Tax Ethical and Penalty Issues in the UTP Context: A Review After Five Years of Experience
This column reviews the advent of Schedule UTP, considers the applicable ethical rules, and offers some best practice tips for practitioners.
Reporting & Filing Requirements
“Cadillac” Health Plan Excise Tax Delayed Until 2020
The so-called Cadillac plan excise tax is now scheduled to take effect in 2020.
Recognizing and Measuring Tax Benefits From Uncertain Tax Positions
Once all uncertain tax positions have been identified, FASB Accounting Standards creates a two-step process to recognize and measure the tax benefits arising from those positions.
Acquisition of Partnership Interest Constitutes an Expansion of Distributing Corporation’s Business
The IRS ruled that a distributing corporation’s acquisition of an interest in a partnership was not an acquisition of a new or different business.
Proposed Regulations Would Provide Guidance for Allocation and Absorption of Losses on a Consolidated Return
Proposed regulations address an issue when there is a consolidated net operating loss.
Should Some Frequent Flier Miles Be Exempt From Excise Tax?
The IRS on Thursday asked for feedback on whether frequent flier miles that are redeemed for anything other than taxable air transportation should be exempt from the Sec. 4261 excise tax.
Recent Legislation Creates Professional Employer Organization Status
Professional employer organizations (PEOs) provide comprehensive payroll, benefits, and human resource outsourcing solutions to unrelated third-party employers. PEOs are often also referred to as employee leasing companies or "co-employers." The model for providing those services, which has been relatively consistent for many decades, may change significantly because of recent legislation that will bifurcate PEOs into two categories.
Compliance With Short-Period Return Rules Can Stave Off Penalties and Rejection of Elections as Untimely
The unextended due date of the return of a domestic corporation, Form 1120, U.S. Corporation Income Tax Return, generally is the 15th day of the third month following the close of the corporation's tax year. However, when a target corporation joins the consolidated group of a purchasing corporation on a date other than the first day of the target corporation's tax year, the due date for the target corporation's short-period final return is determined without regard to the last day of the short period.
Support for Corporate Structure Under State Corporate Practice of Medicine Rules
The IRS concluded that two professional corporations could file a consolidated return with another corporation, even though licensed professionals, not one of the members of the consolidated return group, were the actual legal owners of these PCs' stock, as required by state law.
IRS Disagrees With Tax Court on Ability to Designate Employment Tax Payments as Income Tax Withholding
The IRS announced in that it will not follow a Tax Court holding that an employer may designate payments of its employment taxes to the income taxes of specific employees.
Update on the Medical Device Excise Tax
The medical device excise tax with its complex regulations and reporting requirements essentially amounts to a sales tax on members of a targeted industry group regardless of whether they have profits.
Consolidated Income of Affiliated Group Subject to Graduated Rates
The Tax Court held that all the consolidated income of an affiliated group that consisted of a corporation that was a qualified personal service corporation and another corporation that was not a qualified personal service corporation should be taxed using the graduated tax rates of Sec. 11(b)(1).
FICA Taxation of Nonqualified Deferred Compensation Arrangements
With the passage of the Patient Protection and Affordable Care Act, which provided for an increase in the Medicare tax rate for certain high earners who are members of the ERISA "top hat" group, and recent discussions about the status of Social Security and Medicare funding, it is appropriate to review the rules in Sec. 3121(v)(2) governing FICA taxation.
Schedule UTP: Comparative Statistics Through the First Transition Year
This item provides an overview of the IRS's statistics on Schedule UTP through the first three tax years of filings.
Unexpected Consequences of Changes in Entity Classifications
When entities change their classification, several income tax issues that are not immediately apparent may come into play. When these issues are discovered, they may require amending tax returns and could result in tax penalties as well.
Automatic Recognition of Consolidated Return Filing Status Permitted
An affiliated group of corporations that did not file a consolidated return for the immediately preceding tax year may file a consolidated return in lieu of separate returns for the tax year under certain conditions.
Bringing Clarity to Fuel Excise Taxes and Credits
The federal excise taxes, tax credits, and exemptions for various types of fuel constitute a confusing area of the tax law. This item is intended to clear up much of the confusion faced by taxpayers and advisers alike when attempting to claim these tax credits.
Final Rules Issued on Employment Tax Responsibilities of Designated Payer Agents
Final regulations contain rules on the liability for employment taxes when an employer designates an agent under a “service agreement” to pay its employees and to satisfy its employment tax obligations instead of following normal IRS procedures to designate an agent.
New Procedure Permits Automatic Recognition of Consolidated Return Filing Status
The IRS announced that it will permit an affiliated group of corporations that did not file the required Form 1122 for all of its subsidiaries to be treated as if its subsidiaries had filed Form 1122.
Heightened Emphasis on Worker Classification
Worker classification has been a major concern for many years. While it is clear that government agencies recognize that worker misclassification is a significant problem, how to classify workers remains unclear.
