IRS Practice & Procedure

TOPICS

November 1, 2011

Patent Reform Act Stops New Tax Strategy Patents

On September 16, President Barack Obama signed into law the Leahy-Smith America Invents Act, which reforms the U.S. patent system and stops the granting of patents for tax strategies.

November 1, 2011

Accounting Software Examination Guidance Issued, IRS Meets with AICPA

The IRS Small Business/Self-Employed Division has issued guidance for its field examiners on when to request backup files of taxpayers’ accounting software during an examination, what the limits are on reviewing those electronic files, and how examiners must safeguard those records.

October 28, 2011

IRS Gives Penalty Relief, Delays Backup Withholding for Payment Card Reporting

The IRS postponed for a year the effective date of the backup withholding requirement for payments in settlement of payment card and third-party network transactions.

October 28, 2011

AICPA Expresses Concerns and Requests Review of Procedure Regarding Release of PTIN Holder Information

The AICPA’s Tax team has had, and continues to have, numerous conversations with IRS regarding its recent release of PTIN holder information.

October 21, 2011

President Signs Bill Increasing EITC Due Diligence Penalty

President Barack Obama signed into law a bill that increases from $100 to $500 the penalty for failure by preparers to exercise due diligence with respect to the EITC.

October 20, 2011

Inflation Adjustments Made to Many Tax Items for 2012

The IRS released its annual revenue procedure making inflation adjustments to the income tax tables and many tax credits and other items for tax years beginning in 2012.

October 20, 2011

PTIN System Opens for 2012 Renewals

The IRS on October 20 announced that it has opened its preparer tax identification number (PTIN) registration system to accept renewals for the 2012 filing season

October 14, 2011

Estate Tax Protective Claim Procedures Detailed

The IRS issued guidance on filing a protective claim for refund of estate tax and notifying the IRS that the claim is ready for consideration.

October 13, 2011

Trade Bills Pass Congress with Tax Provisions

The EITC due diligence penalty will increase to $500 under a bill passed by Congress Oct. 12.

October 12, 2011

TIGTA Finds Problems with IRS Purchase Cards, Network Security

TIGTA released a pair of reports finding problems with the security of the IRS Windows environment and a lack of control over IRS purchase cards.

October 7, 2011

Practitioners Raise Concerns About Fingerprinting Proposal at IRS Hearing

The IRS heard a consistent chorus at an October 7 hearing on proposed fees for fingerprinting of registered tax return preparers and nonsigning staff at CPA firms: The IRS’ proposal is duplicative, expensive, and can be done in a better way.

October 6, 2011

IRS Proposes Stiffer Preparer Requirements for EITCs

The IRS issued proposed regulations that would impose new requirements for tax return preparers and their firms for returns claiming the earned income tax credit (EITC), including submission of information regarding taxpayers’ eligibility to the IRS.

October 1, 2011

Internal IRS Guidance Released on the Application of the Economic Substance Doctrine

The IRS issued an important directive to its examiners on how the codified economic substance doctrine and the new penalty associated with it should be applied to cases in the field (LB&I-4-0711-015).

October 1, 2011

How to Benefit from the Internal Revenue Manual

Knowledge of IRS procedures documented in the Internal Revenue Manual can help tax practitioners in many areas.

October 1, 2011

Statute of Limitation: Individuals and U.S.-Source Income

This item describes some of the unusual situations that arise under federal income tax statutes of limitation.

October 1, 2011

Sec. 1031 Related-Party Exchanges and Basis Shifting

The Code provides a number of related-party exceptions designed to circumvent certain abuses, the most prevalent of which is basis shifting. This item discusses ways that practitioners can avoid basis-shifting problems.

October 1, 2011

Use of Private Delivery Services to Provide Evidence of Delivery to the IRS

The IRS issued final regulations providing guidance on how taxpayers can prove the timely delivery of physical documents to the IRS and the Tax Court, absent direct proof of delivery (T.D. 9543).

October 1, 2011

IRS PTIN Renewal Process Opens in October

Beginning in October 2011, the IRS PTIN database will be available for CPAs (and their employees) to obtain or renew their PTINs for the 2012 filing season.

September 30, 2011

IRS Updates, Clarifies Travel Allowances, Reinstates High-Low Method

The IRS issued an update and new guidance for use of a federal per diem rate to substantiate the amount of ordinary and necessary expenses for lodging, meals and incidental costs paid or incurred for business-related travel away from home.

September 22, 2011

IRS Issues Guidance on Fingerprinting, Other Registered Tax Return Preparer Details

The IRS provided more details September 22 of its still-developing requirements for all paid tax return preparers to be registered and undergo a background check, to include fingerprinting.