July 2011

July 29, 2011

Final Regulations Simplify Accounting Rules in Corporate Reorganizations

The IRS issued final regulations intended to clarify and simplify rules concerning continuity of accounting methods and inventory methods in certain tax-free corporate reorganizations and liquidations.

July 28, 2011

Congressional Committee Checks In on Registered Tax Preparer Program

While tax professional communities offered diverging opinions of the registered tax return preparer (RTRP) program to a congressional subcommittee, all agreed on one thing—the IRS made a significant effort to listen.

July 27, 2011

Final Regulations Simplify Reduced Research Credit Election

The IRS released final regulations on July 26 further simplifying an election method by which taxpayers may use a standard rate to reduce a research credit under Sec. 41 in lieu of reducing their research expense deductions.

July 26, 2011

Practitioners, Policymakers Welcome IRS Change on Innocent Spouse Relief

Tax practitioners, legislators, and taxpayer advocates said the IRS’ announcement that it would no longer require taxpayer requests for innocent spouse equitable relief under Sec. 6015(f) to be made within two years of the beginning of collection activity was a long overdue change.

July 25, 2011

IRS Relents on Two-Year Limit on Innocent Spouse Equitable Relief

After winning appeals in three federal circuit courts of its two-year limit for requesting equitable innocent spouse relief, the IRS said on July 25 it will no longer observe that deadline.

July 19, 2011

IRS Discontinues High-Low Method for Substantiating Travel Expenses

The IRS announced that it is discontinuing the high-low method for substantiating lodging, meal and incidental expenses incurred in traveling away from home.

July 18, 2011

Comments Sought on IRS Continuing Education Provider Standards and Process

The IRS on July 18 invited public comments on its process for approving continuing education providers and on the standards that should apply to such providers.

July 18, 2011

FinCEN Creates FBAR E-Filing System

FinCEN announced that it has developed an electronic filing system for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

July 15, 2011

Economic Substance Guidance Issued to IRS Examiners

The IRS Large Business and International (LB&I) Division issued guidance to examiners on the newly codified economic substance doctrine limiting the application of penalties relating to the doctrine.

July 14, 2011

Phased Implementation of FATCA Requirements Announced

The IRS announced plans to phase in the requirements of the Foreign Account Tax Compliance Act (FATCA).

July 12, 2011

100,000 Preparers Did Not Comply with PTIN Rules

The IRS announced that it has identified approximately 100,000 tax return preparers who did not comply with the new rules for preparer tax identification numbers (PTINs), and it is sending them letters informing them of the problem.

July 8, 2011

AICPA Offers Guidance on Registered Preparer Competency Exam

In a July 7 letter to IRS Commissioner Doug Shulman, the AICPA offered its perspective on the agency’s development of the registered tax return preparer examination.

July 6, 2011

Tax Court Allows Deduction for Payment to Long-Term Caregivers

The Tax Court held that payments made to an elderly woman’s caregivers for personal care that she required due to her diminished capacity qualified as long-term care services and were therefore deductible.

July 1, 2011

IRS Makes Dodd-Frank Mandated Language Changes to Regulations

To comply with requirements of the Dodd-Frank Act, the IRS has issued temporary and proposed regulations that remove all references to “credit ratings” from the Treasury regulations.