The IRS said victims of the severe floods in Minnesota and North Dakota will have an extra month, until May 15, to file their 2008 individual tax returns and pay any tax due. The relief applies to flood victims and relief workers who are assisting in the affected areas. The
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FDIC Orders Bank to Modify RAL Program
Republic Bank & Trust Co. has consented to the issuance of a cease and desist order with the FDIC for its refund anticipation loan (RAL) program. The order gives the bank 120 days to establish an adequate compliance management system for its RAL program and sets various deadlines of up
President Signs Bill Extending Aviation Taxes
On March 30, President Obama signed into law the Federal Aviation Administration Extension Act of 2009, PL 111-12. This act extends the taxes that fund the Airport and Airway Trust Fund through the end of September. The taxes had been scheduled to expire on March 31. Specifically, the fuel excise
The Sex of a Hippopotamus: A Unique History of Taxes and Accounting
by Jay StarkmanTwinset Inc., 2008, 456 pp. The Sex of a Hippopotamus by Jay Starkman is a well-documented and interesting read for professionals in the accounting and tax fields. In particular, this book is appealing to instructors, retirees, recent accounting graduates and the hard-to-buy-for CPA. The book begins with anecdotes
P&G Appeals Deduction Denial
In a case on appeal before the Sixth Circuit, household consumer goods manufacturer Procter & Gamble (P&G) and a related entity claim a refund of taxes paid on a foreign sales corporation (FSC) advance payment transaction (APT). The U.S. District Court for the Southern District of Ohio had denied the
Location Tax Incentive Not Federal Taxable Income
The IRS said in a coordinated issue paper that a location tax incentive paid or credited to a business by a unit of state or local government is not included in the business’s gross income but rather reduces its tax expense. A location tax incentive is a tax reduction by
Private Foundations: Tax Law and Compliance, Third Edition
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
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