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MSCPA Regional Forums 2016 Individual Tax Developments
New Laws
Tax provisions in Highway Trust Fund extension law P.L. 114-41
New law's revised definition of “small employer” affects cafeteria plan benefits H.R. 1624, the “ Protecting Affordable Coverage for Employees Act.”
Individual Tax Breaks in the “Protecting Americans from Tax Hikes” Act 12/18/15
Updated Regulations Proposed regs cover many innocent spouse relief subjects Preamble to Prop Reg 11/19/2015; Prop Reg § 1.66-1, Prop Reg § 1.66-2, Prop Reg § 1.66-3 , Prop Reg § 1.66-4, Prop Reg § 1.6015-1, Prop Reg § 1.6015-2 , Prop Reg § 1.6015-3, Prop Reg § 1.6015-4, Prop Reg § 1.6015-5 , Prop Reg § 1.6015-6, Prop Reg § 1.6015-7, Prop Reg § 1.6015-8
Proposed reliance regs on taxation, withholding, reporting of adjustments to stock rights Preamble to Prop Reg 04/12/2016; Prop Reg § 1.305-1, Prop Reg § 1.305-3, Prop Reg § 1.305-7 , Prop Reg § 1.860G-3, Prop Reg § 1.861-3, Prop Reg § 1.1441-2 , Prop Reg § 1.1441-3, Prop Reg § 1.1441-7, Prop Reg § 1.1461-2 , Prop Reg § 1.1471-2, Prop Reg § 1.1473-1, Prop Reg § 1.6045B-1
Temporary and proposed reliance regs on inherited property consistent basis rules T.D. 9757, 03/02/2016; Reg. § 1.6035-2T; Preamble to Prop Reg 03/02/2016; Prop Reg § 1.1014-10 , Prop Reg § 1.6035-1, Prop Reg § 1.6035-2, Prop Reg § 1.6662-8 , Prop Reg § 301.6721-1, Prop Reg § 301.6722-1
Proposed regs would modify FBAR filing rules for financial professionals Final regs explain Code Sec. 108 COD exclusion for grantor trusts and disregarded entities T.D. 9771, 06/09/2016; Reg. § 1.108-9
Final regs eliminate need to file copy of Code Sec. 83(b) election with return T.D. 9779, 07/25/2016, Reg. § 1.83-2
Cases and Rulings
Supreme Court holds that Constitution compels nationwide right to same-sex marriage Obergefell v. Hodges, (Sup Ct 06/26/2015) 115 AFTR 2d 2015-2309
Stock loss due to “pump and dump” scheme doesn't yield a theft loss deduction Greenberger v. U.S., (DC OH 06/19/2015) 115 AFTR 2d ¶2015-844
Taxpayer was owner of accounts under “investment control” doctrine Webber, (2015) 144 TC No. 17
Basket option contracts” and “basket contracts” are reportable transactions Notice 2015-47, 2015-30 IRB, Notice 2015-48, 2015-30 IRB
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Restitution paid to government as part of business crime plea deal was deductible PLR 201528026
CA 9 affirms; no business deductions for legal medical marijuana dispensary Olive v. Comm., (CA 9 7/09/2015) 116 AFTR 2d ¶2015-5031 No deduction when medical marijuana dispensary's inventory, etc. was confiscated by DEA Beck, TC Memo 2015-149
Taxpayer who generally lived at casino hotel wasn't professional gambler Boneparte, TC Memo 2015-128
10% penalty applied to 401(k) distribution used to prevent employee's eviction from home Quota, TC Summary Opinion 2015-42
Another Circuit says IRS can compel production of foreign bank records Chabot, (CA 3 7/17/2015) 116 AFTR 2d ¶ 2015-5060
Eighth Circuit affirms: CEO can't deduct charitable contributions paid by his company Zavadil v IRS, (CA-8 7/16/2015) 116 AFTR 2d ¶2015-5056
CA 9 reverses; home mortgage interest deduction limits apply per taxpayer33Voss v. Comm., (CA 9 8/7/2015) 116 AFTR 2d ¶ 2015-512 IRS acquiesces to per-taxpayer interpretation of mortgage interest deduction limits AOD 2016-02,8/3/2016 Acquiescence to Voss (IRB 2016-31, p. 193)
No theft loss deduction in Ponzi scheme for unpaid services not included in income Haff, TC Memo 2015-138
CA 9 affirms: late mortgage subordination doesn't save easement deduction Minnick, (CA 9 8/12/2015) 116 AFTR 2d ¶ 2015-5137 No deduction for various expenses related to German-trained lawyer's U.S. legal education O'Connor and Tracy, TC Memo 2015-155
CA-10 affirms: no deduction for German-trained lawyer's U.S. legal education expenses O'Connor and Tracy v. Comm., (CA 10 6/28/2016) 117 AFTR 2d ¶2016-814
Taxpayers couldn't offset annuity income with capital loss or avoid distribution penalty Tobias, TC Memo 2015-164
Tax Court agrees with ex-wife that payments received under divorce agreement aren't alimony Crabtree, TC Memo 2015-163
CA 8 affirms: reacquisition of principal residence triggers loss of homesale exclusion DeBough, (CA 8 8/28/2015) 106 AFTR 2d ¶2015-5192
IRS not bound by lender's representation that borrower wasn't personally liable for debt Dunnigan, TC Memo 2015-190
No equitable innocent spouse relief for husband who knew of wife's fraudulent scheme Williams, TC Memo 2015-198
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Joint return not signed by wife was not a valid return despite intent to file jointly Reifler, TC Memo 2015-199
Taxpayer didn't make mark-to-market election, and Asperger's didn't excuse late filing Poppe, TC Memo 2015-205 Retirement plan participant couldn't carry forward disallowed IRA contribution deduction Dunn, TC Memo 2015-208
Doctor's deductions for motor home used as “mobile office” were limited Cartwright, TC Memo 2015-212
For PAL rules, realty exec's work for entity counted as work for his own realty interests Stanley vs. U.S., (DC AK 11/12/2015) 116 AFTR 2d ¶ 2015-5419 Supreme Court won't review case involving IRS-compelled production of foreign bank records Chabot, (CA 3 7/17/2015) 116 AFTR 2d 2015-5270, cert denied 11/30/2015
No rollover relief for taxpayer who tried to use IRA distribution to buy partnership interest PLR 201547010
Tax relief provided to certain students whose education loans were discharged Rev Proc 2015-57, 2015-51
CA-9 affirms: no bad debt deduction for taxpayer's advances to family-owned business Shaw v. Comm., (CA 9 11/18/2015) 116 AFTR 2d ¶2015-5471
Deduction OK'd for lawsuit-related fees paid by corporate managing shareholder PLR 201548011
IRS allows carryforward of credit from closed year PLR 201548006
CA-9 reverses; stock received in insurance company demutualization has no basis Dorrance, (CA 9 12/9/2015) 116 AFTR 2d ¶ 2015-5505
”Returns” filed by identity thieves are invalid; IRS may disclose information to victims Program Manager Technical Advice 2015-019
Lawyer's reconstructed records were sufficient to show material participation Leland, TC Memo 2015-240 Shareholder-employee's payment in merger included both ordinary income and capital gains Brinkley v. Comm., (CA 5 12/16/2015) 116 AFTR 2d ¶ 2015-5520
Nontaxable identity protection services include those provided before data breach Ann. 2016-2, 2016-3 IRB
Hollywood set builder was independent contractor entitled to Schedule C deductions Quintanilla, TC Memo 2016-5
Employment-discrimination settlement wasn't entitled to capital-gain tax rate Duffy v. U.S., (Fed Cir 1/8/2016) 117 AFTR 2d ¶ 2016-324
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Ninth Circuit affirms: members have no basis in stock acquired in demutualization Reuben v. U.S., (CA 9 1/5/2016) 117 AFTR 2d ¶2016-313
No charitable deduction for taxpayers who obtained appraisal but failed to include with return Gemperle, TC Memo 2016-1
State court decision on transfers between couple as gifts didn't collaterally estop IRS Blagaich, TC Memo 2016-2
Taxpayer with plan to develop property had capital loss in year of foreclosure sale Evans, TC Memo 2016-7
IRS draws conclusions regarding taxpayer's income from nonqualified stock option Chief Counsel Advice 201603025
