The IRS has issued final regulations governing the election and calculation of the alternative simplified research and development credit. The regulations extend the election procedures for the alternative incremental research credit to the alternative simplified credit.
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TOPICS
C Corporation Income Taxation
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.
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.
Employment Tax Consequences of a Corporate Change of Control Event
This item examines the employment tax consequences related to a corporate change of control event. Those consequences generally depend on the type of event, namely whether there is an asset purchase, a merger, or a stock acquisition.
One Reorganization, Two Tax Years, One Practical Solution
This item considers what is the proper time to report the transaction if a reorganization spans different tax years.
IRS Matching Program for Forms 8023 and 8883 May Result in Invalid Sec. 338 Election
The IRS recently launched a program to match the filing of Form 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases, by a foreign purchasing corporation acquiring a foreign target, with Form 8883, Asset Allocation Statement Under Section 338, to report the effect of the Sec. 338 election.
Special Limitation Periods for Carryback Assessments
By exercising its setoff authority, the IRS has been able to achieve the same limitation period in Form 1120X carryback situations as in tentative refund cases with Form 1139.
Ordinary Worthless Stock Deductions: Characterizing Subsidiary Receipts
An ordinary loss deduction for worthless stock of an affiliated operating subsidiary generally is permitted as long as more than 90% of the subsidiary’s gross receipts are from active operating income. This item discusses the difficulty of determining whether a subsidiary’s gross receipts qualify as active operating income for this purpose under various circumstances.
FIRPTA and the Return of Capital Distributions
FIRPTA is quite complex and filled with traps for the unwary, especially in the area of return of capital distributions.
IRS Applies Reverse Acquisition Regulations: A Substance-over-Form Approach
Determining whether a transaction is characterized as a reverse acquisition under the consolidated return regulations can be challenging. This item focuses on tax implications of reverse acquisitions and reviews recent private letter rulings in which the IRS applied substance-over-form principles.
The Impact of Unified Loss Rules on Earnings and Profits
This item explores whether an adjustment is made for E&P purposes when a member of a consolidated group is required under the unified loss rules to reduce its basis in the stock of another member for regular tax purposes upon the first member’s disposition of the second member’s stock at a loss for regular tax purposes.
Bank Allowed to Deduct Lawsuit Settlement Payments
In a private letter ruling, the IRS allowed a private bank catering to high-wealth individuals to deduct payments it made to settle lawsuits arising from criminally fraudulent activities by one of the bank’s fund managers.
Prop. Regs. on Controlled Group Deferred Losses
The IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group (REG-118761-09).
AICPA Recommendations for Reducing Schedule M-3 Burdens
The AICPA called on the IRS to collaborate with external stakeholders in revising Schedule M-3 and suggested some revisions to reduce taxpayers’ compliance burdens.
IRS Finalizes Alternative Simplified R&D Credit Rules
The IRS issued final regulations governing the election and calculation of the alternative simplified research and development credit.
IRS Eliminates Form 5472 Duplicate Filing Requirement
The IRS issued temporary and proposed regulations to remove the duplicate filing requirement for Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.
Telecom Universal Service Fund Payments Not Excludible from Income Under Sec. 118
Governments sometimes make payments to telecommunications carriers for providing telephone and communication services to low-income users and those in remote or isolated areas. The courts have recently addressed the tax treatment of those payments.
Engagement Letter Fairness Opinion Fee Language May Affect Fees’ Taxation
Language used in investment banker (IB) engagement letters to implement fee payment arrangements can significantly affect the federal income tax treatment of such payments.
100% Bonus Depreciation Guidance Issued
In Rev. Proc. 2011-26, the IRS has issued guidance on how taxpayers can deduct 100% of the cost of qualified business property placed in service in 2011 under rules enacted last year .
Tax Consequences of Transaction Costs
This article discusses the tax consequences of transaction costs in four settings: in general, when acquiring or producing tangible assets, when acquiring or creating intangible assets, and when acquiring a business.
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.
