July 2014

July 30, 2014

Regulations Provide Guidance on Sec. 6707 Material Adviser Penalty

The IRS issued final regulations under Sec. 6707, which imposes a large penalty on any material adviser who fails to file a return required under Sec. 6111(a) disclosing a reportable transaction or who files a false or incomplete return.

July 25, 2014

IRS Issues Guidance on Health Insurance Premium Tax Credits

The IRS issued regulations and revenue procedures addressing how to calculate the Sec. 36B premium tax credit.

July 23, 2014

New IRS Rules Simplify Compliance for Money Market Fund Shares

The IRS issued guidance that allows a simplified method for calculating gain or loss on shares in MMFs subject to the new rules and exempts redemptions of shares in these MMFs from the wash sale rules

July 22, 2014

Final Rules Issued on Bona Fide Indebtedness and Terminating Partnership’s Startup Expenses

Final regulations were issued on S corporation shareholder basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide and on the deductibility of startup expenditures and organizational expenses for partnerships following a termination of a partnership.

July 22, 2014

Federal Courts Disagree on Health Care Credits for Federal Exchanges

Two federal appellate courts issued conflicting decisions regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health insurance on exchanges set up by the federal government.

July 21, 2014

New Rules on Covered Asset Acquisitions Will Shut Down Transactions to Avoid Sec. 901(m)

The IRS will issue regulations to prevent taxpayers from misapplying the statutory disposition rule in cases where the gain or loss from the disposition of the relevant foreign asset is recognized for U.S. income tax purposes but not for foreign income tax purposes.

July 18, 2014

Definitions of R&E Expenditures Are Amended Under Final Rules

The IRS issued final regulations on which amounts paid or incurred in connection with the development of tangible property, including pilot models, qualify for the Sec. 174 deduction (or amortization) for research and experimental expenditures.

July 17, 2014

Court Halts IRS Regulation of Contingent Fees for Refund Claims

A federal court granted summary judgment and issued an injunction to prevent the IRS from regulating contingent fee arrangements for the preparation and filing of ordinary refund claims under Circular 230.

July 17, 2014

Effective Date of Fiduciary Fee Unbundling Rules Delayed Until 2015

The new rules governing which costs of trusts and estates are subject to the 2% floor on miscellaneous deductions now apply to tax years beginning after Dec. 31, 2014, rather than to tax years beginning on or after May 9, 2014.

July 16, 2014

Partnership Interest Expense Allocation Rules Are Finalized

Final regulations make permanent four changes to the rules for allocating and apportioning interest expense for partners in partnerships.

July 15, 2014

AICPA Sues IRS to Stop Return Preparer Program

The AICPA filed suit in the U.S. District Court for the District of Columbia, asking the court to halt the IRS’s recently introduced Annual Filing Season Program.

July 14, 2014

Fighting Identity Theft, IRS Issues Final Rules on Truncated Identification Numbers

Final regulations allow the use of truncated taxpayer identification numbers on payee statements and certain other documents where not prohibited by the Code, applicable regulations, or other guidance published in the Internal Revenue Bulletin, forms, or instructions.

July 10, 2014