German taxpayer was subject to regular U.S. income tax and covered expatriate tax Topsnik, 146 TC No. 1
Rent payments to shareholder by corporation engaged in hobby were taxable Estate of Stuller, (CA 7 1/26/2016) 117 AFTR 2d ¶ 2016-379
State judge not compensated on fee basis couldn't deduct expenses above the line Michael Jones (2016), 146 TC No. 3
Fifth Circuit finds passive loss self-rental rule applies to S corporation lessors Williams v. Comm., (CA 5 2/2/2016) 117 AFTR 2d ¶ 2016-393
Courts need not accept either party's position when valuing property Palmer Ranch Holdings Ltd., (CA 11 2/5/2016) 117 AFTR 2d ¶ 2016-395
Penalties upheld against firm that eliminated income by deducting shareholder “bonuses” Brinks Gilson & Lione PC, TC Memo 2016-20
Surviving spouse/sole trustee of decedent's trust granted rollover relief for IRA despite regs PLR 201606032
Emotional distress wasn't derived from physical injury, so damages were taxable Barbato, TC Memo 2016-23
Wife couldn't block IRS collection of husband's tax via liens on community property Smith, (DC WA 2/8/2016) 117 AFTR 2d ¶ 2016-412
Taxpayer's direction to IRA custodian to purchase stock didn't result in taxable distribution McGaugh, TC Memo 2016-28
TC shoots down another attempt to use C corp to skirt Roth IRA contribution limits Polowniak, TC Memo 2016-31
Taxpayer had claim of right in payment by SEP-IRA, so it was taxable to him Vandenbosch, TC Memo 2016-29
IRS suspends Identity Protection PIN online program IRS Statement on IP PIN (Mar. 7, 2016).
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Taxpayer's interest was a property interest, so involuntary conversion treatment applied PLR 201609003
Year fraud perpetrators were indicted wasn't year theft loss was deductible Adkins, (Ct Fed Cl 2/23/2016) 117 AFTR 2d ¶ 2016-449
CA-1 joins other circuits in holding that IRS can compel production of foreign bank records U.S. v. Chen, (CA 1 02/29/2016) 117 AFTR 2d ¶2016-469
Failure to report court-ordered IRA liquidation results in accuracy-related penalty Navaid, TC Memo 2016-37
No theft loss or bad debt deduction for taxpayer's seemingly bad investment Riley, TC Memo 2016-46
Fraud penalties upheld against auto dealer who failed to report misappropriated funds O'Neal, TC Memo 2016-49
Sixth Circuit approves sale of home to satisfy one spouse's tax liability U.S. v. Davis, (CA 6 3/9/2016) 117 AFTR 2d ¶ 2016-499
Taxpayers' “rollover as business startup” account wasn't valid retirement plan Powell v. U.S., (Ct Fed Cl 3/16/2016) 117 AFTR 2d ¶ 2016-515
IRA owner's guarantee of loan to IRA-owned corporation resulted in deemed distribution Thiessen, (2016) 146 TC No. 7
Rollover requirement waived for taxpayer who relied on spouse's financial acumen PLR 201612017
Payments that taxpayer made under court's pretrial order were deductible alimony Anderson, TC Memo 2016-47
IRS disagrees with decision that compensation for preparer malpractice wasn't taxable AOD 2016-001,04/18/2016
Deed of easement didn't meet written acknowledgment rules, so no charitable deduction French, TC Memo 2016-53
Tax Court found taxpayer had no unreported income despite tax evasion conviction Senyszyn, (2016) 146 TC No. 9
Taxpayers can now pay IRS in cash at 7-Eleven IR 2016-56 IRS's “Pay with Cash at a Retail Partner.”
Sale of scrap metal didn't result in self-employment income Ryther, TC Memo 2016-56
IRS publishes collection financial standards that are tougher on taxpayers IRS webpage, “Collection Financial Standards” (revised Mar. 28, 2016). IRS webpage, “National Standards: Food, Clothing and Other Items” (revised Mar. 28, 2016).
AOTC denied for year following the year in which tuition was prepaid McCarville, TC Summary Opinion 2016-14
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Taxpayer must report share of partnership income even though he was unaware there was income Lamas-Richie, TC Memo 2016-63
No innocent spouse relief for wife where husband not deceptive and wife didn't ask questions Arobo, TC Memo 2016-66
Jet service activity wasn't for profit, so taxpayer can't claim losses in excess of income Hoffmann, TC Memo 2016-69
Surviving spouse can't use deceased husband's minimum tax credit from pre-marriage year Vichich, (2016) 146 TC No. 12
Merchant marine couldn't fully exclude income earned on international voyages Wilson, TC Summary Opinion 2016-19
Taxpayer didn't make honest attempt to follow the law, so what he filed wasn't a “return” In Re: Johnson, (Bktcy Ct FL 4/18/2016) 117 AFTR 2d ¶ 2016-632
Taxpayer didn't make honest attempt to follow law, so tax debt not discharged in bankruptcy Smith, (CA 9 7/13/2016) 118 AFTR 2d ¶ 2016-5032
Pending appeal of criminal conviction motion doesn't affect timing of restitution assessment Chief Counsel Advice 201616011
Easement clause failed to protect charity in perpetuity, so no charitable deduction Carroll, (2016) 146 TC No. 13
Hair-braiding salon was a business, not a hobby, but accuracy-related penalty applied Delia, TC Memo 2016-71
Innocent spouse relief from interest & penalty granted to sole earner despite contrary Rev Proc Joseph Patrick Boyle, TC Memo 2016-87
Tax Court finds taxpayer was entitled to AOTC despite information reporting gap Terrell, TC Memo 2016-85
No clothing deduction where employee had to wear employer's brand Barnes, TC Memo 2016-79
CA 7 approves IRS lien foreclosure/sale of property partially owned by innocent party Adent, (CA 7 5/10/2016) 117 AFTR 2d ¶ 2016-681
Compensation paid to sons of company's founder & payment to their company were deductible H. W. Johnson, Inc., TC Memo 2016-95
Shareholder's advances to his C corporation weren't deductible Aleamoni, TC Summary Opinion 2016-21
Accountant-turned-attorney couldn't deduct law school costs Santos, TC Memo 2016-100
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Tax Court finds U.S. citizen's capital gains taxable under U.S.-Israel Treaty Cole, TC Summary Opinion 2016-22
Mary Kay deferred comp plans are subject to self-employment tax Peterson, (CA 11 7/8/2016) 117 AFTR 2d ¶ 2016-714
Wellness program cash award taxable, as is reimbursement of pretax participation cost Chief Counsel Advice 201622031
Taxpayers weren't subject to PAL limitations with respect to their rental properties Moon, TC Summary Opinion 2016-23
Payment to FINRA was nondeductible fine to government “agency or instrumentality” Chief Counsel Advice 201623006
Tax was paid long before return was filed, so statute of limitations blocked refund McAuliffe, TC Summary Opinion 2016-25
Debt secured by property held for sale doesn't qualify for debt discharge exclusion Rev Rul 2016-15, 2016-26 IRB
Duty of consistency requires S corp to recognize income as originally reported Squeri, et al, TC Memo 2016-116
Tax avoidance strategy wasn't “shelter,” so registration & penalty rules didn't apply In re: William R. Canada, Jr., (Bktcy Ct TX 06/07/2016) 117 AFTR 2d ¶2016-758
Post-divorce settlement sale of businesses between ex-spouses was incident to divorce Belot, TC Memo 2016-113
Termination of life insurance policy with outstanding loans results in constructive distribution Mallory, TC Memo 2016-110
Wrongful incarceration exclusion only applies to amounts received by incarcerated persons In re: Elkins, (Bktcy Ct OH 6/14/2016) 117 AFTR 2d ¶ 2016-779
IRS fills in details regarding wrongful incarceration exclusion and refund claims IR 2016-88 IRS Website “Wrongful Incarceration FAQs” (June 16, 2016).
