The U.S. Court of Appeals for the Federal Circuit issued a long-awaited decision that could make it more challenging to patent business processes such as tax and financial strategies. In a 9-3 ruling issued on Oct. 30 in the In re Bilski case, the court stated a new, more
Advertisement
TOPICS
Tax
Economic Substance Redux
The Court of Federal Claims ruled against another Son of BOSS shelter, upholding penalties despite the taxpayers’ reliance on the advice of tax attorneys The Welles family owned Therma-Tru Corp., a leading manufacturer of insulated doors. Between 1999 and 2000 the family negotiated the sale of the corporation to a
Widow of Ex-San Francisco Mayor Held to Be an Innocent Spouse
The widow of Joe Alioto, who served as the mayor of San Francisco from 1968 to 1976, was granted relief under section 6015(f) from paying nearly $2 million in taxes for tax years 1995 and 1996. The Tax Court had dismissed the case in September 1996 due to lack of
Line Items
SERVICE LAUNCHES LILO, SILO SETTLEMENT INITIATIVEThe IRS followed up its recent court victories against LILOs (lease in, lease out) and SILOs (sale in, lease out) with an offer to settle the estimated hundreds of the listed-transaction tax shelters still on companies’ books. The offer, sent initially on Aug. 6 to
Guidance Issued on Dividing CRTs, Assiting Divorcing Couples and Squabbling Annuitants
The IRS has issued Revenue Ruling 2008-41 confirming that charitable remainder trusts (CRTs) can be divided into separate but equal trusts for each recipient without adverse tax consequences. If properly divided, the separate trusts will continue to qualify as CRTs, and no private foundation termination excise taxes will apply under
Documenting a Casualty Loss
The ordeals of hurricanes Katrina, Rita and Wilma in 2005 and Gustav and Ike this year taught us in the Gulf Coast a lot about serving clients who have experienced casualty losses. Here are some ideas to keep in mind if you ever have to help your clients rebuild their
Applying At-Risk Rules Risky
On remand from the Sixth Circuit, the Tax Court has held that a deficit restoration obligation (DRO) added to the operating agreement of a limited liability company didn’t allow its member to create recourse debt. Despite the DRO, the at-risk rules under IRC § 465 barred a current deduction because
Open Transaction Doctrine Applied to Demutualization
The Court of Federal Claims ruled that gain was not recognized in the sale of stock received in exchange for policy ownership interests in an insurance company’s demutualization. A mutual insurance company is owned by the policyholders rather than shareholders. When it reorganizes as a traditional stock company, the policyholders
Phone Company on the Hook for Incentives
The Eleventh Circuit Court of Appeals upheld a Georgia district court decision holding that federal and state incentive payments to a local telephone company were gross income. The appellate court accepted the lower court’s analysis that the payments were not excludable as nonshareholder capital contributions. IRC § 118(a) excludes from
Safe From the IRS but Not Necessarily From the State
My comments relate to Stephen Huggard’s article titled “Voluntary Disclosure to the IRS: A Viable Option” (March 08, page 40). This article was very well written and right on point. Huggard makes an excellent final comment in the article stating that, “As long as the taxpayer is careful, he or
Highlights
The rescue package, the Emergency Economic Stabilization Act of 2008, allows the Treasury Department to buy up problem assets in an effort to improve the balance sheets of financial institutions and keep credit flowing. The final version of the plan passed by Congress and signed by President Bush on Oct.
Depreciate Property in Like-Kind Exchanges Consistently
The Treasury has issued final regulations (Treasury Decision 9314) explaining how to depreciate modified accelerated cost recovery system (MACRS) property that has been acquired in a section 1031 like-kind exchange or through a section 1033 involuntary conversion when both the acquired and relinquished property are subject to MACRS in the
Intentionally Defective Grantor Trusts
Estate tax planners have long employed intentionally defective grantor trusts to freeze the value of an asset for estate tax purposes while transferring assets out of the estate free of gift tax. An intentionally defective grantor trust (IDGT) is a complete transfer to a trust for transfer tax purposes but
Be Wary of Taxes Sapping Life Insurance Proceeds
Life insurance can provide an “instant” source of liquidity to the estate of an owner of a closely held business, preferably when the policy insuring the business owner’s life is held by an irrevocable life insurance trust (ILIT). Especially when business owners face succession issues, CPAs advising
IRS Commissioner: Tax Collections Must Be Fair Amid Tough Economic Times
The IRS and tax preparers can reach out to taxpayers hurt by the current economic downturn to help them meet their tax obligations, IRS Commissioner Douglas Shulman told the AICPA National Tax Conference on Oct. 27. (Watch the speech here.) While the Service is mindful that many taxpayers are
Alan R. Einhorn to Lead AICPA Tax Executive Committee
Alan R. Einhorn, national director of the Quality Assurance Group for Deloitte Tax LLP, is the new chair of the American Institute of Certified Public Accountant’s Tax Executive Committee. Einhorn will lead the AICPA’s senior tax committee for the next two years. The Tax Executive Committee establishes tax policy for
Tax Provisions of the Emergency Economic Stabilization Act
Among its many tax provisions, the Emergency Economic Stabilization Act equalized with that of taxpayers the understatement penalty standard tax preparers must observe for undisclosed items. The provision was originally introduced in the House late last year at the urging of the AICPA to fix the problems created by the
IRS Appeals Jelke to Supreme Court
The government asked the U.S. Supreme Court to review the Eleventh Circuit’s decision in Estate of Frazier Jelke III v. Commissioner (100 AFTR2d 2007-6694, “Tax Matters: Dunn Does It Again,” JofA, March 08, page 70). The Eleventh Circuit previously declined to rehear en banc its decision overruling the Tax Court
Features
FROM THIS MONTH'S ISSUE
AI risks CPAs should know
Are you ready for the AI revolution in accounting? This JofA Technology Q&A article explores the top risks CPAs face—from hallucinations to deepfakes—and ways to mitigate them.
From The Tax Adviser
January 31, 2026
Trust distributions in kind and the Sec. 643(e)(3) election
January 31, 2026
Effects of the OBBBA on higher education
December 31, 2025
