Penalties apply for failure to report the information required under Secs. 6038 and 6038A by failing to timely file Form 5471, 5472, or 8865. There are two procedural paths for a taxpayer that files a late form.
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IRS Practice & Procedure
Special Deadline: Filing Amended Returns Reporting Tax Due Within 60 Days of Assessment Limitation
When a taxpayer files an amended return reporting additional tax within 60 days before expiration of the assessment limitation period, Sec. 6501(c)(7) provides that the period within which the IRS can assess the additional tax does not expire before the 60th day after the day on which it receives the amended return. This extension of the assessment limitation period applies only to the additional tax reported on the amended return.
Uncollectible Status: An Alternative Resolution
The IRS will designate a taxpayer’s account as “currently not collectible” under certain circumstances, removing the account from its active inventory. Having an account placed in uncollectible status allows the taxpayer to remain current in tax compliance without worrying about enforcement action and allows a taxpayer to recover from a financial setback.
IRS Has Fixed Many of Its Problems With Social Welfare Organization Applications
Two years after finding the IRS used inappropriate criteria when reviewing applications for tax–exempt status under Sec. 501(c)(4) and delayed processing some applications—a report that led to congressional investigations and the resignation of IRS Exempt Organizations Director Lois Lerner—TIGTA issued a follow–up report to check on the IRS’s progress in eliminating the controversial practices.
IRS to Limit Refunds and Credits of Foreign Withholding Payments
The IRS announced in Notice 2015–10 that it intends to amend its regulations to prevent taxpayers subject to withholding under chapter 3 or 4 of the Code from obtaining refunds or credits of withheld tax where a withholding agent failed to deposit the amounts required under Sec. 6302.
Designated Private Delivery Service Rules Are Updated
For the first time in over 10 years, the IRS updated the list of designated private delivery services (PDSs) that taxpayers can use to take advantage of Sec. 7502’s timely mailing equals timely filing/paying rule (Notice 2015–38). The notice also updates the timely filing rules that apply to designated PDSs.
TIGTA Finds IRS Failed to Answer Millions of Phone Calls This Tax Season
The number of taxpayer phone calls the IRS answered dropped significantly during this tax season, and call wait times were up, according to an interim report issued by the Treasury Inspector General for Tax Administration. TIGTA found that the IRS’s level of service (defined as the number of calls in the IRS’s toll–free assistance queue that are answered) dropped to 38.5%, compared with 74.7% last tax season.
Congress Makes Changes to Tax Code in Trade Preferences Act
The Trade Preferences Extension Act of 2015 contains tax provisions in addition to the trade measures that were the focus of the bill.
Tax Industry and IRS Team Up to Fight Identity Theft Refund Fraud
Tax software vendors will share analytical information about their customers’ tax filings with the IRS under new agreement announced by the IRS.
Tax Reform for 2015: One Step Forward, Two Steps Back?
The 114th Congress started with talk of comprehensive tax reform, but actions to date hint a different ending may be in store.
Expanded IRS Online Services Put Taxpayer Information at Risk, Senate Committee Told
By expanding its online services, the IRS is putting taxpayers’ data at greater risk, the Treasury Inspector General for Tax Administration told Congress.
Final Rules Govern Basis Reporting
The IRS issued final and temporary regulations that provide rules for brokers to report bond premium and acquisition premium as well as govern information reporting of transactions involving debt instruments and options, including the reporting of original issue discount on tax-exempt obligations, the treatment of certain holder elections for reporting a taxpayer’s adjusted basis in a debt instrument, and a new requirement to report transfers of Sec. 1256 options and debt instruments.
Final Rule Does Not Require PTIN Holders Be Told of Investigation
The Treasury Department issued a final rule that exempts it from having to reveal to holders of preparer tax identification numbers the names of agencies or individuals that have asked for their files.
Rules for the Assessment Period for Undisclosed Listed Transactions Are Clarified
The IRS issued final regulations regarding the exception to the general three-year assessment limitation period for listed transactions that a taxpayer did not disclose as required under Sec. 6011.
Thieves Access IRS Get Transcript App, 100,000 Accounts Compromised
The IRS announced on Tuesday that criminals have used taxpayer-specific information to gain access to approximately 100,000 taxpayers’ accounts through the IRS’s Get Transcript online application and steal those taxpayers’ data.
Tax Reform, Lower Rates Among Top Legislative Goals, Ryan Tells AICPA
Rep. Paul D. Ryan, R-Wis., outlined his priorities since taking over House Ways and Means Committee leadership to members of the AICPA’s spring Council meeting in Washington.
List of Designated Private Delivery Services Is Updated, Postmark Rules Revised
The IRS updated the list of designated private delivery services (PDSs) that taxpayers can use to take advantage of Sec. 7502’s timely mailing equals timely filing/paying rule.
IRS Modifies Rules for Filing Accounting Method Changes and Procedures for Taxpayers Under Examination
This item highlights the significant developments in rules for filing accounting method changes and procedures for taxpayers under examination.
Making a Valid Sec. 754 Election Following a Transfer of a Partnership Interest
It is not uncommon for a partnership to attempt to make a valid Sec. 754 election, only to find that it failed to satisfy regulatory requirements.
IRS Modifies Guidance on Distressed Debt Held by REITs
Recent IRS guidance modifies the rules for determining the value of a distressed mortgage that the taxpayer can include as a real estate asset for purposes of the REIT asset test.
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.