No deferral for lump-sum payment from inherited annuity used to buy replacement annuity PLR 201625001
No rollover relief for taxpayer who used IRA distribution as short-term loan PLR 201625022
Taxpayer had COD income but was entitled to exclude it under insolvency exception Newman, TC Memo 2016-125
Taxpayers not entitled to unsubstantiated noncash charitable contribution deductions Payne, TC Summary Opinion 2016-30
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Taxpayers didn't have profit objective for their part-time Amway business Hess, TC Summary Opinion 2016-27
No mortgage interest deduction for cohabiting boyfriend with no equitable interest in home Jackson, TC Summary Opinion 2016-33
Taxpayers who sold condo after having second child qualify for reduced gain exclusion PLR 201628002
Damage to retaining wall wasn't caused by casualty; no loss deduction Alphonso, TC Memo 2016-130
Second Circuit refuses to enforce summons for taxpayer's offshore bank records U.S. v. Greenfield, (CA 2 8/1/2016) 118 AFTR 2d ¶ 2016-5075
CA 9: online poker accounts weren't subject to FBAR, but payment processing account was U.S. v. Hom, (CA 9 7/26/2016), 118 AFTR 2d ¶ 2016-5057
DC Circuit: Tax Court didn't consider laws of both countries in construing international pact Eshel, (CA Dist Col 08/05/2016) 118 AFTR 2d ¶2016-5093
Despite poor records, taxpayer satisfied passive activity real estate professional test Hailstock, TC Memo 2016-146
Real estate professional status didn't make rental losses automatically deductible Gragg vs. U.S., (CA 9 8/4/2016) 118 AFTR 2d ¶ 2016-5091
Professor and librarian can't deduct expenses associated with increasing “general knowledge” Tanzi, TC Memo 2016-148
Hotel controller could deduct cost of executive MBA Kopaigora, TC Summary Opinion 2016-35
District court approves sale of marital home to satisfy one spouse's tax liability Tannenbaum, (DC NY 8/11/2016) 117 AFTR 2d ¶ 2016-5120
Pilot couldn't deduct aviation expenses because activity wasn't a trade or business Tizard, TC Summary Opinion 2016-42
No relief from excess contribution tax where withdrawal occurred in different tax year Wu v. U.S., (CA 7 08/29/2016) 118 AFTR 2d ¶2016-5154
One rollover per individual, per year, is allowed for a Coverdell ESA Program Manager Technical Advice 2016-010
Tax Court finds entire amount of distribution from canceling annuity was taxable Peterson, TC Summary Opinion 2016-52
Taxpayer had ordinary income from bulk sale of land that he had begun to develop Boree, (CA 11 9/12/2016) 118 AFTR 2d ¶ 2016-5207
Chemist couldn't assign income to nontaxable org that he couldn't prove actually existed George, Jr. v. Comm., (CA 1 09/13/2016) 118 AFTR 2d ¶2016-5209
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Payments to pastor were includible in income as self-employment income White, TC Memo 2016-167
Supreme Court won't review decision on PAL extraordinary personal service exception Johnson v. Pope, (CA 4 3/08/2016) 117 AFTR 2d 2016-947, cert denied 10/3/2016
Restaurant franchisee wasn't “limited partner” exempt from self-employment tax Chief Counsel Advice 201640014
IRS advises non-spouse Roth IRA beneficiary on RMD rules Information Letter 2016-0071
2016 C Corp Tax Developments CA-9 affirms: no bad debt deduction for taxpayer's advances to family-owned business--Shaw v. Comm., (CA 9 11/18/2015) 116 AFTR 2d ¶2015-5471 Tax Court refuses to impose transferee liability on company shareholders--John M. Alterman trust U/A/D May 9, 2000, et al, TC Memo 2015-231 ESOP violating anti-alienation and plan document requirements was disqualified--Family Chiropractic Sports Injury & Rehab Clinic, Inc., TC Memo 2016-10 Ninth Circuit finds dental practice's “management fees” weren't deductible--Elick v. Comm., (CA 9 1/6/2016) 116 AFTR 2d ¶ 2016-345 Penalties upheld against firm that eliminated income by deducting shareholder “bonuses”--Brinks Gilson & Lione PC, TC Memo 2016-20 IRA owner's guarantee of loan to IRA-owned corporation resulted in deemed distribution--Thiessen, (2016) 146 TC No. 7 No clear link from financial problems to not paying tax, so penalties, liens, levies applied--Nutrition Formulators Inc., TC Memo 2016-60 Company's matching contributions to employee PAC aren't deductible--PLR 201616002 Deferred advance payments must be reported despite acquirer's subsequent write-down--Chief Counsel Advice 201619009 Accrual basis taxpayer can deduct customer loyalty discounts upon issuance--Giant Eagle, Inc. v. Comm., (CA 3 5/6/2016) 117 AFTR 2d ¶2016-674 Compensation paid to sons of company's founder & payment to their company were deductible--H. W. Johnson, Inc., TC Memo 2016-95 Shareholder's advances to his C corporation weren't deductible--Aleamoni, TC Summary Opinion 2016-21 Homecare agency reasonably treated workers as independent contractors--Nelly Home Care, Inc, (DC PA 5/10/2016) 117 AFTR 2d ¶ 2016-680 Tax Court upholds rejection of $600 offer to compromise $1.6 million liability--Synergy Environ-mental, Inc., TC Memo 2016-99
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Company president liable for trust fund penalty despite taking action upon learning of deficiency--Arriondo, (DC TX 7/22/2016) 118 AFTR 2d ¶ 2016-5054 IRS resumes issuing rulings on device and corporate business purpose in corporate divisions--Rev Proc 2016-45, 2016-37 IRB Manufacturer's “free” supplying of taxable medical device was a lease--Program Manager Technical Advice 2016-014 Corporation, not its shareholders, was taxable on business' income--Barnhart Ranch, Co., TC Memo 2016-170 Entity not a corporation despite IRS's processing of Form 1120 --Heber E. Costello, LLC, TC Memo 2016-184
