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).
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TOPICS
IRS Practice & Procedure
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.
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.
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.
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).
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.
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.
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.
IRS Offers Voluntary Employee Reclassification Program
Employers may reclassify independent contractors as employees and limit the resulting federal payroll taxes for their most recent tax year, plus avoid related penalties and interest for prior years, under an IRS program announced September 21.
President Signs Patent Reform Bill Banning New Tax Strategy Patents
President Barack Obama signed into law the Leahy-Smith America Invents Act (H.R. 1249), which reforms the U.S. patent system and stops the granting of patents for tax strategies.
President’s Jobs Bill Contains Many Tax Proposals
The president submitted his American Jobs Act to Congress on September 12, and among its provisions are several tax items, including a temporary payroll tax cut, a limit on itemized deductions for certain high-income taxpayers, and a proposal to tax carried interests as ordinary income rather than capital gains.
IRS Issues Accounting Software Examination Guidance, Meets with AICPA
The IRS Small Business/Self-Employed Division 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.
Congress Passes Tax Patent Reform; Sends Bill to President
The Senate passed the America Invents Act which now goes to President Barack Obama for his signature. The act reforms the U.S. patent system, and among its provisions is one intended to stop the granting of patents for tax strategies.
Reportable Transaction Penalty Gets Final Regulations
The IRS issued final regulations, governing the Sec. 6707A penalty regime for failure to report reportable transactions, to reflect changes made by the Small Business Jobs Act.
IRS Expands Hurricane Irene Relief
The IRS expanded its Hurricane Irene relief to include four counties in Vermont, after the president declared those counties federal disaster areas.
Information Reporting Requirements Affect Corporations and Transferors of Securities
This item discusses new information reporting requirements that affect brokers, professional transfer agents, trustees, and also corporations undertaking actions in their own stock and acting as transfer agents for their own securities.
Final Regs. Governing Practice Before the IRS
Treasury issued final regulations governing practice before the IRS to increase taxpayer compliance and to ensure uniform and high ethical standards of conduct for all tax return preparers.
Taxpayers Hit by Irene Get Postponement
Taxpayers in certain areas affected by Hurricane Irene have until October 31 to file certain returns and make payments normally due before then, the IRS announced September 1.
Hurricane Postpones IRS’s Offshore Voluntary Disclosure Deadline
The IRS announced it had postponed the deadline for its 2011 Offshore Voluntary Disclosure Initiative (OVDI). The new due date for requests is September 9, 2011.
TIGTA: IRS Does Not Timely Resolve Math Error Disputes
TIGTA released a report in which it recommended that the IRS develop processes to ensure that math error disputes with taxpayers are resolved more quickly and accurately.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
