TAX NEWS & ALERTS

Tax News & Alerts

  • Deducting Holiday Gifts

    Deducting Holiday Gifts

    Holiday gifts made to customers are generally deductible as ordinary and necessary business expenses as long as the taxpayer can demonstrate that such gifts maintain or improve customer goodwill. Such gifts must bear a direct relationship to the taxpayer's business and must be made with a reasonable expectation of a financial return commensurate with the amount of the gift...Read More »
  • Tax Reform

    Tax Reform

    Tax writers in Congress are set to begin debating and writing tax reform legislation. On September 27, the White House and GOP leaders in Congress released a framework for tax reform. The framework sets out broad principles for tax reform, leaving the details to the two tax-writing committees: The House Ways and Means Committee and the Senate Finance Committee. How quickly lawmakers will write and pass tax legislation is unclear...Read More »
  • 2018 Inflation Adjusted Tax Amounts

    2018 Inflation Adjusted Tax Amounts

    The Tax Code requires that federal income tax brackets and certain other figures be adjusted for inflation annually. Wolters Kluwer has projected the 2018 standard deduction, tax bracket amounts and other inflation-adjusted tax figures based on the relevant inflation data just released by the U.S. Department of Labor (DOL)...Read More »
  • Payroll Credit for Research Activities

    Payroll Credit for Research Activities

    IRS Chief Counsel, in generic legal advice (AM-2017-003), recently described when a qualified employer may take into account the payroll tax credit for increasing research activities. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) created the payroll credit aimed at start-ups with little or no income tax liabilities...Read More »
  • Employee or Independent Contractor?

    Employee or Independent Contractor?

    IRS continues campaign against independent contractor classification The IRS remains focused on an issue that doesn’t seem to be going away: the misclassification of workers as an independent contractor rather than an employee. Recently, the IRS issued still another fact sheet “reminding” employers about the importance of correctly classifying workers for purposes of federal employment taxes (FS-2017-9). Generally, employers must ... Read MoreRead More »
  • Student Loan Interest Deductions

    Student Loan Interest Deductions

    How do I deduct student loan interest? An eligible taxpayer can deduct qualified student loan interest on a qualified student loan for an eligible student’s qualified educational expenses at an eligible institution. The amount of the deduction is limited, and it is phased out for taxpayers whose modified adjusted gross income (AGI) exceeds certain thresholds. The maximum deduction allowed for ... Read MoreRead More »
  • Material Participation Ruling

    Material Participation Ruling

    Dentist persuades Tax Court of material participation in real estate business The Tax Court determined, in Zarrinnegar v. Commissioner, TC Memo. 2017-34, that a dentist by profession, was a real estate professional, and therefore could deduct rental real estate losses. As such, the losses were not barred by the passive activity rules. The taxpayer was a dentist married to another ... Read MoreRead More »
  • Tax Reform Debates Continue

    Tax Reform Debates Continue

    Lawmakers continue tax reform discussions Lawmakers from both parties spent much of June debating and discussing tax reform, but without giving many details of what a comprehensive tax reform package could look like before year-end. At the same time, several bipartisan tax bills have been introduced in Congress, which could see their way to passage. Tax law reform House Speaker ... Read MoreRead More »
  • Future Pension Payouts Not Counted as Asset

    Future Pension Payouts Not Counted as Asset

    The Tax Court, in Schieber v. Commissioner, TC Memo. 2017-32, found that the right to a continuing monthly payment state pension plan was not an asset in determining insolvency for purposes of exclusion from cancellation of indebtedness income. The court rejected the IRS’s argument that the ability of the taxpayers to use their monthly pension payments to continue to pay ... Read MoreRead More »
  • Lack of ACA Coverage Status Will Not Reject Returns

    Lack of ACA Coverage Status Will Not Reject Returns

    The IRS has announced that it will continue to process individual returns that do not report the taxpayer’s health coverage status under the Affordable Care Act (ACA). The IRS will accept returns that fail to indicate coverage, an exemption or a shared responsibility payment. The IRS had planned to reject these returns (known as “silent returns”) this filing season after ... Read MoreRead More »
  • Tax Regulations To Be Reviewed/Re-evaluated

    Tax Regulations To Be Reviewed/Re-evaluated

    The Treasury Department is to undertake a review and re-evaluation of tax regulations issued by the IRS since January 1, 2016. President Trump signed an Executive Order 13789 (“Identifying and Reducing Tax Regulatory Burdens”) ordering this action on April 21. Following its review and re-evaluation, the Treasury Department will make recommendations. Tax regulations The IRS typically issues many regulations every ... Read MoreRead More »
  • FAQ: Tax audit…what are my chances?