2016 S Corp Tax Developments IS corporation partners in a partnership met the shareholder limit after restructuring--PLR 201544020 Settlement payment to ward off foreign bribery charges isn't deductible as business expense--Legal Advice Issued by Field Attorneys 20154702F Deduction OK'd for lawsuit-related fees paid by corporate managing shareholder--PLR 201548011 IRS allows carryforward of credit from closed year--PLR 201548006 Rent payments to shareholder by corporation engaged in hobby were taxable--Estate of Stuller, (CA 7 1/26/2016) 117 AFTR 2d ¶ 2016-379 Fifth Circuit finds passive loss self-rental rule applies to S corporation lessors--Williams v. Comm., (CA 5 2/2/2016) 117 AFTR 2d ¶ 2016-393 S corp income earned after bankruptcy commencement was taxable to bankruptcy estate--Medley v. Citizen Southern Bancshares, (Bktcy Ct AL 5/17/2016) 117 AFTR 2d ¶ 2016-699 Duty of consistency requires S corp to recognize income as originally reported--Squeri, et al, TC Memo 2016-116 S corporation disproportionate distributions didn't create second class of stock--PLR 201633017 Taxpayer's pre-exchange use of replacement property didn't prevent Sec. 1031 nonrecognition--Estate of Bartell, Jr., (2016) 147 TC No. 5 S corp's payment of sole shareholder/employee's personal expenses wasn't compensation--Scott Singer Installations, Inc., TC Memo 2016-161 S corp owner not entitled to unsubstantiated NOL carryforwards; liable for penalties--Jasperson v. Comm., (CA 11 08/31/2016) 118 AFTR 2d ¶2016-5173
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2016 Partnership Tax Developments IRS Clarifies Recourse Partnership Liability Rules; Takes Aim At Leveraged Partnerships And More TD 9788, NPRM REG-122855-15
IRS Finalizes Regs On Partnership Disguised Sales TD 9787
Final Regs Clarify And Modify Tests For Internal Use Computer Software TD 9786
Chief Counsel Clarifies Passthrough’s Reporting Requirements For Rehabilitation Credit CCA 201641022
Restaurant Franchisee Not Limited Partner; Income Subject To Self-Employment Tax CCA 201640014
Tenth Circuit Holds Managing Partner May Raise Reasonable Cause/Good Faith Defense At Partner-Level McNeil, CA-10, September 6, 2016
IRS Can Require Reporting Of Disregarded Entity’s EIN On Owner’s Return PMTA 2016-08
Appeals Court Affirms: Otherwise Expired Statute Of Limitations Remained Open For Partner MK Hillside Partners, CA-9, June 23, 2016
Partners Who Work For Disregarded Entity Owned By Partnership Are Self-Employed, Regs Provide TD 9766, NPRM REG-114307-15
Practitioners' Corner: New Partnership Audit Rules May Require Difficult Decisions
Guarantee Of Partnership’s Nonrecourse Debt Was Not Contingent; Only Partner Who Provided Guarantee Was Entitled To Basis CCA 201606027
IRS Approves Restructuring Of S Corps That Will Become Partners In General Partnership LTR 201544020
Ohio: State Supreme Court Holds State Tax Code Section Unconstitutional, as Applied to Nonresident Corrigan v. Testa, Ohio Supreme Court, 2016-Ohio-2805, May 4, 2016.
2016 Estate and Trust Income Tax Developments Powers of appointment-successor trustees-general power of appointment-value of gross estate-generation-skipping transfer taxes-modification of trusts-exempt status. (PLR 201641020)
Qualified domestic trusts-elections-extensions (PLR 201640006)
Trust deductions-amounts paid or permanently set aside for charitable purposes-elections-extensions ( PLR 201636004 , PLR 201636005 , PLR 201636006 , PLR 201636007 , PLR 201636008 , PLR 201636009 , PLR 201636010
Qualified domestic trusts-elections-extensions (PLR 201634018)
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Trusts-person other than grantor treated as substantial owner (PLR 201633021)
Collection actions-lien foreclosure-property in name of third party-trusts-nominees (U.S. v. Kimball, Jr., DC ME, 117 AFTR 2d 2016-2234)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax (PLR 201628010)
Qualified domestic trusts-elections-extensions (PLR 201622021)
User fee requests-letter rulings; determination letters (Rev Proc 2016-32, 2016-22 IRB 1019)
Fraud penalties-defenses-reasonable cause-knowledge-reliance on professional-proof (In Re: Wyly, et al., Bktcy Ct TX, 117 AFTR 2d 2016-1508)
Fraud penalties-income and gift tax underpayments-offshore trusts-clear and convincing evidence (In Re: Wyly, et al., Bktcy Ct TX, 117 AFTR 2d 2016-1508 )
Information reporting penalties-foreign corps. and trusts-grantor trusts-distributions; gratuitous transfers-reasonable cause (In Re: Wyly, et al., Bktcy Ct TX, 117 AFTR 2d 2016-1508 )
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax (PLR 201614008)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax (PLR 201614007)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax (PLR 201614006)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax (PLR 201613007)
Charitable remainder unitrusts-unrelated business taxable income-exchange of assets-endowments (PLR 201613015)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax (PLR 201613007)
Charitable remainder unitrusts-unrelated business taxable income-exchange of assets-endowments (PLR 201613015)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax-power of appointment (PLR 201550005, PLR 201550006, PLR 201550007, PLR 201550008, PLR 201550009, PLR 201550010, PLR 201550012)
Trust deductions-charitable contributions-donated real property-valuation; FMV vs. adjusted basis (Green v. U.S., DC OK, 116 AFTR 2d ¶2015-5394)
Trust income, deductions, and credits attributable to grantors and others as substantial owners-distribution of property-gift tax-power of appointment (PLR 201550005, PLR 201550006, PLR 201550007, PLR 201550008, PLR 201550009, PLR 201550010, PLR 201550012)
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Trust deductions-charitable contributions-donated real property-valuation; FMV vs. adjusted basis (Green v. U.S., DC OK, 116 AFTR 2d ¶2015-5394
2016 Estate and Gift Tax Developments Donee's assumption of Code Sec. 2035(b) estate liability reduced value of gift (09/24/2015) Jean Steinberg, Donor, (2015) 145 TC No. 7
Gift tax return filed as part of settlement can't escape late payment interest rules (03/24/2016) Estate of La Sala, TC Memo 2016-42
Inflation-adjusted 2016 figures for transfer tax and foreign items (09/24/2015)
Inflation-adjusted 2017 figures for transfer tax and foreign items (09/22/2016)
Transfer to shareholder's children to settle dispute in family business wasn't a gift Estate of Edward S. Redstone, (2015) 145 TC No. 11
IRS provides procedure to disregard, and treat as null and void, QTIP election Rev Proc 2016-49, 2016-42 IRB
Proposed regs would close family business estate/gift tax loopholes Preamble to Prop Reg 08/02/2016; Prop Reg § 25.2701-2, Prop Reg § 25.2701-8, Prop Reg § 25.2704-1, Prop Reg § 25.2704-2, Prop Reg § 25.2704-3, Prop Reg § 25.2704-4
Shareholder's transfer to children after settlement of family business dispute was a taxable gift Sumner Redstone, TC Memo 2015-237
