nder normal circumstances, charities must be careful how they deal with political issues, to ensure they do not engage in prohibited political activity. During an election year, they must be especially careful. Failure to monitor a charity’s activities or those of its members may trigger IRS sanctions, which can
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TOPICS
Tax
Co-Op Real Estate Taxes Not Deductible for AMT
TAX CASE axpayers generally can deduct expenditures they incur directly, but not expenditures paid by others on their behalf. IRC section 216, however, allows tenant-stockholders to deduct a proportionate share of real estate taxes paid by a cooperative housing corporation (co-op). Ostrow v. Commissioner addressed the deductibility of these taxes
When Is a Liability a Liability?
TAX CASE o deduct an accrued expense, an accrual-basis taxpayer must satisfy an all-events test. The test has two prongs: Does the liability exist and, if so, can it be measured with reasonable accuracy? Legally a liability exists when it is final, fixed and absolute; that is, when the last
Uncle Sam Means Business
Source: IRS, www.irs.gov .
Good News for Employers
Source: IRS, www.irs.gov .
Money Laundering
The IRS, 33 states and Puerto Rico agreed to share Bank Secrecy Act (BSA) information and coordinate their resources to ensure that currency exchangers, check cashiers, money transmitters and issuers of traveler’s checks and stored-value cards—known as money services businesses (MSBs)—register with the government and report cash transactions and suspicious
What an Upper!
Source: IRS, www.irs.gov .
AMT = A Mean Tax
Source: IRS, www.irs.gov .
Refining the Definition of a Capital Asset
TAX CASE ection 1221 of the tax code broadly defines a capital asset. Over time the courts have attempted to narrow that definition and eliminate confusion. Recently a Third Circuit Court of Appeals ruling brought further clarification. In June 1991 George and Angeline Lattera purchased a Pennsylvania lottery ticket for
Auditing
The Public Company Accounting Oversight Board (PCAOB) said its 2006 inspections of firms that audit public companies will focus on whether they expended their efforts and resources efficiently in achieving the objectives described in PCAOB Auditing Standard no. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction
FYI
Ray Whittington, CPA, a distinguished accounting educator, was appointed dean of DePaul University’s College of Commerce and Kellstadt Graduate School of Business. Whittington joined DePaul’s faculty in 1997. Previously, he served as director of auditing research at the AICPA and vice-chair of the Auditing Standards Board and was a senior
International
The International Accounting Standards Board (IASB) published a Statement of Best Practice, Working Relationships between the IASB and Other Accounting Standard-Setters, that identifies activities in which the IASB and similar national and regional bodies believe they should engage to facilitate the adoption of or convergence with international financial reporting standards
Enhancing Public Confidence: The GAO’s Peer Review Experience
Origin and Mission The GAO is part of the legislative branch of the federal government and thus is independent of the executive branch. Congress established the GAO in 1921 to investigate all matters relating to the receipt, disbursement and application of public funds. Since then, Congress has expanded the GAO’s
Appealing Innocent Spouse Relief
TAX CASE he Ninth Circuit Court of Appeals recently considered the effects of the changes in the innocent spouse provision contained in the IRS Restructuring Act of 1998. In 1966 Isaac Baranowicz and Lora Baran married. On their 1979–1982 tax returns, they claimed depreciation deductions from several equipment-leasing tax shelters.
Financial Literacy
Slightly more than one-third of those polled were members of Generation X, born between 1964 and 1980. Most of them were skeptical about government and corporate benefits. Fifty-five percent said they will save and invest to fund their retirement, 65% didn’t expect Social Security to provide retirement benefits and 68%
Accounting
For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites. FASB issued two staff positions (FSPs). One, Accounting for Life Settlement Contracts by Third-Party Investors, provides guidance on the investor’s
New Rules for Vehicle Donations
he IRS is always on the lookout for areas in which taxpayers are involved in what it feels are questionable practices, where it believes that legitimate deductions are being abused. One such area that has come onto the service’s radar screen involves used-automobile donations. Many charitable organizations have made
Is Antarctica a Foreign Country?
TAX CASE RC section 911(a) permits any U.S. citizen who resides and works in a foreign country to exclude up to $80,000 of earned income. To qualify for the exclusion, citizens must perform the services while their tax home is in a foreign country and must reside in that country
Big Uncle Is Watching
Source: IRS, www.irs.gov .
Fewer Tax Crimes
Source: IRS, www.irs.gov .
Features
FROM THIS MONTH'S ISSUE
4 ways solo practitioners can stand out
Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
