The Tax Court ruled that the doctrine of res judicata did not bar a taxpayer from claiming net operating loss (NOL) carrybacks to 1999 and 2000, despite a prior deficiency case involving those years, because the statutory scheme for NOL carrybacks includes Sec. 6511(d)(2)(B) (i), which allows a refund attributable to an NOL carryback notwithstanding “the operation of any . . . rule of law,” which includes res judicata.
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TOPICS
Individuals
Deducting Donated Services and Out-of-Pocket Expenses
A taxpayer who has limited resources but wants to make a deductible charitable contribution has limited options. While a deduction is not allowed for the value of charitable volunteer work, unreimbursed expenses may be deductible.
CPA Exam Aligns with Model Tax Curriculum
The content of the Uniform CPA Examination has been updated and now reflects many of the recommendations of the Model Tax Curriculum.
Changes to Estimated Tax Payment Requirements
For 2009 tax years, the American Recovery and Reinvestment Act instituted changes to the rules governing the amount of estimated tax that individual taxpayers with income from small businesses must pay.
Individual Taxation Report
This article covers recent significant developments affecting taxation of individuals, including cases, IRS guidance, and legislative changes.
Income from Sales or Settlements of Life Insurance Contracts
The IRS has provided guidance on the amount and character of income that taxpayers recognize in the surrender or sale of life insurance contracts and has provided guidance to purchasers of life insurance contracts for profit.
IRS Further Clarifies WOTC “Disconnected Youth” Definition
The IRS released a notice defining the terms “unemployed veteran” and “disconnected youth” for purposes of the Sec. 51 work opportunity tax credit.
Sec. 83 in the Context of Contract Manufacturing
Sec. 83 may be applied to successfully defer and possibly reduce taxable compensation to independent contractors, including contract manufacturers.
Personal Intangibles: The Antichurning Rules
In the process of selling the business of a closely held C corporation, the concept of the sale of personal intangibles should be considered in structuring the transaction.
Chief Counsel Outlines Litigation Tactics for Innocent Spouse Cases
The IRS Chief Counsel’s office has released a memorandum outlining IRS litigation tactics in innocent spouse cases (CC-2009-021).
Deferring Shareholder Gain by Distributing Installment Notes
When a C corporation sells some or all of its assets during the process of liquidation and takes back one or more installment notes as payment, it must recognize, in the year of liquidation, all unrecognized gains on installment receivables distributed to the shareholders (Secs. 336 and 453B(a)).
Two Recent Revenue Rulings Clarify Tax Treatment of Life Settlements
The IRS issued two revenue rulings discussing the taxation of life settlement transactions. Rev. Rul. 2009- 13 clarifies the tax implications of the surrender or sale of a life insurance policy by the original policyholder, while Rev. Rul. 2009-14 discusses the tax ramifications of certain transactions to an investor who has purchased a life insurance contract through a life settlement transaction.
Tax Planning for Troubled Debt
Today’s volatile real estate environment presents interesting opportunities for investors and developers to alter the terms of their debts in ways that may pay off if they can retain control of their projects.
Making the Most of the IRA Required Minimum Distribution Holiday
The Worker, Retiree, and Employer Recovery Act of 2008 waives, for 2009 only, the required minimum distribution (RMD) rules applicable to retirement plan withdrawals, thereby allowing retirees to forgo a year’s distributions.
Deducting Ponzi Scheme Losses: Practical Issues
In March 2009, the IRS issued Rev. Rul. 2009-9 and Rev. Proc. 2009-20, which provided guidance on the tax treatment of theft losses from Ponzi-type schemes.
The American Recovery and Reinvestment Act’s Energy Provisions for Individuals
The American Recovery and Reinvestment Act of 2009 provides energy incentives for individuals.
Deductibility of Bankruptcy Costs and the Origin of the Claim
Costs incurred in a bankruptcy filing can be categorized as either personal or business related. A taxpayer cannot deduct those categorized as personal expenses but can deduct those categorized as business expenses.
Exclusion for Income from Discharge of Indebtedness: Mortgage Debt Forgiveness
The Mortgage Forgiveness Debt Relief Act of 2007 provides an exclusion from income for the discharge of indebtedness (DOI) on a qualified principal residence. The exclusion is effective for home mortgage debt discharged between January 1, 2007, and December 31, 2012.
The Long Arm of Community Property Laws
The impact of community property laws on tax issues is vast and complex. Advisers must be mindful of this when learning about their clients, whose geographical history may be as important to consider as their financial and business background.
New Car Buyers in States with No Sales Tax Can Still Take Sales Tax Deduction
The IRS announced that new car buyers in states with no sales tax are entitled to take the new car sales tax deduction under Sec. 164(b)(6).
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.