Estate allowed to deduct Ponzi scheme losses incurred by LLC in which it held an interest Estate of James Heller, (2016) 147 TC No. 11
"Texas tycoon" committed tax fraud; ordered to work out a deal for IRS's $1Bn claim In re: Wyly, et al, (Bktcy Ct TX 05/10/2016) 117 AFTR 2d ¶2016-682
Failure to adequately describe gifts allowed IRS to assess gift tax at any time Legal Advice Issued by Field Attorneys 20152201F
2016 Tax Accounting Developments IRS issues proposed regs on Sec. 199 domestic production activities deduction--Preamble to Prop Reg 08/26/2015, Prop Reg §§ 1.199-1, 1.199-2, 1.199-3 , 1.199-4, 1.199-6, and 1.199-8
Costs of protecting against patent infringement are deductible business expenses--PLR 201536006
No deduction for partially worthless debts where charge-off requirement not met--Legal Advice Issued by Field Attorneys 20153501F Simplified per-diem rates increase for post-Sept. 30 business travel--Notice 2015-63, 2015-40 IRB Medical care payments by state fund for birth-related injury victims are not taxable--PLR 201544019
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IRS looks at deductibility of business donations to charitable and other similar organizations--Chief Counsel Advice 201543013 Capitalization regs' de minimis safe harbor for taxpayers with no AFS raised to $2,500--Notice 2015-82, 2015-50 IRB; IR 2015-133 Safe harbor for retail and restaurant businesses on when to deduct/capitalize remodeling costs--Rev Proc 2015-56, 2015-49 IRB CA-9 reverses; stock received in insurance company demutualization has no basis--Dorrance, (CA 9 12/9/2015) 116 AFTR 2d ¶ 2015-5505 Tax Provisions in the 2016 Consolidated Appropriations Act--Division P—Tax-Related Provisions.
Delay of “Cadillac” Excise Tax on High Cost Employer-Sponsored Health Coverage Deductibility of Cadillac Tax on High Cost Employer-Sponsored Health Coverage One-Year Suspension of the Annual Fee on Health Insurance Providers Residential Energy-Efficient Solar Property Credit Extended and Phased Out
Business Tax Breaks in the “Protecting Americans From Tax Hikes” Act Research Credit Permanently Extended and Made Creditable Against Other Taxes Reduction in S Corp Recognition Period for Built-In Gains Tax Permanently Extended Exclusion of 100% of Gain on Certain Small Business Stock Permanently Extended Lower Shareholder Basis Adjustment for Charitable Contributions by S Corporations Permanently Extended Enhanced Deduction for Food Inventory Permanently Extended and Expanded Work Opportunity Tax Credit Extended Through 2019 and Expanded New Markets Tax Credit Extended Through 2019
Depreciation & Expensing Provisions in the “Protecting Americans from Tax Hikes” Act Enhanced Expensing Made Permanent 15-Year Writeoff for Qualified Leasehold and Retail Improvements and Restaurant Property Made Permanent Bonus First-Year Depreciation Extended Through 2019 Enhanced First-Year Depreciation Cap for Autos and Trucks Extended Through 2019 Choice to Forego Bonus Depreciation and Claim Credits Instead Is Extended
Energy Tax Provisions in the “Protecting Americans from Tax Hikes” Act Nonbusiness Energy Property Credit Retroactively Extended and Modified Energy Efficient Commercial Building Property Deduction Modified and Extended
Non-Extender Provisions in the “Protecting Americans From Tax Hikes” Act Exclusion for Work College Program Payments Changes to 529 Plan Distribution Rules Residency Requirement Eliminated for ABLE Programs
Post-2017 Partnership Audit Rules Changed by The Bipartisan Budget Act of 2015
New Exclusion for Wrongfully Incarcerated Individuals Rollover Allowed From Retirement Plans to SIMPLE Accounts Requirements for the Issuance of Individual Taxpayer Identification Numbers Accelerated Due Dates for W-2, 1099, Etc. Forms Safe Harbor for De Minimis Errors on Information Returns and Payee Statements Increase in Preparer Willful or Reckless Conduct Penalty
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Related Party Loss Rules Modified to Prevent Transfer of Losses from Tax-Indifferent Parties
Business and other standard mileage rates decrease for 2016--Notice 2016-1, 2016-02 IRB; IR 2015-137 Nontaxable identity protection services include those provided before data breach--Ann. 2016-2, 2016-3 IRB No charitable deduction for taxpayers who obtained appraisal but failed to include with return--Gemperle, TC Memo 2016-1 What's new for 2016—a roundup of tax changes effective this year
Due Dates for Business Returns
Return Preparer and Compliance Rules Taxpayer with plan to develop property had capital loss in year of foreclosure sale--Evans, TC Memo 2016-7 JCT updates list of expiring provisions to reflect year-end extenders legislation The following provisions are in effect through Dec. 31, 2016.
Individual provisions.
• . . . Exclusion for discharge of indebtedness on a principal residence under Code Sec. 108(a)(1)(E).
• . . . Treatment of mortgage insurance premiums as deductible qualified residence interest under Code Sec. 163(h)(3).
• . . . Medical expense deduction: adjusted gross income (AGI) floor for individuals age 65 and older (and their spouses) remains at 7.5% under Code Sec. 213(f).
• . . . Deduction for qualified tuition and related expenses under Code Sec. 222(e).
Business provisions. • . . . Indian employment tax credit under Code Sec. 45A(f). • . . . Railroad track maintenance credit under Code Sec. 45G(f). • . . . Mine rescue team training credit under Code Sec. 45N. • . . . 3-year depreciation for race horses two years old or younger under Code Sec.
168(e)(3)(A). • . . . 5-year cost recovery for certain energy property under Code Sec. 168(e)(3)(B)(vi)(I) and
Code Sec. 48(a)(3)(A). • . . . 7-year recovery period for motorsports entertainment complexes under Code Sec.
168(i)(15) and Code Sec. 168(e)(3)(C)(ii). • . . . Accelerated depreciation for business property on an Indian reservation under Code Sec.
168(j)(8). • . . . Election to expense advanced mine safety equipment under Code Sec. 179E(g). • . . . Special expensing rules for certain film, television, and live theatrical productions under
Code Sec. 181. • . . . Deduction allowable with respect to income attributable to domestic production activities in
Puerto Rico under Code Sec. 199(d)(8).
