To comply with requirements of the Dodd-Frank Act, the IRS has issued temporary and proposed regulations that remove all references to “credit ratings” from the Treasury regulations.
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IRS Practice & Procedure
IRS Challenges Noted by Oversight Board
The IRS Oversight Board described the IRS’s performance during FY 2010, its progress in meeting its goals, and the challenges the IRS has faced in recent years in administering new tax laws enacted to provide economic relief during the recession.
Truncated Social Security Number Program Extended
The IRS announced that it is extending and modifying a pilot program allowing filers of certain paper information returns to truncate the payee’s Social Security number on the payee statement.
The Administration’s Fiscal-Year 2012 Revenue Proposals
This column reviews proposals for the FY 2012 U.S. federal budget, with a focus on a number of tax administration initiatives being proposed by the Obama administration.
Memo Addresses Treatment of Fraudulently Altered Returns
The Office of Chief Counsel advised on a number of issues regarding returns where a preparer, after issuing the taxpayers refund anticipation loans, increased the amount of the charitable contribution deductions claimed on the returns without the taxpayers’ knowledge or consent to increase the refund received from the IRS.
IRS Finalizes Automatic Five-Month Extension for Partnership, Trust and Estate Returns
Final regulations set the time for automatic extensions of partnership, trust and estate income tax returns at five months (T.D. 9531). Under this rule, the extended returns and Schedules K-1 for partners and beneficiaries will generally be due September 15.
House Passes Bill with Tax Patent Provision, Sends Back to Senate
The House of Representatives passed the America Invents Act (H.R. 1249), which includes a provision intended to stop the granting of patents for tax strategies.
IRS Publishes Interim Guidance on Stock Basis Reporting
On June 22, the IRS issued interim guidance on issues relating to the basis of stock subject to broker reporting.
Fourth Circuit Upholds Two-Year Innocent Spouse Limitation Period
The Fourth Circuit overturned a Tax Court decision and upheld a Treasury regulation that sets a two-year statute of limitation on claims for innocent spouse relief.
Why the Flap Over a VAT?
This item provides a view of issues that would need to be considered if the United States were to consider adopting a value-added tax (VAT) at the federal level.
The Current State of the Rescission Doctrine
The IRS has demonstrated flexibility in its application of the rescission doctrine to unwind transactions.
Revenue Procedure Attempts to Clarify Entity Classification Election
For federal tax purposes, certain entities can elect passthrough tax treatment by simply checking the box. As this item points out, checking the box for passthrough treatment is not so simple if the taxpayer is uncertain about whether the entity has more than one member.
Expanded 1099 Reporting Requirements Repealed
The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 repeals both the expanded Form 1099 information reporting requirements mandated by last year’s health care legislation and also the 1099 reporting requirements imposed on taxpayers who receive rental income enacted as part of last year’s Small Business Jobs Act.
IRS Issues Final Regs. and Guidance on Mandatory E-Filing Requirements
The IRS issued final regulations and several pieces of guidance relating to the requirement that return preparers e-file tax returns, starting this year. The final regulations require specified tax return preparers to e-file if they reasonably expect to file 100 or more income tax returns in 2011.
Lack of Control Does Not Except Owners from Trust Fund Recovery Penalty
The owners of a company who had delegated payroll functions to a separate payroll company they owned but did not operate were liable for trust fund recovery penalties because they were responsible persons both before and after the withholding taxes that were the basis of the penalties accrued.
IRS Finalizes Circular 230 Regulations
The IRS issued final regulations May 31 implementing components of its initiative to register and regulate all paid tax return preparers.
Treasury Releases Plan to Review All Regulations
The Treasury Department on May 26 released a plan to review all existing Treasury regulations and identify those that are “obsolete, unnecessary, excessively burdensome, or ineffective.”
Tax Court Gives Some Petitioners Extra Time to File Motions to Vacate
During the transition to its new eAccess electronic document management system, the Tax Court failed to serve a small number of petitioners with paper or electronic notices of the documents concluding their cases (such as final decisions or orders of dismissal).
Oversight Board Identifies IRS Problems
The IRS Oversight Board released its annual report to Congress on May 12, describing the IRS’ performance during fiscal 2010 and its progress in meeting the goals in its strategic plan.
Government Contractor Withholding Delayed to 2013
The IRS issued final regulations further postponing implementation of mandatory 3% withholding on payments from government entities to contractors and providing interim guidance.
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.
