Document Summaries for the Week of Dec. 28, 2015


IRS postpones certain health care reporting deadlines

The IRS extended the due dates for the 2015 information-reporting requirements for insurers, self-insuring employers, and other providers of essential minimum health coverage under Sec. 6055 and the information-reporting requirements for applicable large employers under Sec. 6056. Notice 2016-4 (12/28/15) (see related news story).



Decedent’s gifts of LLC interests qualified for Sec. 2503(b) exclusion

The Tax Court held that the value of assets a decedent transferred to a family limited liability company (LLC) was not includible in the value of her gross estate and that the decedent’s gifts of interests in the LLC were present interest gifts that qualified for the Sec. 2503(b) gift tax exclusion. The court also held that the decedent’s estate was entitled to deduct interest on loans from the estate’s beneficiaries to pay the estate tax liabilities. Estate of Purdue, T.C. Memo. 2015-249 (12/28/15).



Taxpayer’s wages from NATO mission in Afghanistan do not qualify for exclusion

The Tax Court held that a taxpayer was not entitled to the foreign gross income exclusion under Sec. 911(a) for the wages he earned while deployed to a North Atlantic Treaty Organization (NATO) mission in Afghanistan. According to the court, the taxpayer was  employed by the United States Army, not NATO, when performing these services and, thus, Sec. 911(b)(1)(B)(ii) prevented his compensation from being characterized as foreign earned income. Striker, T.C. Memo. 2015-248 (12/28/15).

Taxpayer cannot net loss on one block of stock against gain on another

In determining the taxable portion of $23 million of cash that the taxpayer received in a corporate merger, the Tax Court held that (1) the taxpayer is treated as the owner of two blocks of stock involved in the merger, and (2) as the owner of both blocks of stock, he could not subtract a $527,000 loss realized on one of the blocks of stock from a $17 million gain on the other block of stock. Tseytin, T.C. Memo. 2015-247 (12/28/15).

Guidance on income from data protection services for ID theft victims expanded

The IRS expanded the guidance provided in Announcement 2015-22 to include identity protection services provided to employees or other individuals before a data breach occurs. Announcement 2016-2 (12/30/15).

Taxpayers not eligible for credits

The Tax Court held that the taxpayers had unreported income from the sale of securities that exceeded the amount of unearned income allowed to claim the earned income tax credit. In addition, the taxpayers presented no evidence that they qualified for the American opportunity credit. Simmons, T.C. Memo. 2015-252 (12/30/15)



Tax Court admonishes taxpayer to stop frivolous court proceedings

The Tax Court agreed with the IRS that 12 frivolous-submission penalties had been properly assessed on the taxpayer and that all requirements of applicable law and administrative procedure had been met in making that determination. In addition, the court admonished the taxpayer to stop instituting court proceedings to delay collection of her tax liabilities and indicated that she may be subject to the $25,000 penalty of Sec. 6673(a)(1) the next time she instituted such a proceeding. Hare, T.C. Memo. 2015-250 (12/29/15).

Collateral estoppel prevents taxpayers from taking bad debt deduction

The Tax Court held that the doctrine of collateral estoppel applied to a $131,000 bad debt deduction the taxpayers claimed on their 2008 tax return, which had previously been held to be nondeductible by the Tax Court and the Fifth Circuit. However, the court also denied the IRS’s summary judgment request for almost $10,000 in Sec. 6662 penalties for 2008, agreeing with the taxpayers that the IRS’s failure to assess those penalties for 2006 and 2007 on the same issues as those in 2008, supported their reasonable cause claim. Herrera, T.C. Memo. 2015-251 (12/29/15).

Tax Insider Articles


Business meal deductions after the TCJA

This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.


Quirks spurred by COVID-19 tax relief

This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.