Energy-related provisions.
• . . . Credit for certain nonbusiness energy property under Code Sec. 25C(g). • . . . Credit for residential energy property under Code Sec. 26D(g).
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• . . . Qualified fuel cell motor vehicle credit under Code Sec. 30B(k)(1). • . . . Alternative fuel vehicle refueling property credit under Code Sec. 30C(g). • . . . Credit for 2-wheeled plug-in electric vehicles under Code Sec. 30D(g)(3)(E)(ii). • . . . Second generation biofuel producer credit under Code Sec. 40(b)(6)(J). • . . . Income tax credits for biodiesel fuel, biodiesel used to produce a qualified mixture, small
agri-biodiesel producers, renewable diesel fuel and renewable diesel used to produce a qualified mixture under Code Sec. 40A.
• . . . Beginning-of-construction date for nonwind renewable power facilities eligible to claim the electricity production credit or investment credit in lieu of the production credit under Code Sec. 45(d) and Code Sec. 48(a)(5).
• . . . Credit for production of Indian coal under Code Sec. 45(e)(10)(A). • . . . Credit for construction of new energy efficient homes under Code Sec. 45L(g). • . . . Credit for hybrid solar lighting system property under Code Sec. 48(a)(3)(A)(ii). • . . . Credit for geothermal heat pump property, small wind property, and combined heat and
power property under Code Sec. 48(a)(3)(A)(vii), Code Sec. 48(c)(4), and Code Sec. 48(c)(3)(A)(iv) .
• . . . Credit for qualified fuel cell and stationary microturbine power plant property under Code Sec. 48(c)(1)(D) and Code Sec. 48(c)(2)(D).
• . . . Special depreciation allowance for second generation biofuel plan property under Code Sec. 168(l).
• . . . Energy efficient commercial buildings deduction under Code Sec. 179D(h). • . . . Excise tax credits and outlay payments for biodiesel fuel mixtures and renewable diesel
fuel mixtures under Code Sec. 6426(c)(6) and Code Sec. 6427(e)(6)(B). • . . . Excise tax credits and outlay payments for alternative fuel under Code Sec. 6426(d)(5) and
Code Sec. 6427(e)(6)(C). • . . . Excise tax credits for alternative fuel mixtures under Code Sec. 6426(e)(3).
Community assistance provisions.
• . . . Qualified zone academy bonds; allocation of bond limitation under Code Sec. 54E(c)(1). • . . . Empowerment zone tax incentives under Code Sec. 1391, Code Sec. 1394, and Code
Sec. 1397B. • . . . American Samoa economic development credit.
Expiring Sept. 30, 2019. The following provisions are in effect through Sept. 30, 2019:
• . . . Specified health insurance policy fee under Code Sec. 4375(e). • . . . Self-insured health plan fee under Code Sec. 4376(e).
Expiring Dec. 31, 2019. The following provisions are in effect through Dec. 31, 2019, except where otherwise noted:
• . . . Credit for health insurance costs of eligible individuals under Code Sec. 35(b). • . . . New markets tax credit under Code Sec. 45D(f). • . . . Work opportunity tax credit under Code Sec. 51(c)(4). • . . . Additional first-year depreciation with respect to qualified property under Code Sec.
168(k)(1) and Code Sec. 460(c)(6)(B), subject to a phaseout (Dec. 31, 2020 for certain longer-lived and transportation property).
• . . . Election to accelerate AMT credits in lieu of additional first-year depreciation under Code Sec. 168(k)(4) (Dec. 31, 2020 for certain longer-lived and transportation property).
• . . . Election of additional depreciation for certain plants bearing fruits and nuts under Code Sec. 168(k)(5), subject to a phaseout.
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• . . . Beginning-of-construction date for wind renewable power facilities eligible to claim the electricity production credit under Code Sec. 45(d) or investment credit in lieu of the production credit under Code Sec. 48(a)(5), subject to a phaseout (Dec. 31, 2021 for individual residential solar credit and business solar investment credit, and Dec. 31, 2016 for other renewable power and alternative energy credits).
• . . . Look-through treatment of payments between controlled foreign corporations under Code Sec. 954(c)(6).
Expiring Dec. 31, 2021. The following provisions are in effect through Dec. 31, 2021: • . . . Credit for individuals for residential solar property under Code Sec. 25D(g), subject to a
phaseout (Dec. 31, 2016 for other residential energy property). • . . . Beginning-of-construction date for increased credit for business solar energy property
under Code Sec. 48(a)(2)(A)(i)(II). • . . . Special way of accounting for transportation costs of independent refiners under Code Sec.
199(c)(3)(C). Former “extender” provisions now permanent.
Individual provisions.
• . . . Enhanced child tax credit under Code Sec. 24(d). • . . . Enhanced American Opportunity Tax Credit under Code Sec. 25A. • . . . Enhanced earned income tax credit under Code Sec. 32(b). • . . . Above-the-line deduction for educator expenses under Code Sec. 62(a)(2)(D). • . . . Parity between employer-provided mass transit and parking benefits under Code Sec.
132(f). • . . . Option to claim an itemized deduction for State and local general sales taxes in lieu of
State and local income taxes under Code Sec. 164(b)(5). • . . . Special rules to encourage contributions of capital gain real property for conservation
purposes under Code Sec. 170(b)(1)(E) and Code Sec. 170(b)(2)(B). • . . . Tax-free distributions (up to $100,000 annually for taxpayers 70-1/2 and older) from
individual retirement plans for charitable purposes under Code Sec. 408(d)(8).
Business provisions.
• . . . Research credit under Code Sec. 41(h). • . . . Exemption from gross basis tax and withholding tax for interest-related dividends and
short-term capital gains dividends received from a regulated investment company (RIC) under Code Sec. 871(k).
• . . . Treatment of a RIC as a qualified investment entity under Code Sec. 897(h)(4). • . . . Reduced (5-year) S corporation recognition period for built-in gains tax under Code Sec.
1374(d)(7). • . . . Exclusion of 100% of gain on certain small business stock under Code Sec. 1202(a)(4). • . . . Lower shareholder basis adjustment for charitable contributions by S corporations under
Code Sec. 1367(a)(2). • . . . Special rule for payments by a charity to a controlling entity under Code Sec.
512(b)(13)(E)(iv). • . . . Liberalized rules for corporate qualified conservation contributions under Code Sec.
170(b)(1)(E). • . . . Enhanced deduction for food inventory under Code Sec. 170(e)(3)(C)(iv). • . . . Subpart F exception for active financing income under Code Sec. 953(e)(10) and Code
Sec. 954(h)(9). • . . . Differential wage payment credit for eligible employers under Code Sec. 45P(f).
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• . . . Low-income housing 9% credit rate freeze under Code Sec. 42(b)(2)(A). • . . . Exclusion from gross income of a military member's basic housing allowance for purposes
of determining qualification as a “low-income tenant” for purposes of the low-income housing tax credit.
