February 2012

February 28, 2012

Correspondence Audits Need Some Work, Tax Community Tells IRS

Correspondence audits were the subject of a public hearing by the IRS Oversight Board.

February 28, 2012

IRS Regulations Broaden Disclosures of Tax-Exemption Determinations

The IRS issued final regulations regarding disclosure of denials and revocations of tax-exempt status.

February 27, 2012

FinCEN Postpones Mandatory FBAR E-Filing

FinCEN announced that it is postponing until July 1, 2013, its requirement that FBARs be filed electronically.

February 24, 2012

Eighth Circuit Affirms S Corporation Shareholder’s Compensation Was Not Reasonable

The Eighth Circuit affirmed a lower court’s decision that an S corporation shareholder’s $24,000 salary was not reasonable compensation.

February 23, 2012

President Signs Payroll Tax Cut Extension Bill; New Form 941 Released

President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012 and the IRS released a revised Form 941to reflect the extended payroll tax cut.

February 22, 2012

Supreme Court: Filing a False Tax Return Can Lead to Deportation

The Supreme Court held that a conviction under Sec. 7206 for willfully filing a false tax return (or for aiding and abetting filing a false tax return) is an aggravated felony that can result in deportation.

February 17, 2012

Portability Election Extended for Some Estates

Some executors who missed a deadline to apply a decedent’s unused estate and gift tax exclusion amount to a surviving spouse received an extension Feb. 17.

February 17, 2012

Congress Passes Payroll Tax Cut Extension

On Feb. 17, the House of Representatives and the Senate both passed a bill that will extend the reduced 4.2% Social Security tax rate through the end of the year.

February 15, 2012

FinCEN Once Again Extends FBAR Filing Deadline for Certain Financial Professionals

FinCEN announced a further extension of the deadline for filing FBARs, to June 30, 2013, for a small group of financial professionals

February 14, 2012

Partnerships Can Issue Schedules K-1 Electronically

The IRS issued rules partnerships must follow if they want to supply Schedules K-1 electronically.

February 14, 2012

IRS Proposes PTIN Regs. for Supervised, Nonsigning and Non-1040 Preparers

The IRS issued proposed regulations regarding the availability of PTINs for supervised nonsigning preparers and for preparers of forms other than Form 1040. They also address what tax forms are considered returns for purposes of the PTIN rules.

February 13, 2012

President’s Budget Proposes AMT Elimination, Tax Reform

President Barack Obama unveiled his proposed budget for FY 2013. It includes several tax reform proposals, including plans to eliminate the AMT, to repeal LIFO, and to tax dividends of high-income taxpayers at ordinary income rates.

February 10, 2012

Foreign Tax Credit Regs. on Splitter Arrangements, Determining Who Is Liable for Foreign Tax

The IRS issued final regulations on determining who has the legal liability to pay the foreign tax for foreign tax credit purposes and temporary regulations on the application of the “anti-splitter” rules of Sec. 909.

February 9, 2012

Guidance Issued on Work Opportunity Credit for Veterans

The IRS issued a notice that gives employers guidance on two new tax credits for qualified veterans and provides extra time to comply with some of the credits’ requirements.

February 9, 2012

Employer Health Coverage Questions Addressed

The IRS and Treasury, along with two other federal departments, further described planned guidance on provisions for employer-sponsored health coverage mandated by the Patient Protection and Affordable Care Act.

February 8, 2012

Proposed FATCA Regs. Take Comprehensive Approach

The IRS issued proposed regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities.

February 7, 2012

TIGTA: Revise Form 1099-R to Improve Taxpayer Compliance

TIGTA recommended the IRS change its Form 1099-R to improve taxpayer compliance with reporting and paying tax on retirement income

February 6, 2012

Couples Who Filed Joint Returns Must Now File Separate Powers of Attorney

The new version of the IRS power of attorney form requires a husband and wife who filed a joint tax return to each file a separate power of attorney on separate forms to designate the representative he or she chooses, even if it is the same person.

February 2, 2012

Prop. Regs. Would Ease Required Minimum Distribution Rules for Older Retirees Who Purchase Certain Annuities

The IRS issued proposed rules that would permit IRA participants to enter into contracts for annuities that begin at an advanced age, using a certain amount of their account balances without having these amounts count for calculating required minimum distributions from the IRAs .

February 2, 2012