    FAQ: Tax audit…what are my chances?

    Audit coverage rates are at low levels, the IRS has reported. According to the IRS, the audit coverage rate for individuals fell 16 percent from FY 2015 to FY 2016. The 0.7 percent audit coverage rate for individuals was the lowest coverage rate in more than a decade, the agency added. Selection Process The raw audit numbers, of course, do ... Read MoreRead More »
  • Ohio Tax Appeal Jurisdiction Issue

    Ohio Tax Appeal Jurisdiction Issue

    Ohio Taxpayer lacked jurisdiction for appeal The Ohio Board of Tax Appeals did not have jurisdiction to consider the taxpayer’s appeal of the Tax Commissioner’s final determination regarding a use tax assessment because the taxpayer failed to specify any error in the commissioner’s determination. However, even if the board had jurisdiction, the taxpayer would not have shown that the subject ... Read MoreRead More »
  • Tax Reform Sooner than Later?

    Tax Reform Sooner than Later?

    Tax reform proceeds to possible summer enactment Lawmakers continue to debate comprehensive tax reform, aiming for a package to clear Congress and be signed into law by the President before summer. At the same time a “mini” tax reform package in an Affordable Care Act (ACA) repeal and replacement plan appears to have stalled in Congress. Tax reform Tax reform ... Read MoreRead More »
  • Vehicle Depreciation for 2017

    Vehicle Depreciation for 2017

    IRS Issues 2017 Inflation-Adjusted Vehicle Depreciation Dollar Limits The IRS has released the inflation-adjusted limitations on depreciation deductions for business-use passenger automobiles, light trucks, and vans first placed in service during calendar year 2017. All limitations are inflation-adjusted based upon October 2016 CPI amounts, with rounding conventions that account for almost all 2016 limits remaining the same for 2017 (only ... Read MoreRead More »
  • Lack of Proper Documentation Nixes Donation Deduction

    Lack of Proper Documentation Nixes Donation Deduction

    In a case that provides a lesson to anyone donating property to charity for which a deduction of more than $500 is claimed – get proof in writing and get it at the time you donate the property. After-the-fact substantiation, no matter how convincing, is not acceptable under the tax law to support a deduction. Case in point: The Tax ... Read MoreRead More »
  • FAQ…I received a letter from the IRS inquiring about a suspicious return

    FAQ…I received a letter from the IRS inquiring about a suspicious return

    Tax-related identity theft spikes during the filing season. Many taxpayers discover for the first time that they are victims of identity theft when they receive a letter from the IRS.Read More »
  • Tax scams proliferate during filing season

    Tax scams proliferate during filing season

    The filing season is the most active time of the year for tax scams. These scams take every shape and form, ranging from telephone calls to individuals to sophisticated schemes targeting employers and businesses. The goal of all these scams is identity theft. Using legitimate identities of unsuspecting individuals allows criminals to file fraudulent returns and claim bogus refunds.Read More »
  • Passport certifications will begin in early 2017, IRS posts on website

    Passport certifications will begin in early 2017, IRS posts on website

    The IRS has informed taxpayers via its website that the agency will begin, in early 2017, to remit certifications to the U.S. State Department for individuals who are seriously delinquent in paying their tax debt. Such certification could impact an individual’s ability to obtain or keep a U.S. passport. At this time, the IRS has not started certifying tax debt to the State Department, the agency reported on its website.Read More »
  • How do I?…claim the federal fuel tax credit

