The IRS has demonstrated flexibility in its application of the rescission doctrine to unwind transactions.
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IRS Practice & Procedure
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Expanded 1099 Reporting Requirements Repealed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.
IRS Responds to AICPA Accounting Software Examination Letter
The AICPA and IRS have corresponded regarding the AICPA’s concerns about the Service’s program to request the accounting software files of certain small business taxpayers under examination
Supreme Court Strengthens Power of Interpretive Treasury Regs.
In the Mayo decision, the Supreme Court determined the level of deference owed to an interpretive Treasury regulation under which persons who work 40 hours or more per week are treated as employees rather than students for FICA purposes.
IRS Announces Changes to Lien Process
The IRS has announced a set of new policies designed to help taxpayers pay their back taxes and avoid liens. It also announced that it is making it easier for taxpayers to enter into an installment agreement and is expanding its streamlined offer in compromise program.
IRS Announces Tax-Exempt Bond Voluntary Closing Agreement Program
The IRS has announced a program to provide relief from debt extinguishment for certain issuers that purchase and hold their own tax-exempt bonds.
Violation of Public Policy and the Denial of Deductions
Recent events have drawn attention to the disallowance of deductions where allowing the deductions would violate public policy. This article discusses the disallowance of deductions under Sec. 162 and Sec. 165 for public policy reasons.
Schedule UTP: IRS Mandates Disclosure of Uncertain Tax Positions
This article explores the requirements of Schedule UTP, discusses modifications to the IRS’s policy of restraint pertaining to tax reconciliation workpapers, and suggests how to avoid the inadvertent waiver of the work-product privilege for documents relating to uncertain tax positions.
Day-Trading Losses Are Dissipation of Assets
The Tax Court held that a taxpayer’s losses from a period of day-trading activity constituted a dissipation of assets that the IRS could take into account in determining whether to accept the taxpayer’s offer in compromise.
Final Regs. Issued on Disclosing Return Information to Whistleblowers
The IRS released final regulations regarding the disclosure of return information by the Treasury Department in connection with written contracts among the IRS, whistleblowers, and, if applicable, their legal representatives.
Regulation of Tax Return Preparers
To improve the oversight of tax preparation by paid tax preparers, the IRS has established a registration, examination, and continuing education regime for paid tax preparers. This article discusses the general requirements under the regime and the specific rules and exceptions to the rules for CPAs.
Extended Period for Receiving Authorization to Disclose Return Information Proposed
The IRS issued a proposed regulation that would officially extend from 60 to 120 days the permitted period for submission of taxpayer authorizations allowing disclosure of returns and return information to third-party designees because some financial institutions have had difficulty obtaining and submitting written authorizations within the current 60-day limit.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
