The IRS issued final regulations governing the due-diligence requirements imposed on tax return preparers who prepare tax returns on which taxpayers claim the earned income tax credit.
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IRS Practice & Procedure
ODC Tax Liability and Audit Information Cannot Be Disclosed
The Federal Circuit held that audit tests and related information of third-party taxpayers pertaining to the assessment of the ozone-depleting chemicals excise tax was return information not subject to disclosure under Sec. 6103(a).
IRS Regulations Broaden Disclosures of Tax-Exemption Determinations
The IRS issued final regulations regarding disclosure of denials and revocations of tax-exempt status.
Correspondence Audits Need Some Work, Tax Community Tells IRS
Correspondence audits were the subject of a public hearing by the IRS Oversight Board.
FinCEN Postpones Mandatory FBAR E-Filing
FinCEN announced that it is postponing until July 1, 2013, its requirement that FBARs be filed electronically.
Supreme Court: Filing a False Tax Return Can Lead to Deportation
The Supreme Court held that a conviction under Sec. 7206 for willfully filing a false tax return (or for aiding and abetting filing a false tax return) is an aggravated felony that can result in deportation.
IRS Proposes PTIN Regs. for Supervised, Nonsigning and Non-1040 Preparers
The IRS issued proposed regulations regarding the availability of PTINs for supervised nonsigning preparers and for preparers of forms other than Form 1040. They also address what tax forms are considered returns for purposes of the PTIN rules.
President’s Budget Proposes AMT Elimination, Tax Reform
President Barack Obama unveiled his proposed budget for FY 2013. It includes several tax reform proposals, including plans to eliminate the AMT, to repeal LIFO, and to tax dividends of high-income taxpayers at ordinary income rates.
TIGTA: Revise Form 1099-R to Improve Taxpayer Compliance
TIGTA recommended the IRS change its Form 1099-R to improve taxpayer compliance with reporting and paying tax on retirement income
Couples Who Filed Joint Returns Must Now File Separate Powers of Attorney
The new version of the IRS power of attorney form requires a husband and wife who filed a joint tax return to each file a separate power of attorney on separate forms to designate the representative he or she chooses, even if it is the same person.
Integrating Circular 230 into the Tax Curriculum: Appendix
This appendix provides a more detailed suggested solution to the five questions presented in the Feb. 2012 Campus to Clients column.
Government Contractor Withholding Repealed and Veterans Job Credits Enacted
President Barack Obama signed into law repeal of a requirement that 3% of payments to any person for services or property be withheld by the federal or state governments or their instrumentalities or subdivisions (including multistate agencies).
IRS Nonacquiesces to Tax Court Fraud Holding
The IRS nonacquiesced to the Tax Court’s decision in Norris because the IRS believes that the Tax Court improperly used a “rigid” 11-factor test to determine the existence of fraud instead of making the determination by considering the taxpayer’s entire course of conduct.
Integrating Circular 230 into the Tax Curriculum
Circular 230 is crucial to tax education because it forms the ethical standards of tax practice. Students who plan to become tax practitioners must become well acquainted with Circular 230 along with the underlying laws and regulations governing tax practice.
Circular 230: Its Day-to-Day Impact on Tax Practices
While discussions about Circular 230 usually focus on the standards it imposes relating to tax returns and opinions, the breadth and scope of Circular 230 also regulates the day-to-day business operations of tax practitioners relating to fees, client solicitations, marketing and advertising, and the management of client files and records.
IRS Launches Worker Classification Settlement Program
The IRS unveiled a program that allows taxpayers to voluntarily reclassify independent contractors as employees and pay significantly reduced prior employment taxes, with no penalties or interest.
Streamlined Installment Agreement Program Modified
The IRS Small Business/Self-Employed Division modified the maximum unpaid balance of assessment taxpayers must meet to qualify for its streamlined installment agreement program and extended the time for payment.
IRS: Tax Preparers Who Want to Prepare 2011 Returns Must Renew PTINs
The IRS is sending information letters to tax return preparers who have not yet renewed their preparer tax identification numbers (PTINs) for the 2012 filing season.
Annual Update on Adequate Disclosure of Return Positions Issued
The IRS released updated guidance identifying when a taxpayer’s disclosure of an item or position in an income tax return is adequate for purposes of reducing the understatement of tax penalty and the tax return preparer penalty for understatement due to unreasonable positions.
IRS Gives Transitional Relief to Form 8937 Filers
The IRS announced that, due to its late release of the required form, it will not impose penalties on issuers of stock who report incorrect 2011 information required under Sec. 6045B, as long as they make a good-faith effort to timely comply with the requirements.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