    How do I?…claim the federal fuel tax credit

    The first step is to determine if you qualify for the federal fuel tax credit. The IRS has uncovered significant fraud associated with the fuel tax credit and is watching for fraudulent claims. The credit is not available to most taxpayers but only to qualified taxpayers, such as taxpayers engaged in farming. However, some ineligible taxpayers claim the credit in order to inflate their refunds. Fuel tax credit fraud can result in a penalty of $5,000.Read More »
  • March 2017 tax compliance calendar

    March 2017 tax compliance calendar

    As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of March 2017.Read More »
  • Tax returns lacking ACA coverage status will not be rejected

    Tax returns lacking ACA coverage status will not be rejected

    The IRS has announced that it will continue to process individual returns that do not report the taxpayer’s health coverage status under the Affordable Care Act (ACA). The IRS will accept returns that fail to indicate coverage, an exemption or a shared responsibility payment. The IRS had planned to reject these returns (known as "silent returns") this filing season after having accepted them in past years. Taxpayers may, however, be contacted later, the IRS cautioned.Read More »
  • Congressional leaders highlight tax reform proposals

    Congressional leaders highlight tax reform proposals

    As the new administration and Congress get to work, tax reform is high on the agenda. Although legislative language has not been yet released, statements from tax writers in Congress shed some light on various proposals.Read More »
  • Dentist persuades Tax Court of material participation in real estate business

    Dentist persuades Tax Court of material participation in real estate business

    The Tax Court determined, in Zarrinnegar v. Commissioner, TC Memo. 2017-34, that a dentist by profession, was a real estate professional, and therefore could deduct rental real estate losses. As such, the losses were not barred by the passive activity rules.Read More »
  • IRS confirms automatic six-month extension for C corporations

    IRS confirms automatic six-month extension for C corporations

    The IRS has confirmed that a new revision of the Instructions for Form 7004 correctly reflects that calendar year C corporations are eligible for an automatic six-month extension. Code Sec. 6081(a) provides that the IRS may grant a reasonable extension of time for filing returns, so long as the extension is not more than six months, the IRS explained.Read More »
  • Future pension payouts not counted as asset in determining insolvency exclusion

    Future pension payouts not counted as asset in determining insolvency exclusion

    The Tax Court, in Schieber v. Commissioner, TC Memo. 2017-32, found that the right to a continuing monthly payment state pension plan was not an asset in determining insolvency for purposes of exclusion from cancellation of indebtedness income. The court rejected the IRS’s argument that the ability of the taxpayers to use their monthly pension payments to continue to pay off existing tax indebtedness was sufficient to disprove insolvency.Read More »
  • White House, Capitol Hill talk tax reform in 2017

    White House, Capitol Hill talk tax reform in 2017

    The change in administrations in Washington has generated a new focus on tax reform. The White House and lawmakers from both parties have discussed tax cuts, infrastructure spending, and more to encourage economic growth. However, the details of their plans have yet to be revealed. Tax reform legislation may be unveiled in February.Read More »
  • Surgeon’s ownership interest in medical center is passive activity

    Surgeon’s ownership interest in medical center is passive activity

    The Tax Court has determined that a taxpayer who held a minority interest in an limited liability company (LLC) in which he performed services was considered an investor in the LLC (Hardy, TC Memo. 2017-16, January 17, 2017). As such, he was allowed to treat income from the LLC as passive income, and more importantly, was not subject to self-employment tax on that income.Read More »
  • No reasoned explanation required for notice of deficiency; denial for deduction affirmed

    No reasoned explanation required for notice of deficiency; denial for deduction affirmed

    The Fourth Circuit Court of Appeals has affirmed that an IRS deficiency notice is not subject to the Administrative Procedure Act (APA) “reasoned explanation” requirement. Accordingly, the circuit court affirmed the Tax Court’s rejection of a corporation’s claimed deductions in Qinetiq US Holdings, Inc. & Subsidiaries, 2017-1 USTC ¶50,119, CA-4, January 6, 2017.Read More »
  • IRS makes awards to 400 whistleblowers in FY 2016

    IRS makes awards to 400 whistleblowers in FY 2016

    According to the IRS Whistleblower Office, the IRS made awards to 400 whistleblowers in fiscal year (FY) 2016. The awards totaled more than $61 million.Read More »