Disability payments with pension offset qualify as workmen's compensation--PLR 201606020 Emotional distress wasn't derived from physical injury, so damages were taxable--Barbato, TC Memo 2016-23 Housing cost allowances issued for those working abroad in high-cost areas in 2016--Notice 2016-21, 2016-12 IRB IRS: cash reimbursements to reflect retroactive transit benefit increase may be taxable
Program Manager Technical Advice 2016-001 Payment from sale of unredeemed gift cards for goods or services could be deferred--PLR 201610017 IRS disagrees with decision that compensation for preparer malpractice wasn't taxable--AOD 2016-001,04/18/2016 Taxpayers can now pay IRS in cash at 7-Eleven--IR 2016-56 Sale of scrap metal didn't result in self-employment income--Ryther, TC Memo 2016-56 Accounting change to reflect tangible property regs brings prior year audit protection
Chief Counsel Advice 201614037
IRS issues updated list of automatic accounting changes--Rev Proc 2016-29, 2016-21 IRB Wellness program cash award taxable, as is reimbursement of pretax participation cost --Chief Counsel Advice 201622031 Taxpayers weren't subject to PAL limitations with respect to their rental properties--Moon, TC Summary Opinion 2016-23 IRS clarifies limit on business real property indebtedness discharge exclusion--Chief Counsel Advice 201623009 Debt secured by property held for sale doesn't qualify for debt discharge exclusion--Rev Rul 2016-15, 2016-26 IRB Payments for in-home supportive care were nontaxable “difficulty of care” payments--PLR 201623003 Post-divorce settlement sale of businesses between ex-spouses was incident to divorce --Belot, TC Memo 2016-113 Termination of life insurance policy with outstanding loans results in constructive distribution--Mallory, TC Memo 2016-110 Info letter explains potential employer mandate penalty where employee works beyond 29 hours--Information Letter 2016-0030 Draft 2017 Form 941 reflects election for small businesses to offset FICA liability with research credit Despite poor records, taxpayer satisfied passive activity real estate professional test--Hailstock, TC Memo 2016-146
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Real estate professional status didn't make rental losses automatically deductible--Gragg vs. U.S., (CA 9 8/4/2016) 118 AFTR 2d ¶ 2016-5091 Rev Proc provides detailed guidance on depreciation changes under PATH Act--Rev Proc 2016-48, 2016-37 IRB New self-certification procedure for taxpayers who miss 60-day rollover deadline--Rev Proc 2016-47, 2016-37 IRB; IR 2016-113 Doctor's interests in medical practices and surgery center can be separate for PAL purposes--PLR 201634022 IRS warns of criminals taking over tax practitioners' computers--IR 2016-119 TAM sheds light on “inherently permanent structures” for Sec. 199 purposes--PLR 201638022 IRS disagrees with decision allowing accrual basis taxpayer to deduct customer loyalty discounts Action on Decision, IRS nonacquiesence with Third Circuit decision, Giant Eagle
Defaulted qualified retirement plan loan was includible in income--Martinez, TC Memo 2016-182
2016 Tax Practice and Procedure Developments TAX COURT LITIGATION Court Refuses to Set Aside Stipulation Where Taxpayer's Attorney Not Authorized to Practice Law,(Oct. 24, 2016)
NOTICE AND OPPORTUNITY FOR HEARING BEFORE LEVY Failure to Verify Properly Mailed Deficiency Notice Bars Collection of Deficiency,(Oct. 24, 2016)
SEC. 6227—ADMINISTRATIVE ADJUSTMENT REQUESTS Form 8082 AAR Required to Amend Return; Fifth Circuit Reverses Prior Refunds to Partners,(Oct. 17, 2016)
SEC. 6662—IMPOSITION OF ACCURACY-RELATED PENALTY ON UNDERPAYMENTS Mischaracterization of Income Affirmed, But Imposed Penalty Reversed,(Sep. 19, 2016)
SEC. 6531—PERIODS OF LIMITATION ON CRIMINAL PROSECUTIONS Tax Evader Gets Dismissal Of Late Indictment, But No Costs,(Sep. 5, 2016)
SEC. 6330—NOTICE AND OPPORTUNITY FOR HEARING BEFORE LEVY Deadline to Request IRS Hearing Determined by Mailing Date,(Aug. 22, 2016)
SEC. 6109—IDENTIFYING NUMBERS IRS Finalizes Rules Reducing User Fee to Apply for or Renew PTIN,(Aug. 15, 2016)
SEC. 6230—ADDITIONAL ADMINISTRATIVE PROVISIONS Economic Substance Doctrine and Basis Misstatement Intertwined; Penalty Upheld,(Aug. 8, 2016)
SEC. 6724—WAIVER; DEFINITIONS AND SPECIAL RULES Failure-to-File Penalties Waived For Partnership that Did Not Receive K-1s,(Aug. 8, 2016)
SEC. 6663—IMPOSITION OF FRAUD PENALTY Attorney Liable for Penalties On Misappropriated Estate Funds,(Aug. 8, 2016)
SEC. 6331—LEVY AND DISTRAINT Taxpayer's Monthly Income from Law Practice Constitutes ‘Salary or Wages',(Aug. 1, 2016)
SEC. 6662—IMPOSITION OF ACCURACY-RELATED PENALTY ON UNDERPAYMENTS Reliance on Return Preparer Defense Fails To Avoid Underpayment Penalty,(Jun. 27, 2016)
SEC. 7503—TIME FOR PERFORMANCE OF ACTS WHERE LAST DAY FALLS ON SATURDAY, SUNDAY, OR LEGAL HOLIDAY Taxpayer Gets Snow Day Extension to File Tax Court Petition,(Jun. 6, 2016)
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SEC. 6662—IMPOSITION OF ACCURACY-RELATED PENALTY ON UNDERPAYMENTS Dow Chemical May Raise Substantial Authority Defense, But Penalty Still Applies,(May 23, 2016)
SEC. 7201—ATTEMPT TO EVADE OR DEFEAT TAX IRS Miscalculation Leads to Taxpayer Owing No Deficiency Despite Admission,(Apr. 4, 2016)
SEC. 7212—ATTEMPTS TO INTERFERE WITH ADMINISTRATION OF INTERNAL REVENUE LAWS Taxpayer's Sentence Vacated After Finding Miscounting of Tax Losses,(Mar. 14, 2016)
Estate, gift, generation-skipping transfer and income taxes: Returns and procedures: Awards of administrative and litigation costs: Pro bono representation.–
SEC. 6321—LIEN FOR TAXES State Tax Liens Take Priority Over Federal Tax Lien,(Mar. 7, 2016)
SEC. 6531—PERIODS OF LIMITATION ON CRIMINAL PROSECUTIONS Six-Year Statute of Limitation Applies To Attempts to Interfere with Tax Law,(Jan. 18, 2016)
SEC. 7482—COURTS OF REVIEW Marijuana Shop Cannot Yet Appeal Order To Produce Possibly Incriminating Documents,(Dec. 28, 2015)
SEC. 6651—FAILURE TO FILE RETURN OR TO PAY TAX Former MLB All-Star Responsible for Tax Debt Despite Financial Advisor Mismanagement,(Dec. 21, 2015)
SEC. 6901—TRANSFERRED ASSETS Former Shareholders Not Transferees Liable for Unpaid Corporate Taxes,(Dec. 7, 2015)
SEC. 7453—RULES OF PRACTICE, PROCEDURE, AND EVIDENCE Taxpayer Must Use IRS Computation Following Tax Court Stipulated Settlement,(Nov. 23, 2015)
SEC. 6702—FRIVOLOUS TAX SUBMISSIONS Taxpayer's Return Invoking Fifth Amendment Is Not Frivolous Tax Submission,(Nov. 16, 2015)
