This column describes mock Tax Court: An exercise that has assisted students in improving their communication and analytical skills and has proven instrumental in helping them prepare for their professional careers in accounting.
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TOPICS
Individuals
Planning for the Unearned Income Medicare Contribution Tax
The unearned income Medicare contribution tax is scheduled to come to life at the end of next year, and it may have a significant impact on some taxpayers.
Practitioners, Policymakers Welcome IRS Change on Innocent Spouse Relief
Tax practitioners, legislators, and taxpayer advocates said the IRS’ announcement that it would no longer require taxpayer requests for innocent spouse equitable relief under Sec. 6015(f) to be made within two years of the beginning of collection activity was a long overdue change.
IRS Relents on Two-Year Limit on Innocent Spouse Equitable Relief
After winning appeals in three federal circuit courts of its two-year limit for requesting equitable innocent spouse relief, the IRS said on July 25 it will no longer observe that deadline.
IRS Discontinues High-Low Method for Substantiating Travel Expenses
The IRS announced that it is discontinuing the high-low method for substantiating lodging, meal and incidental expenses incurred in traveling away from home.
Tax Court Allows Deduction for Payment to Long-Term Caregivers
The Tax Court held that payments made to an elderly woman’s caregivers for personal care that she required due to her diminished capacity qualified as long-term care services and were therefore deductible.
Basic Bankruptcy Treatment of Income Tax for Individuals
This item attempts to clarify whether income taxes can be dismissed in bankruptcy and discusses certain aspects of bankruptcy and other options that CPAs need to be aware of in order to best represent their individual clients.
Planning for the New 3.8% Medicare Tax on Unearned Income
Effective in 2013, the Health Care and Education Reconciliation Act of 2010 will subject some individuals to a 3.8% Medicare contribution tax on unearned income. This article discusses strategies taxpayers can use to minimize the tax.
IRS Addresses Tax Treatment of Tax-Free Exchanges of Annuities
The IRS has given taxpayers guidance on the tax treatment of exchanges of annuity contracts under Secs. 72 and 1035.
IRS Raises Standard Mileage Rate for Second Half of 2011
In response to rising gasoline prices, the IRS has raised the standard mileage rate for business use of an automobile from 51 cents per mile to 55½ per mile, effective July 1.
Fourth Circuit Upholds Two-Year Innocent Spouse Limitation Period
The Fourth Circuit overturned a Tax Court decision and upheld a Treasury regulation that sets a two-year statute of limitation on claims for innocent spouse relief.
Foreign Disregarded Entities May Face U.S. FICA Tax Issue
This item shows how restructuring international businesses to operate through entities disregarded for U.S. federal income tax purposes may also affect the employment tax treatment of the organization’s individual employees.
Expense Does Not Qualify as Compensation but Does Qualify as Theft Loss
The Tax Court held that amounts that an abusive man took from his live-in girlfriend’s business did not qualify as deductible compensation expenses but did qualify as deductible theft losses.
Individual Taxation: Digest of Recent Developments
This article covers recent developments affecting taxation of individuals, including last year’s tax relief and small business legislation, regulations, cases, and IRS guidance. The items are arranged in Code section order.
Lack of Control Does Not Except Owners from Trust Fund Recovery Penalty
The owners of a company who had delegated payroll functions to a separate payroll company they owned but did not operate were liable for trust fund recovery penalties because they were responsible persons both before and after the withholding taxes that were the basis of the penalties accrued.
Innocent or Not: Let the Factors Decide
Three forms of innocent spouse relief are available under Sec. 6015. This article discusses the three forms of relief, the substantive requirements for qualifying for each, and the time period in which a taxpayer must file his or her request for relief.
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.
IRS Gives Relief for Late Elections to Combine Real Estate Activities
The IRS established a special procedure by which taxpayers can make a late election to treat all their real estate activities as a single activity for purposes of meeting material participation rules.
Capital Gain Exclusion on Small Business Stock
The Small Business Jobs Act of 2010 allows 100% exclusion from gross income of capital gains from the sale of certain qualified small business stock (QSBS). The deadline has been extended to January 1, 2012.
Interest on Home-Equity Indebtedness
The IRS ruled that a taxpayer can deduct as qualified residence interest up to $1.1 million of the debt securing the purchase of a taxpayer’s principal residence.
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.
