IRS Practice & Procedure

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November 14, 2012

Modernized e-File Is Improving, but IRS Can’t Retire Legacy System Yet

TIGTA reported on the IRS’s progress in retiring its Legacy e-File system and moving to the Modernized e-File (MeF) system.

November 13, 2012

How Can the Nonpayment Testing Period for COD Income Be Improved?

The IRS asked for comments on whether it should amend existing the rules that require applicable financial entities to issue Forms 1099-C reporting COD income when a 36-month nonpayment testing period has expired.

November 6, 2012

One-Time Abatement of $5,000 Frivolous Filing Penalty Announced

Taxpayers who have filed all required tax returns and paid all outstanding tax liabilities, including penalties (except for the Sec. 6702 penalty) and related interest, may qualify for a one-time reduction to $500 of any unpaid penalties that the IRS has assessed.

November 2, 2012

IRS Extends Deadlines, Provides Relief for Hurricane Sandy Victims

The IRS announced various tax relief measures for individuals and businesses affected by Hurricane Sandy in Connecticut, New Jersey, and New York.

November 1, 2012

Consequences of Not Filing Go Beyond the Nonfiling Penalty

The Tax Court denied a deduction for a claimed theft loss because the taxpayer had not filed a tax return for the year of loss and thus did not make a proper election to itemize deductions.

November 1, 2012

Treatment of Identity Theft Returns Clarified

The IRS Office of Chief Counsel explained what the IRS can do when a return is filed by an identity thief and the IRS has issued a statutory notice of deficiency based on that fraudulent return.

November 1, 2012

IRS Modifies Position on Frozen Refundable Credits and the Substantial Understatement Penalty

The IRS announced that it will no longer impose a substantial understatement penalty when a taxpayer claims a refundable tax credit he or she is not entitled to, but the IRS does not pay the refund or approve the credit.

November 1, 2012

Taxpayer Advocate Service Will No Longer Accept Certain Cases

The Taxpayer Advocate Service changed its criteria for accepting individual taxpayer cases for assistance, reducing the instances in which it will accept cases.

November 1, 2012

IRS Nonacquiesces to 47-Year-Old Case

The IRS announced it will not follow the decision in International Business Machines Corp. in which the Court of Claims held that the IRS could only apply an adverse ruling prospectively if applying it retroactively would treat the taxpayer who requested the ruling differently from a taxpayer who received a favorable ruling on the same subject.

October 31, 2012