TAX NEWS & ALERTS

Tax News & Alerts

  • 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 »
  • Filing season begins; IRS warns of refund delays

    Filing season begins; IRS warns of refund delays

    The 2017 tax filing season launched on January 23. The IRS predicted a few speedbumps for taxpayers, especially for taxpayers who file early in anticipation of early refunds. The agency expects to receive more than 150 million individual income tax returns. The vast majority of individual income tax returns will be filed electronically and the IRS has extra safeguards in place to protect taxpayers from cybercrime.Read More »
  • National Taxpayer Advocate calls for taxpayer-centric IRS

    National Taxpayer Advocate calls for taxpayer-centric IRS

    National Taxpayer Advocate Nina Olson, in a recent report to Congress, urged the IRS to change its culture from one that is enforcement-oriented to one that is service-oriented. Such a change, Olson provided, would create an environment that encourages taxpayer trust and confidence. In the report, Olson also highlighted key areas for tax simplification and the top-10 most litigated tax issues.Read More »
  • How Do I? Establish a profit motive for business activities

    How Do I? Establish a profit motive for business activities

    The IRS has rules that limit the deductibility of expenses and losses from a hobby or activity not engaged in for profit. If the IRS determines that an activity is not profit-driven, deductions from the activity are limited to the amount of income the activity generates. Losses from such activities cannot be used to offset other income, such as salary or investments.Read More »
  • IRS describes de minimis error safe harbor for information return penalties

    IRS describes de minimis error safe harbor for information return penalties

    The IRS has provided guidance that describes the de minimis safe harbor for avoiding the information return penalties created by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). In addition, the guidance clarifies that the safe harbor does not apply to intentional errors and in cases where the payor fails to file an information return or furnish a payee statement.Read More »
  • FAQ: What is transferee tax liability?

    FAQ: What is transferee tax liability?

    The prudent businessperson is always cautious when he or she is offered a great bargain on real estate, equipment, a business interest, or some other property that just might be too good to be true. Even in connection with ordinary business transactions but especially when considering taking over a property or business that in a bargain because of some legal wrinkle, you should consider whether there might be some tax liability attached to the bargain that could come back to haunt you down the road.Read More »
  • IRS releases official maximum FMVs for 2017 cents-per-mile/fleet-average valuation

    IRS releases official maximum FMVs for 2017 cents-per-mile/fleet-average valuation

    The IRS has announced the maximum fair market value (FMV) amounts that designate the proper valuation rule for employers calculating fringe benefit income from employer-provided automobiles, trucks, and vans first made available for personal use in 2017. Taxpayers with employer-provided vehicles within the designated FMV amounts may apply the vehicle cents-per-mile rule or fleet average valuation rule, as and when appropriate. Notice 2017-3 provides the current values.Read More »
  • February 2017 tax compliance calendar

    February 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 February 2017.Read More »
  • OH – Outdated rule rescinded

    OH – Outdated rule rescinded

    The Ohio Department of Taxation has rescinded a commercial activity tax (CAT) rule because it only applied to CAT taxpayers that had gross receipts from shipments into and out of a qualified foreign trade zone area from July 1, 2005 to December 31, 2006. OAC 5703-29-07, Ohio Department of Taxation, effective February 7, 2017Read More »
  • January 2017 tax compliance calendar

    January 2017 tax compliance calendar

    January 5 Employers. Semi-weekly depositors must deposit employment taxes for Dec 28–Dec 30. January 6 Employers. Semi-weekly depositors must deposit employment taxes for Dec 31 and Jan 1–Jan 3.Read More »
  • How do I? Know what records to discard

    How do I? Know what records to discard

    A new year may find a number of individuals with the pressing urge to take stock, clean house and become a bit more organized. With such a desire to declutter, a taxpayer may want to undergo a housecleaning of documents, receipts and papers that he or she may have stored over the years in the event of an IRS audit. Year to year, fears of an audit for claims for tax deductions, allowances and credits may have led to the accumulation of a number of tax related documents—many of which may no longer need to be kept.Read More »
  • OH – Historic rehabilitation and motion picture tax credits amended

    OH – Historic rehabilitation and motion picture tax credits amended

    Recently enacted legislation has amended the historic rehabilitation tax credit and motion picture tax credit programs and provided a financial institutions tax exemption for small business investment companies. The Ohio Director of Development Services may not grant an application for the historic rehabilitation tax credit to the owner of a catalytic project after the state fiscal biennium beginning July 1, 2017.Read More »
  • FAQ: Are some tax return deadlines changing in 2017?

    FAQ: Are some tax return deadlines changing in 2017?

    The Surface Transportation Act of 2015: Tax Provisions (enacted on Jul. 31, 2015) provided for major changes in certain tax return deadlines. To allow for a transition period for taxpayers to adjust to the new due dates, the new filing deadlines carried a delayed effective date: for tax returns for tax years starting on or after January 1, 2016. As a result, the upcoming 2017 filing season is the first year these changes will take place.Read More »
  • IRS extends eligibility rule waiver for taxpayers implementing “repair regulations”

    IRS extends eligibility rule waiver for taxpayers implementing “repair regulations”

    The IRS announced in December a one-year extension of the waiver of the eligibility rule for taxpayers making certain automatic accounting method changes under the final tangible property regulations, known as the “repair regulations.” The IRS also provided a transition rule.Read More »
  • Filing season launches January 23; some refunds may be delayed

    Filing season launches January 23; some refunds may be delayed

    The individual income tax filing season opens on January 23, 2017, the IRS has announced. The IRS also reminded taxpayers that the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (P.L. 114-113) may impact certain refunds in 2017.Read More »
  • IRS finalizes higher user fees for installment agreements

    IRS finalizes higher user fees for installment agreements

    As of January 1, 2017, some taxpayers may notice a marked rise in user fees associated with installment agreements, as guidance has released that finalized the higher user fees for such agreements. The user fee for installment agreements is now at $225. However, as expected, lower-income taxpayers remains the same.Read More »