The IRS announced various tax relief measures for individuals and businesses affected by Hurricane Sandy in Connecticut, New Jersey, and New York.
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TOPICS
Individuals
Employee-Stockholder’s Unpaid Loan Balance
Whether a taxpayer can claim a business bad debt or a nonbusiness bad debt is particularly important and can lead to a different result on the tax return.
Dependency Exemption Requirement for Children Born Abroad
Issues can arise as to when the citizenship test of Sec. 152(b)(3)(A) must be satisfied to claim children as dependents.
Prop. Regs. Limit Conditions Resulting in Substantial Risk of Forfeiture Under Sec. 83
The IRS issued proposed regulations (REG-141075-09) to clarify specifically which conditions result in a substantial risk of forfeiture under Sec. 83.
Medicare Premium Deduction for Self-Employed Individuals
The IRS Chief Counsel’s Office clarified that all Medicare premiums are insurance constituting medical care and may be deducted under Sec. 162(l) as an above-the-line deduction by self-employed individuals.
Supplemental Unemployment Compensation Benefits Not Subject to FICA
The Sixth Circuit held that supplemental unemployment compensation benefit payments were not wages for FICA purposes and therefore not subject to FICA.
Compensation and Benefits Update: Retirement Plans and Executive Compensation
This article focuses on recent changes affecting qualified retirement plans and executive compensation.
Handling Expenses Incurred in Acquiring a Residence
A homebuyer’s various settlement and closing costs may be deductible, capitalizable (added to basis), or, in some cases, neither.
A Powerful Learning Tool: Lessons From an Exam Reflection Assignment
Reflection is a valuable learning tool for the classroom and for professionals in practice: Both groups can learn from reflecting on their successes and failures and the steps that led to these outcomes.
Employee Expense Reimbursement Arrangement Guidance Issued
The IRS issued guidance on employee reimbursements and whether they satisfy the business connection and other requirements to be treated as paid under an accountable plan under.
IRS Announces Inflation Adjustments for 2013
The IRS released its annual revenue procedure making inflation adjustments to the gift tax annual exclusion and other items for tax years beginning in 2013.
Ponzi Schemes, Clawbacks, and the Claim of Right Doctrine
Many people who lost money in Ponzi schemes are later told by a bankruptcy trustee that they were “net winners” and are required to pay back past withdrawals to be redistributed to the larger pool of victims.
Taxpayer Liable for Willful Violation of FBAR Requirements
The Fourth Circuit held that a taxpayer had willfully violated the foreign bank account reporting requirements for two foreign bank accounts.
IRS Permits Charitable Contributions to Single-Member LLCs
The IRS explained that contributions to disregarded SMLLCs wholly owned and controlled by a U.S. charity will be treated as if made directly to the U.S. charity.
Prop. Regs. Clarify Who Is Subject to Limit on Meal and Entertainment Expenses
The IRS released proposed regulations clarifying which party is subject to the rule that limits the deduction for meals and entertainment to 50% of the expenses incurred.
Taxpayers Not Insolvent for Purposes of Sec. 108 Exclusion
The Tax Court held that a married couple had failed to prove the FMV of their two homes and the husband’s pension and thus could not prove they were insolvent.
Taxpayer Cannot Revive Equitable Innocent Spouse Claim
A U.S. District Court dismissed a taxpayer’s claim that she was entitled to innocent spouse relief under Notice 2011-70, which announced the removal of the two-year limitation period for claims for equitable innocent spouse relief under Sec. 6015(f).
Special Per Diem Rates Updated for 2012–2013
The IRS issued the annual update of special per diem rates for use in substantiating certain business expenses taxpayers incur when traveling away from home.
Guidance Issued on Employee Expense Reimbursement Arrangements
The IRS issued guidance on situations in which employers recharacterize wages as nontaxable reimbursements and whether they met the requirements to be treated as paid under an accountable plan.
Deducting Losses on Worthless Investment Securities
Understanding the rules for deducting losses on worthless securities is necessary to determine the correct timing of the loss deduction.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
