IRS Practice & Procedure

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June 1, 2012

Section 530 Relief for Worker Classification Controversies

This article reviews the common law principles and authoritative guidance available to distinguish when workers are employees and the Section 530 safe-harbor provisions.

June 1, 2012

Mailbox Rule Does Not Apply Where Taxpayer Cannot Prove Mailing

The First Circuit dismissed a suit for refund of Federal Insurance Contributions Act (FICA) taxes Maine Medical Center mistakenly paid for its medical residents in the 2001 tax year.

May 23, 2012

IRS to Close Offices as Part of Administration’s Cost-Cutting Efforts

The IRS announced that 43 smaller offices will be closed and space in many larger facilities will be reduced

May 22, 2012

Offer in Compromise Rules Made More Flexible in Expansion of Fresh Start Program

The IRS announced that it is making the terms under which it will accept offers in compromise more flexible.

May 8, 2012

TIGTA and Congress Focus on Identity Theft and Tax Fraud

The House Ways and Means Oversight and Social Security Subcommittees held a hearing on tax fraud involving identity theft and TIGTA released a report saying the IRS does not handle identity theft issues well.

May 3, 2012

Terms in OIC Agreement Take Meaning From Code, Court Holds

The Second Circuit held that the terms “refund” and “overpayment” in an OIC agreement are specialized tax terms that take their meaning from the Code and are not given their “plain English” meanings, despite the colloquial tone of the agreement.

May 2, 2012

Basis Reporting Rules for Debt Instruments and Options Postponed for One Year

The IRS postponed the basis and gain reporting rules under Secs. 6045(g), 6045(h), 6045A, and 6045B for debt instruments and options, so they will apply to those acquired on or after Jan. 1, 2014.

May 1, 2012

Accuracy-Related Penalty Tested in Five Recent Cases

In five recent cases, the Tax Court tested the defenses of various taxpayers to the imposition by the IRS of accuracy-related penalties for substantial understatements of income tax.

May 1, 2012

Interpretations of SSTS No.1, Tax Return Positions

Recently issued revised and updated interpretations of the AICPA’s SSTS No.1, Tax Return Positions, provide guidance to practitioners on tax reporting standards when recommending return positions or preparing or signing returns.

May 1, 2012

Due Diligence Update

This column discusses the tax professional’s due-diligence obligations under SSTS No. 3 and Circular 230.

May 1, 2012

Taxpayers to Be Required to Update EIN Information

The IRS issued proposed regulations that would require taxpayers that obtain employer identification numbers (EINs) to update their information with the IRS.

May 1, 2012

Filing False Tax Return Leads to Deportation Charge

The Supreme Court held that filing a false tax return or aiding and abetting in the preparation of a false tax return are offenses that can subject permanent resident aliens to deportation as aliens who have been convicted of an aggravated felony.

May 1, 2012

Payroll Tax Cut Extended; New Form 941 Released

President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012. The IRS released a revised Form 941 to reflect the extended payroll tax cut.

May 1, 2012

Penalty Relief for the Unemployed Under Expanded “Fresh Start” Initiative

The IRS announced an expanded “Fresh Start” initiative March 7 to help struggling taxpayers with a number of measures for relief.

April 27, 2012

IRS Proposes Expanding Tax Return Information It Will Disclose to HHS Under Health Care Acts

The IRS issued proposed regulations relating to how it will release certain tax return information to the Department of Health and Human Services, as required by 2010’s health care legislation.

April 26, 2012

Congressional Subcommittee Hearing Centers on Expiring Tax Provisions

Witnesses told the House Ways and Means Select Revenue Subcommittee why particular tax breaks should be extended or made permanent in a hearing on April 26.

April 25, 2012

Supreme Court Affirms That 6-Year Limitation Period Does Not Apply to Overstated Basis

The Supreme Court affirmed that the extended six-year statute of limitation, which applies when a taxpayer “omits from gross income an amount properly includible” in excess of 25% of gross income, does not apply when a taxpayer overstates its basis in property it has sold.

April 20, 2012

Federal Circuit Dismisses Refund Suit Based on All-Zero Returns

A married couple who filed tax returns listing all income and tax due as “zero” were denied refunds in a decision by a U.S. Court of Appeals.

April 3, 2012

TIGTA Recommends Improvements to IRS Cybersecurity System

TIGTA reports that the IRS’s computer security response center is performing effectively, but further improvement is needed.

April 2, 2012

Medical Center’s FICA Refund Claim Dismissed as Untimely

The First Circuit dismissed a suit for refund of FICA taxes, upholding a lower court determination that discovery requests were not warranted and that the information sought from the IRS would not have proved that the refund claim, which the IRS claimed it never received, was timely.