Congress, the outcome reflects an attempt to
Representing Clients With Tax Delinquencies and Deficiencies
It’s not unusual for CPAs to encounter clients delinquent in filing individual, corporate or payroll returns. CPAs can establish a rewarding practice niche if they are prepared to offer a full range of tax resolution options and be a trusted ally to clients who need to atone for their lapses
Capital Contributions Increase Stock, Not Loan Basis
Two brothers’ additional capital contributions to S corporations of which they were shareholders could not offset their ordinary income from payments for loans they made to the corporations, the Tax Court held. The court rejected their argument that their capital contributions restored the previously reduced basis of their shareholder loans.
Partner-Level Defense Rule Held Valid
The Tax Court upheld the validity of temporary regulations requiring a partner to raise partner-level defenses to penalties in separate litigation after resolution of unified partnership proceedings. Andrew Filipowski created New Millennium Trading LLC in 1999 to generate a deductible loss through the use of foreign currency options. In 2005,
IRS Revises Inflation Adjustment Amounts
On Friday, the IRS issued Rev. Proc. 2009-21, which modifies the inflation-adjusted amounts to be used for certain tax credits in 2008 and 2009. The modified numbers reflect recent statutory changes by the Tax Extenders and Alternative Minimum Tax Relief Act of 2008, PL 110-343 (Tax Extenders Act), and the
First Circuit Vacates Textron Workpaper Privilege Decision
The First Circuit has vacated its January decision in the Textron case, and a full panel of First Circuit judges will rehear the case in June. The January decision (No. 07-2631 (1st Cir. 1/21/09)) had held that the work-product privilege could operate to prevent the disclosure to the IRS of
CRS Reports on Capital Loss Treatment
The Congressional Research Service (CRS) has released a report analyzing the effects of a proposed increase in the net capital loss limitation. Currently, noncorporate taxpayers can net capital gains and losses and can use up to $3,000 in capital loss to offset ordinary income for that tax year (IRC §
IRS Advises How Part Owners Handle $1 Million Mortgage Deduction Limit
The IRS Office of Chief Counsel has issued a memorandum outlining how partial owners of a principal residence with a mortgage bigger than $1 million should handle their mortgage deduction (CCA 200911007). Under IRC § 163(h)(3), taxpayers can deduct interest paid on certain mortgages and home equity loans, but the
Casting Doubt on the Accrual of Interest
Due to the recent turmoil in the credit markets, creditors and borrowers alike are evaluating the tax treatment of interest accruals related to troubled loans. Generally under Treas. Reg. § 1.446-2(a), interest is taken into account by a taxpayer according to the taxpayer’s regular method of accounting. Beyond the specific
IRS Reverses Position on Eligibility of Intangibles for Like-Kind Exchange Treatment
The IRS Office of Chief Counsel has announced a change in its position on the use of certain intangible property in IRC § 1031 like-kind exchanges (CCA 200911006). Previously (in Technical Advice Memorandum 200602034 and Field Attorney Advice 20074401F) the IRS had decided that registered trademarks, trade names, newspaper mastheads,
IRS Releases Guidance for Ponzi Scheme Investors
Because the Ponzi scheme perpetrated by Bernard Madoff involved potentially thousands of taxpayers, the IRS has issued guidance on the tax aspects of losses from a Ponzi scheme and created a safe harbor under which investors can claim theft loss deductions. IRC § 165(a) allows taxpayers to deduct losses sustained
Service Gives Guidance on New 5-year Carryback of NOLs
The IRS issued guidance on how eligible small businesses may take advantage of the enhanced net operating loss (NOL) carryback provisions of the American Recovery and Reinvestment Act of 2009, PL 111-5 (ARRA). Under those provisions, eligible small businesses may carry back a 2008 NOL up to five years instead
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