SEC. 6227—ADMINISTRATIVE ADJUSTMENT REQUESTS Court Has Jurisdiction to Hear Challenge to Properly Submitted AAR,(Nov. 2, 2015)
SEC. 6651—FAILURE TO FILE RETURN OR TO PAY TAX Estate Attorney Not to Blame for Late Tax Filings,(Oct. 26, 2015)
2016 Employee Benefits Tax Developments Adding active employee benefits to a retiree VEBA didn't create disqualified benefit PLR 201530022
Supreme Court rules severance payments included in FICA wage definition. U.S. v. QUALITY STORES, INC., ET AL., 113 AFTR 2d 2014-1326 (134 S. Ct. 1395),; 3402, (S Ct), 03/25/2014
IRS: cash reimbursements to reflect retroactive transit benefit increase may be taxable Program Manager Technical Advice 2016-001
IRS determines applicable distribution period for decedent's IRA PLR 201633025
Tax effects of employees being able to contribute unused vacation to 401(k), HRA plans PLR 201601012
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Wellness program cash award taxable, as is reimbursement of pretax participation cost Chief Counsel Advice 201622031
2016 Exempt Organization Tax Developments Private foundations-excise taxes-excess business holdings-exemption (PLR 201645011)
Exempt orgs.-exempt status-unrelated business taxable income (PLR 201644019)
Private foundations-set-asides-qualifying distributions (PLR 201641031)
Exempt orgs.-private activity bonds-private business use (PLR 201641002)
Private foundations-disposal of excess business holdings-extensions (PLR 201636021)
Exempt orgs.-unrelated business taxable income-endowments-contractual arrangement with trust (PLR 201636042)
Unrelated trade or business income-exempt orgs (PLR 201633032 (TAM))
Exempt orgs.-private foundations-unrelated business taxable income-rental income; sale, exchange, or disposition of property (PLR 201630009)
Orgs. required to notify secretary of intent to operate under 501(c)(4)-procedure to notify (T.D. 9775 , United States Tax Reporter ¶ 86,310 )
Exempt orgs.-private foundations-unrelated business taxable income-rental income; sale, exchange, or disposition of property (PLR 201630009)
Private foundations-set-asides-qualifying distributions (PLR 201628022)
Orgs. required to notify secretary of intent to operate under 501(c)(4)-procedure to notify (Rev Proc 2016-41, 2016-30 IRB)
User fee requests-letter rulings; determination letters (Rev Proc 2016-32, 2016-22 IRB 1019)
Revenue Procedures; Rev. Proc. 2016-41, 2016-30 IRB 165, 07/08/2016, IRC Sec(s). 506; Orgs. required to notify secretary of intent to operate under 501(c)(4)-procedure to notify using Form 8976. Private foundations-set-asides-qualifying distributions (PLR 201627005)
Exempt orgs.-private foundations-distributions-elections-extensions (PLR 201625003)
Voluntary employees' beneficiary assns.-welfare benefit funds-mergers and transfers-excise taxes-gross income (PLR 201625019)
Voluntary employees' beneficiary assns.-mergers and transfers-exempt status (PLR 201625018)
Voluntary employees' beneficiary assns.-exempt status (PLR 201625004)
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Exempt orgs.-private foundation-unrelated business taxable income (PLR 201626004)
Exempt orgs.-exempt status-final adverse determinations-social orgs (PLR 201623012)
User fee requests-letter rulings; determination letters ( Rev Proc 2016-32, 2016-22 IRB 1019)
Exempt orgs.-exempt status-non-partisan voter registration activities-grants made to orgs. by private foundations-taxable expenditures (PLR 201621016)
Rev. Proc. 2016-32, 2016-22 IRB 1019, 05/26/2016 User fee requests-letter rulings; determination letters (Rev. Proc. 2016-8,2016-1 IRB 243 is modified)
News Release 2016-76, 05/11/2016, IRC Sec(s). 6033; Exempt orgs.-information returns
Exempt orgs.-unrelated business taxable income-endowments-contractual arrangement with trust (PLR 201613014)
Private foundations-exempt status-transfer of assets between private foundations-termination of private foundation status (PLR 201609001)
Private foundations-set-asides-qualifying distributions (PLR 201606033)
Private foundations-exempt status-transfer of assets between private foundations-termination of private foundation status (PLR 201606030)
Voluntary employees' beneficiary assns.-exempt status-wages-employment taxes (PLR 201605015)
Exempt orgs.-exempt status-cemetery cos (PLR 201605019)
Private foundations-exempt status-transfer of assets between private foundations-termination of private foundation status (PLR 201603033)
Private foundations-exempt status-transfer of assets between private foundations-termination of private foundation status (PLR 201603034)
Orgs. required to notify secretary of intent to operate under 501(c)(4)-date of notice. (Notice 2016-9, 2016-6 IRB)
Exempt orgs.-low-income housing credits-safe harbor (PLR 201603032)
Notice 2016-9, 2016-6 IRB 306, 01/19/2016, IRC Sec(s). 506 Orgs. required to notify secretary of intent to operate under 501(c)(4)-date of notice.. ( Rev Proc 2016-10, 2016-2 IRB 270 )
Rev. Proc. 2016-10, 2016-2 IRB 270, 01/08/2016, IRC Sec(s). 509; Exempt orgs.-private foundation-determination letter procedure Rev. Proc. 2015-10,2015-2 IRB 262 is superseded.
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Exempt orgs.-exemption procedures ( Rev Proc 2016-5, 2016-1 IRB 188 )
Treasury DecisionsTD 9746, Private foundation defined-supporting orgs., Code Sec. 509 , 12/28/2015 TD 9605 (12/28/2012) was removed
Private foundation defined-supporting orgs (T.D. 9746)
Private foundations-taxable expenditures-failure to distribute income-abatement of first-tier excise taxes-reasonable cause (PLR 201547007)
Penalty excise taxes-private foundations and managers-taxable expenditures-constitutional claims. (Loren E. Parks, et al. v. Commissioner, 145 TC No. 12)
Penalty excise taxes-private foundation managers-agreement to making of taxable expenditures-willfulness-reliance on counsel (Loren E. Parks, et al. v. Commissioner, 145 TC No. 12)
Penalty excise taxes-second tier taxes-private foundations and managers-failure to correct taxable expenditures within taxable period (Loren E. Parks, et al. v. Commissioner)
Penalty excise taxes-private foundations-taxable expenditures-attempts to influence legislation; direct lobbying communications; ballot measures; nonexempt purposes-educational expenses; nonpartisan research (Loren E. Parks, et al. v. Commissioner, 145 TC No. 12)
Voluntary employees' beneficiary assns.-exempt function income-unrelated business taxable income (PLR 201545027)
Exempt orgs.-unrelated business taxable income-rents from real property (PLR 201544025 (TAM)
