The IRS issued proposed regulations that affect taxpayers who produce or resell property and allocate costs under the simplified production method or simplified resale method.
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Statutory Definition of Notional Principal Contract Further Extended Through 2013
The IRS announced that it was further extending the effective date until 2014 for proposed regulations issued under Sec. 871(m).
IRS Launches Redesigned Website; Temporarily Takes Down Some Services
A redesigned IRS.gov website went live on Aug. 30; however, the IRS also announced that it is taking down several of its online services during the Labor Day weekend.
IRS Changes Stance on Application of Sec. 6662 Penalty to Frozen Refundable Credits
The IRS announced that it would no longer impose a penalty under Sec. 6662 for a substantial understatement of tax when a taxpayer claims a refundable tax credit he or she is not entitled to, but the IRS does not pay the refund or approve the credit.
AICPA Provides Guidance on FSA Certification Letters
Tthe AICPA has worked with the FSA to create a certification letter CPAs can use when their clients are asked to certify income and is providing its members with sample engagement and disclosure letters to be used in connection with providing a certification letter for clients.
Federal Law Preempts Alabama Statute Denying Tax Deduction for Illegal Alien Employees
The Eleventh Circuit held that an Alabama law that disallowed an employer a state tax deduction for wages and compensation paid to an alien unauthorized to work in the United States was preempted by federal immigration law.
IRS Chief Counsel’s Office Issues Advice on Identity Theft Returns
The IRS Office of Chief Counsel explained what the IRS can do when a return is filed by an identity thief in order to generate a fraudulent refund and the IRS has issued a statutory notice of deficiency based on that fraudulent return.
IRS Announces the End of Tiered Issues
Effective Aug. 17, 2012, the IRS will no longer use the tiered management process to set examination priorities and address important issues in the Large Business & International division.
Draft Form 706 Provides Check Box to Not Elect Portability
Draft Form 706 addresses portability of a deceased spouse’s unused estate and gift tax exclusion amount and provides a check box for the executor to opt out of electing portability of the unused portion.
Corporation Cannot Deduct California Business Privilege Tax in Year Paid
An accrual-basis taxpayer could not deduct the California business privilege tax in the year it was paid, even though California treated the tax as being incurred in that year.
Removal of Two-Year Limit on Innocent Spouse Claims Does Not Revive Taxpayer’s Case
A federal court dismissed a taxpayer’s claim that she was entitled to innocent spouse relief under Notice 2011-70, which announced the removal of the two-year limitation period for claims for equitable innocent spouse relief under Sec. 6015(f).
TIGTA: IRS Encourages Employees to Ignore ITIN Fraud
TIGTA confirmed allegations from IRS employees that their supervisors were urging them to ignore potential fraud in a program that reviews and verifies applications for ITINs.
Fraud Convicts Cannot Argue in Tax Court That Payments Did Not Result From Fraud
Taxpayers who were convicted of fraud are precluded from later arguing that payments they received were not the result of fraud, the Tax Court held in two related cases
Notice Permits Charitable Contributions to Single-Member LLCs
The IRS explained that contributions to disregarded SMLLCs wholly owned and controlled by a U.S. charity will be treated as if made directly to the U.S charity.
TIGTA Recommends Steps for IRS to Reduce Fraudulent Refunds From Identity Theft
TIGTA reported that the IRS had missed 1.5 million tax returns with potentially identity-theft-related fraudulent tax refunds in excess of $5.2 billion for the 2011 filing season.
Proposed Regs. Would Clarify Who Is Subject to Sec. 274(n) Limit on Meal Expenses
The IRS released proposed regulations clarifying which party is subject to the rule that limits the deduction for meals to 50% of the expenses incurred.
Regulations Finalize Rules on Entertainment Use of Business Aircraft
The IRS issued final regulations relating to the disallowance under Sec. 274 of deductions for the use of business aircraft for entertainment.
Treasury Releases Model Intergovernmental Agreement for FATCA
Treasury released a model intergovernmental agreement designed to implement the information-reporting and withholding-tax provisions in FATCA.
Taxpayers Who Did Not Establish Insolvency Must Recognize COD Income
Taxpayers who settled a credit card debt for $4,412 less than they owed in 2008 had to include that amount in income because they did not prove they were insolvent under Sec. 108(a)(1)(B) at the time of the debt discharge (Shepherd, T.C. Memo. 2012-212). Sec. 108(a)(1)(B) excludes cancellation of debt
Tax Court Upholds Regulation Requiring Dependents Be Citizens in Year Tax Benefits Are Claimed
The Tax Court upheld Regs. Sec. 1.152(a)(1), which requires that children be U.S. citizens at some time during the calendar year for which the children are claimed as dependents.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
