Commissioner Shulman urged Congress to pass tax legislation before the start of the next tax season. Shulman focused on the alternative minimum tax (AMT) patch and the extension of various income tax incentives for individuals.
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TOPICS / PROCEDURE
Tax Planning; Tax Minimization
IRS Issues Final Regulations on Stock Basis Reporting Requirements
The IRS issued final regulations regarding a new requirement for reporting of basis and other information by stockbrokers and mutual fund companies.
Is Your Contractor Really Independent?
This item provides an overview of the factors examined by the IRS and offers insight into how to better secure independent contractor status.
Like-Kind Exchange Relief for Taxpayers Snared by Bankrupt Qualified Intermediaries
The IRS has finally provided a safe-harbor method to report gain or loss by taxpayers who are unable to complete a deferred like-kind exchange solely due to a qualified intermediary (QI) who defaults on its obligation to acquire and transfer replacement property.
Regs. Limiting Period for Filing Innocent Spouse Claim Held Valid
Reversing the Tax Court, the Seventh Circuit held that the two-year limitation period for filing an equitable innocent spouse claim under Sec. 6015(f) in Regs. Sec. 1.6015-5(b)(1) was valid.
Lack of Limitation Period on Certain Adjustments Affirmed in Recent Decision
A recent case illustrates that courts may sustain the government when it makes adjustments to closed years only to determine whether an overpayment of tax exists, and not to recover additional taxes beyond the limitation period on assessment.
Sec. 199 Exam Status and Update
The Sec. 199 deduction has garnered increased attention in IRS exams over the past two years.
IRS Revises Sec. 179 Expensing Amounts to Reflect HIRE Act Changes
The IRS issued revised inflation-adjusted numbers to reflect the extension of the increased Sec. 179 expensing amount for 2010.
Penalty for Failing to Meet EIC Due Diligence Requirements Can Be Assessed Against Employer or Employee
The Office of Chief Counsel (OCC) advised that after the amendments to the regulations in T.D. 9436 in December 2008, the IRS continues to have the authority to assert the penalty against either the employee-preparer of a return or his or her employer for failing to meet the earned income credit (EIC) due diligence requirements. However, the IRS cannot impose a penalty against both an employee-preparer and the employer based on the same factual situation. In addition, the OCC advised that the signing preparer of a tax return is responsible for retaining the records showing that the preparer met the EIC due diligence requirements.
House Passes Tax Extenders Bill
The House passed the American Jobs and Closing Tax Loopholes Act, which extends a large number of expired tax provisions through 2010.
IRS Posts Revised Form 941 and Instructions for Claiming New Hire Payroll Tax Exemption
The IRS posted a new version of Form 941, Employer’s Quarterly Federal Tax Return, and its instructions for claiming the special payroll tax exemption that applies to new workers hired in 2010.
IRS Guidance on Small Business Health Care Tax Credit
On May 17, the IRS issued a notice providing guidance to small businesses that are eligible to claim a tax credit for employee health insurance coverage.
Defending R&D Credits
This article highlights and analyzes some recent decisions concerning the research and development (R&D) tax credit and IRS administrative practices when auditing R&D credit claims, most notably the Union Carbide decision in the Tax Court.
Assessment Period Remains Open in Partnership Case
In Blak Investments, the Tax Court applied Sec. 6501(c)(10) to extend the assessment statute of limitation for a taxpayer with an undisclosed listed transaction on a return due prior to October 22, 2004.
Passive Activity Grouping Disclosure Statements
Generally, a taxpayer may treat multiple trade, business, or rental activities as a single activity under the passive activity rules if the facts and circumstances indicate that they constitute an appropriate economic unit.
Net Operating Loss and the IRS
Recent legislation lets taxpayers carry back a net operating loss (NOL) for a period of three, four, or five years. The IRS’s ability to make adjustments to the affected returns is an important consideration for taxpayers when deciding whether to make the carryback election and how many years to include.
NOL Carryback Claims Can Unlock Closed Statute of Limitation Years
With the introduction of the five-year net operating loss (NOL) carryback in Sec. 172(h) as part of the Worker, Homeownership, and Business Assistance Act of 2009, taxpayers should consider the impact that carrying back an NOL has on the assessment statute of limitation.
Homebuyer Credit, NOL Carrybacks Extended; Mandatory E-Filing Enacted
The Worker, Homeownership, and Business Assistance Act of 2009 contains a handful of tax provisions. These include changes to the first-time homebuyers’ credit, increased NOL carrybacks for small businesses, and mandatory e-filing for most tax return preparers.
Definition of Omission from Gross Income for Partnership Items and the Six-Year Period for Assessing Tax
The IRS has issued temporary and proposed regulations defining an omission from gross income for purposes of the six-year minimum period for assessment of tax attributable to partnership items and the six-year period for assessing tax.
Res Judicata Does Not Bar Taxpayer from Claiming NOL Carrybacks
The Tax Court ruled that the doctrine of res judicata did not bar a taxpayer from claiming net operating loss (NOL) carrybacks to 1999 and 2000, despite a prior deficiency case involving those years, because the statutory scheme for NOL carrybacks includes Sec. 6511(d)(2)(B) (i), which allows a refund attributable to an NOL carryback notwithstanding “the operation of any . . . rule of law,” which includes res judicata.
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.
