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.
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C Corporation Income Taxation
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.).
Treatment of Prior-Period Expenses under Sec. 199
Taxpayers that are eligible for the domestic production activities deduction under Sec. 199 often face the difficult question of how to properly allocate prior-period expenses between activities that created domestic production gross receipts (DPGR) and activities that did not create DPGR (non-DPGR).
Parent’s Payment on Behalf of Subsidiary
This item summarizes the tax law related to when a parent corporation pays an expense on behalf of a subsidiary and recent related IRS guidance.
IRS Releases Guidance on Expanded NOL Carryback Rules
The IRS has issued guidance on the expanded five-year net operating loss (NOL) carryback rules, which were amended by the Worker, Homeownership, and Business Assistance Act.
Renewable Energy Tax Incentives
As part of the economic stimulus, federal and state governments are stepping up their efforts to encourage individuals and businesses to take advantage of renewable energy technologies to be more energy efficient. These incentives include income tax incentives, sales or property tax incentives, rebates, grants, loans, industry support, and bonds (these vary by jurisdiction).
Homebuyer Credit, NOL Carrybacks Extended; Mandatory E-Filing Enacted
The Worker, Homeownership, and Business Assistance Act of 2009 contains a handful of tax provisions. These include changes to the first-time homebuyers’ credit, increased NOL carrybacks for small businesses, and mandatory e-filing for most tax return preparers.
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.
