IRS Practice & Procedure

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June 1, 2013

Advising Clients Regarding Erroneous Tax Return Positions: Part I

This article examines the two somewhat different versions of the rule on advising clients regarding erroneous tax return positions—one applied by the AICPA and the other by the IRS.

June 1, 2013

Appeals Court Refuses to Lift Injunction in Return Preparer Regulation Case

The IRS lost another round in its court battle over its plan to regulate tax return preparers when the D.C. Circuit denied its motion to stay an injunction halting the IRS’s return preparer regulation program.

June 1, 2013

Tax Court Reverses Its Position on Valuation Misstatement Penalty; Supreme Court Agrees to Hear Case on the Issue

The Tax Court held that a taxpayer may not avoid application of the gross valuation misstatement penalty by conceding that adjustments made in an IRS FPAA notice were correct on grounds unrelated to valuation or basis.

June 1, 2013

IRS Expands Identity Theft Law Enforcement Assistance Program

The IRS has expanded its Law Enforcement Assistance Program on identity theft to all 50 states and the District of Columbia.

June 1, 2013

Promoting Fictitious Bonds for Tax Payments Leads to Conviction for “Sovereign Citizen”

A proponent of the “sovereign citizens” movement has been convicted of conspiracy to defraud the United States through a series of seminars in which attendees were taught to pay their federal income taxes by filing fictitious bonds.

June 1, 2013

Suspension of Tangible Property Capitalization Issue Examinations Extended

The IRS posted an updated directive for field examinations on the repair vs. capitalization issue that extends the suspension of examinations.

May 21, 2013

Oklahoma Tornado Victims Get Tax Filing and Payment Extensions

The IRS announced relief from filing and payment deadlines for victims of Monday’s destructive tornadoes in Oklahoma.

May 3, 2013

Final Rules Require EIN Updates

The IRS issued final regulations requiring taxpayers that obtain EINs to update their information with the IRS.

May 1, 2013

Statute of Limitation Tolled by Fraudulent Tax Returns

The Second Circuit held that the filing of fraudulent tax returns for a corporation by an accountant to embezzle money that was owed to the IRS was an intentional evasion of taxes that tolled the statute of limitation on assessment.

May 1, 2013

Prop. Regs. Allow Material Advisers to Request Extension

The IRS issued proposed regulations governing the penalty for failure of material advisers to provide lists of advisees in reportable transactions.

May 1, 2013

IRS Appeals Tax Return Preparer Registration Decision

The IRS filed a Notice of Appeal to the D.C. Circuit of the Jan. 18 district court decision that struck down the IRS’s registered tax return preparer program and enjoined it from enforcing the regulations.

April 30, 2013

AICPA Makes Tax Reform Recommendations to Ways and Means Committee Working Groups

The AICPA submitted recommendations for tax reform to five of the 11 working groups the House Ways and Means Committee has formed.

April 19, 2013

IRS Decides to Shut Down Completely on Furlough Dates

The IRS will close “all public-facing operations,” including toll-free operations and Taxpayer Assistance Centers, on five dates in response to the budget cuts from sequestration.

April 16, 2013

Witnesses Tell Senate Finance Committee Ways to Improve Tax System

Witnesses gave the Senate Finance Committee a variety of suggestions on how to fight tax identity theft and fraud, reform the tax system, and fund the IRS during a hearing on Tuesday.

April 11, 2013

Significant Decline in IRS Staff Leads to Fewer Audits

The IRS plans to expend 18% fewer staff hours auditing large businesses with assets of more than $10 million in fiscal year 2013.

April 8, 2013

Incorrect Expert Advice About Estate Return Filing Deadline Does Not Excuse Penalty

An executor who relied on his accountant’s mistaken advice that he had obtained a one-year extension of the filing due date for Form 706 was nonetheless liable for a large late-filing penalty.

April 1, 2013

U.S. Withholding Tax Requirements on Payments to Nonresidents and Foreign Entities

This item provides an overview of the types of income subject to U.S. withholding tax and related U.S. information reporting requirements.

April 1, 2013

Expanded Due-Diligence Requirements for 2012 Returns

This item discusses Form 8867, Paid Preparer’s Earned Income Credit Checklist, extensive new due-diligence requirements for wage earners, and Schedule C, Profit or Loss From Business

April 1, 2013

Is Tax Identity Theft Becoming an Epidemic?

As the primary resource for many client questions on both tax and IRS procedure, tax advisers should understand the issues surrounding identity theft.

April 1, 2013

Details of IRS Expanded Policy of Restraint Not Yet in IRM; Range of Applicability Unclear

Though the IRS in 2010 expanded its policy of restraint in requesting audit and tax accrual workpapers, it has not yet updated the Internal Revenue Manual to reflect those changes.