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Tax
IRS Unveils New Performance Measures
In one of many cultural changes mandated by the IRS Restructuring and Reform Act of 1998, the IRS set out to overhaul its employee evaluation methods. The bottom line—the IRS needed to find a way to assess employee performance that did not rely on enforcement results (for example, evaluating its
Are VEBAs Worth Another Look?
EXECUTIVE SUMMARY A VEBA MAY BE A GOOD WAY FOR CERTAIN BUSINESSES to cut taxes, provide benefits for employees—including owner-employees—and protect assets from personal and business creditors. VEBAs also can provide other benefits, including the opportunity for substantial estate tax savings. A VEBA TRUST CAN PROVIDE A VARIETY OF BENEFITS,
Deducting Entertainment Expenses.
Costs incurred in entertaining clients, customers, prospective customers, suppliers, employees and other business associates are valid business deductions. However, due to the significant personal nature involved in many of these activities, the expenses are subject to special conditions and restrictions. They must meet strict substantiation requirements; in addition, amounts otherwise
Line Items
LINE ITEMS Ratings and Stats Don’t Mix An IRS panel on the alleged misuse of enforcement statistics found that enforcement results had been used to evaluate officers and set goals for employees. Such performance measurements are a violation of IRS policy. As a result, the service issued reprimands to 12
The IRS Tightens The Squeeze On Family Limited Partnerships
The IRS has declared war on family limited partnerships (FLPs). It is in the middle of an aggressive audit program testing the validity of such partnerships for estate and gift tax (transfer tax) purposes. In revenue ruling 93-12, the IRS agreed with earlier court decisions that allowed minority and marketability
New Rule On Stock Transactions
A proposed regulation, designed to increase compliance by corporate taxpayers, could create both tax planning opportunities and pitfalls for companies. The existing regulation under IRC section 1032 allows a corporation to issue its own stock, or options to buy its stock, in exchange for cash or property without recognizing either
Taxpayer Penalties
Tax return preparers are often asked by their clients to view a controversial treatment in a favorable light. Under the law, both taxpayers and their preparers may face penalties if they cannot support a tax treatment used in a return. Under IRC section 6662, taxpayers who understate their income tax
Recognizing Income on Foreclosures
How much income does a taxpayer realize if he or she is insolvent and a creditor forecloses on property secured by recourse debt? Can the taxpayer exclude any of the income as forgiveness-of-indebtedness income? Taxpayers are required to recognize income from all sources, unless specifically excluded. Forgiveness-of-indebtedness income is specifically
You Cant Have Cake and Eat It, Too
In Estate of William G. Street v. Commissioner (TC Memo 1997-32), the 5th Circuit Court of Appeals affirmed a Tax Court decision to include the proceeds from life insurance policies made payable to the decedents estate in the decedents gross estate for federal estate tax purposes. William Street and his
IRS puts the finishing touches on reorganization plans.
The planning phase for the modernization of the IRS is moving into high gear. The agency is putting the finishing touches on a blueprint that will transform both its structure and its focus. The plan features four operating divisions with a small central office in Washington. The operating divisions will
Line Items
LINE ITEMS IRS Cuts Mileage Rate The IRS announced the 1999 optional standard mileage rates in revenue procedure 98-63. If you use your automobile for business purposes this year, you can deduct 31 cents per mile. For charitable use the rate is 14 cents per mile and for medical or
The New and Improved Home Office Deduction
EXECUTIVE SUMMARY THE HOME OFFICE PROVISIONS OF THE TAXPAYER Relief Act of 1997 took effect on January 1, 1999. These new rules should make it possible for more taxpayers to deduct home office expenses because the act expands the definition of a principal place of business. The delivery of a
Ask Your Health Plan To Say Ahhh
EXECUTIVE SUMMARY CHECK THE BALANCE SHEET. CPAs should evaluate the solvency of health care plans they are considering for their company, a client or themselves. Price and quality of care are important, but financial stability over time may be even more so because instability can cause prices to go up
Sanctioning public charities for improper dealings.
Public charities and social welfare organizations are subject to numerous rules and regulations affecting much of their day-to-day operations. The Internal Revenue Code limits what those organizations can do, with whom they may be involved and who may benefit from their dealings. One major limitation is that the charities cannot
Tax Pros Say Simplify Code
In a recent poll by RIA Group, tax practitioners were asked, If you could make one change to the Internal Revenue Code, what would it be? The answers confirmed the new mantra of practitioners and taxpayers alike: Simplify the tax system. The message is the same as that espoused by
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Build reusable Skills in Anthropic’s Claude AI
Instead of rewriting prompts each time, CPAs can turn routine tasks into reusable AI Skills. This Technology Q&A walks through how to build Claude Skills that process files, ask setup questions, and export clean Excel outputs.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
