The IRS followed up on its January 26 announcement about plans to require certain business taxpayers to report uncertain tax positions on their returns. It extended the ongoing comment period on the plan and announced that it will start requiring the reporting for tax years beginning in 2010 (Announcement 2010-17).
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TOPICS
C Corporation Income Taxation
Sec. 7874: New Regs. Tighten the Anti-Inversion Rules
Final and temporary regulations under Sec. 7874 that clarify and expand a number of rules concerning inversions of domestic corporations.
Tax Consequences of De Facto Liquidations
Under specific facts, a corporation may be deemed to have liquidated for income tax purposes without an actual legal liquidation. This is referred to as a de facto liquidation. This principle can trigger income tax consequences for both the company and its shareholders.
Transaction Cost Update
This item discusses recent taxpayer-favorable guidance provided by the IRS and the Tax Court on the tax treatment of transaction costs.
Congress Enacts Hiring Incentives Act with Tax Provisions
The Hiring Incentives to Restore Employment Act contains several tax items, the biggest of which is a payroll tax credit for employers who hire workers who have been unemployed for at least 60 days and who are not replacement hires.
Meeting the Applicable Corporate Reorganization Reporting Requirements
The reorganization provisions of the Internal Revenue Code, located primarily in Secs. 354, 355, and 368, allow a variety of tax-free transactions in the form of combinations, divisions, and recapitalizations. It is extremely important to document that the correct procedures have been followed.
IRS Announces Release of Draft Schedule to Report Uncertain Tax Positions
The IRS announced that it was releasing draft Schedule UTP and draft instructions as part of its initiative to require certain business taxpayers to report uncertain tax positions on their returns.
The Step-Transaction Doctrine, QSPs, and Tax-Free Reorgs.
Rev. Rul. 2008-25 expands on existing rulings with respect to the application of the step-transaction doctrine within the context of qualified stock purchases and tax-free reorganizations. The ruling provides a succinct yet comprehensive analysis that sheds light on the combined application of the predecessor rulings.
Sec. 304 Anti-Avoidance Rule Modified
The IRS recently released temporary and proposed regulations that modify and strengthen regulations previously issued under Temp. Regs. Sec. 1.304-4T. The regulations apply to certain transactions otherwise subject to Sec. 304 but entered into with the principal purpose of avoiding the statute’s application.
Pretransaction Restructuring Using an F Reorg.
This item explains how, within the context of a subchapter S corporation target, a Sec. 368(a)(1)(F) reorganization private letter ruling may present a structure that allows the parties to a reorganization to have their cake and eat it, too.
Substantiating the Research Tax Credit
Research tax credits present unusual problems of documentation and support. Substantiating activities and expenses to meet the statutory definition of “research” often requires subjective judgments, subject to disparate interpretations.
Consequences of S Corporation Termination in a Reorganization
An S corporation can participate as a corporate entity in a corporate reorganization; this leads to a substantive advantage of S corporations over partnerships
Final Regs. on Cash D Reorgs.
The IRS published final regulations addressing the qualification and treatment of certain acquisitive transactions as reorganizations under Sec. 368(a)(1)(D) where no stock or securities of the acquiring corporation are issued in the transaction (cash D reorganizations).
IRS Plans to Require Disclosure of UncertainTax Positions
The IRS said it is developing a schedule that certain businesses would be required to use to disclose uncertain tax positions on their returns annually.
Growing Opportunities: The Agricultural Chemical Security Credit
Taxpayers that deal with fertilizers and pesticides should consider their own facts and circumstances to determine how the agricultural chemical security credit might apply.
The Proper Timing of Workers’ Compensation Deductions
For companies with more than a de minimis amount in their workers’ compensation reserve, it may be worthwhile to review the details underlying the reserve amount.
Profile of Multinational Businesses with Inbound Investments
Growth in international business brings increased opportunities for CPA firms to provide accounting and tax services. This article focuses on multinational businesses with inbound investments—i.e., foreign investors with business operations in the United States.
Sec. 199 Deduction and Government Contractors
Although the domestic production activities deduction (DPAD) came into law in 2004, certain types of taxpayers eligible for the deduction–including contractors doing business with the federal government–often fail to claim it on their income tax returns.
IRS’s Calculation of Buy-in Payment Held Unreasonable
The Tax Court held that the IRS’s calculation of the amount of a buy-in payment for the transfer of intangible assets from a U.S. company to a newly created foreign subsidiary was arbitrary, capricious, and unreasonable.
Definition of Supplies Clarified for Purpose of R&D Credit
Taxpayers that use supplies in their research and development (R&D) efforts should reevaluate the costs they include in their R&D credit computations in light of a recent Tax Court decision (TG Missouri Corp.).
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.
