IRS Tax Planning; Tax Minimization

TOPICS / PROCEDURE

July 1, 2009

Consent to Extend the Statute of Limitation

Sec. 6501(c) allows the IRS and a taxpayer to consent in writing to extend the statute of limitation to assess tax.

January 1, 2009

IRS Issues Second Directive on Gift Cards

The IRS has issued a second industry director directive (IDD No. 2) (LMSB 4-0808-042) on gift cards and gift certificates, elevating the use of a separate gift card company (Giftco) to administer a taxpayer’s gift card or certificate program to Part A status and providing more information on issues categorized as Part B.

December 1, 2008

Tax Preparer and Taxpayer Reporting Standards Equalized

A provision in the 2008 Tax Extenders and AMT Relief Act sets the standard of conduct for preparers to avoid the penalty for understatement of tax due to an undisclosed return position at “substantial authority,” the same standard applied to taxpayers. The controversial “more likely than not” standard has been retroactively repealed.

August 1, 2008

Taxation of Exchange Traded Notes

This item provides an overview of the structure of an exchange traded note and the current tax treatment of these instruments and an update on some of the guidance that has been issued related to taxation of ETNs

August 1, 2008

Sec. 6511 Limitation Applies to Excise Tax Refund

In a case of first impression, the Court of Federal Claims has held that Sec. 6511(a) limits Sec. 4251 telephone excise tax refund claims to two years after the tax was paid.

August 1, 2008

Farm Bill Enacted over President’s Veto

The Heartland, Habitat, Harvest, and Horticulture Act provides tax breaks for farmers, fuel credits, relief for parts of Kansas affected by storms in 2007, and a change in corporate estimated tax payments for 2012

June 1, 2008

Gift Card and Gift Certificate Income Deferral

This item analyzes IRS audit guidelines for the treatment of gift card and gift certificate income, focusing on situations that require an examining agent to raise issues with IRS industry technical advisers.

March 1, 2008

Codification of the Economic Substance Doctrine

Reviving an idea that has come and gone several times since 1999, the House and Senate have included similar proposals for the codification of the economic substance doctrine in recent proposed legislation.

January 1, 2008

IRS Issues Second IDD on Domestic Production Deduction

The IRS has issued a follow-up directive on the Sec. 199 domestic production deduction (DPD) (LMSB-04-0707-049).

July 1, 2007

Taxpayer Liable for Taxes Misappropriated by Payroll Services Firm

After the Service notified A that it had underpaid its payroll taxes, A investigated and discovered that H, a company A hired to service its payroll accounting, had misappropriated tax funds collected from A. Reliance A taxpayer’s reliance on a third party to fulfill its tax obligations does not relieve

June 1, 2007

Auditor Guidelines on Business Travel and Meal Per Diems after Rev. Rul. 2006-56

An IRS examination memorandum provides guidelines to examiners auditing excess per-diem payments in light of Rev. Rul. 2006-56. The issue involves taxpayers who pay reimbursement allowances to employees for travel expenses in an amount exceeding the Federal per-diem rate, without treating such excess amounts as wages for employment tax purposes.

April 1, 2007

Superseding Return Filed on Extended Due Date Starts SOL

Editor: John L. Miller, CPA The general statute of limitations (SOL) for assessment found in Sec. 6501 gives the IRS three years to assess tax after a return has been filed, beginning on the date that a valid Federal tax return is deemed filed. A return filed prior to the

April 1, 2007

Sec. 199 Deduction

The Service has released a new “Industry Director Directive” on the Sec. 199 domestic production activities deduction (DPAD). The directive, along with an associated document entitled “Minimum Checks for Section 199; Law and Explanation,” details the minimum audit checks IRS examiners are expected to complete when scrutinizing a corporation’s Sec.