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IRS

Pending appeal of criminal conviction motion doesn’t affect timing of restitution assessment

Pending appeal of criminal conviction motion doesn’t affect timing of restitution assessment

Chief Counsel Advice 201616011 In an emailed Chief Counsel Advice, IRS has concluded that the fact that an individual has a pending appeal of his motion to vacate his criminal conviction does not affect IRS’s ability to assess the amount of criminal restitution owed it under a court order. Background. 18 USC 3556 provides for mandatory […]

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Easement clause failed to protect charity in perpetuity, so no charitable deduction

Easement clause failed to protect charity in perpetuity, so no charitable deduction

Carroll, (2016) 146 TC No. 13 The Tax Court has held that a clause in an easement, which provided for the amount the donee would receive if conditions caused an extinguishment of the perpetual conservation restriction, did not meet the requirements of a reg under the charitable deduction Code section that requires that a conservation […]

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Final, temporary & proposed regs explain new PEO voluntary certification program

Final, temporary & proposed regs explain new PEO voluntary certification program

IR 2016-74 T.D. 9768, “Certified Professional Employer Organizations; Final and Temporary Regulations.” Proposed Regs [REG-127561-15], “Certified Professional Employer Organizations; Notice of Proposed Rulemaking and Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations.” IRS has issued final and temporary regs implementing a new voluntary certification program for professional employer organizations (PEOs), which was authorized by […]

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Recent proposed Code Sec. 385 (debt versus equity) regs would bring sweeping changes

Recent proposed Code Sec. 385 (debt versus equity) regs would bring sweeping changes

Preamble to Prop Reg 04/05/2016; Prop Reg § 1.385-1, Prop Reg § 1.385-2, Prop Reg § 1.385-3, Prop Reg § 1.385-4 If finalized, recently issued proposed Code Sec. 385 regs would introduce sweeping changes to the treatment of related-party indebtedness, including extensive due diligence and documentation requirements (which would be applicable to cash pooling arrangements). […]

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Interests in partnership investing in student loans treated as obligations in registered form

Interests in partnership investing in student loans treated as obligations in registered form

PLR 201614026 In a private letter ruling (PLR), IRS has concluded that interests in a partnership organized to invest in student loans using funds from domestic feeder and foreign feeder partnerships will be treated as being obligations in registered form for purposes of Code Sec. 163(f)(1). Background. Under Code Sec. 163(f)(1), there’s no deduction for interest […]

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A guide to drawing down your savings in retirement

A guide to drawing down your savings in retirement

As reported in the LA Times, “A guide to drawing down your savings in retirement.” The approach of retirement should be an exciting time for 50- and 60-somethings. But when the issue is your finances — and whether you’ve saved enough to last the rest of your life — excitement can quickly be overridden by […]

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Tax Court – No IRS abuse in rejecting offer-in-compromise where taxpayer had cash and receivables

Tax Court – No IRS abuse in rejecting offer-in-compromise where taxpayer had cash and receivables

Strong, TC Memo 2016-70 The Tax Court has upheld IRS’s rejection of a taxpayer’s offer-in-compromise (OIC) that was based on doubt as to collectibility. The Court rejected the taxpayer’s argument that IRS abused its discretion by considering his business receivables as business assets for purposes of the OIC.  Click here for the Opinion of the […]

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Taxpayer had to compute depletion allowance under two separate methods

Taxpayer had to compute depletion allowance under two separate methods

Legal Advice Issued by Field Attorneys 20161401F In a redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that where a taxpayer that mined minerals and used some of its mined mineral to manufacture certain products, it had to perform two Code Sec. 613 percentage depletion allowance calculations: one for the mineral it […]

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Final regs allow wider range of foundation program-related investments

Final regs allow wider range of foundation program-related investments

T.D. 9762, 04/21/2016; Reg. § 53.4944-3 IRS has issued final regs that provide guidance to private foundations on program-related investments (PRIs) — i.e., certain types of investments made by private foundations for charitable purposes that are excepted from treatment as “jeopardizing investments” subject to excise tax under Code Sec. 4944. The final regs, which largely […]

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Washington Alert – IRS LITC application period is underway; Estimated federal budget deficit; IRS webinar May 19 titled “Understanding the Universal Availability Rules in a 403(b) Retirement Plan”

Washington Alert – IRS LITC application period is underway; Estimated federal budget deficit; IRS webinar May 19 titled “Understanding the Universal Availability Rules in a 403(b) Retirement Plan”

The application period for the 2017 Low Income Taxpayer Clinic (LITC) grant process is now underway and will run through June 20. (IR 2016-70) The LITC program awards matching grants of up to $100,000 per year to qualifying organizations for the development, expansion or maintenance of a LITC. As described by IRS, LITCs offer assistance […]

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AOTC denied for year following the year in which tuition was prepaid

AOTC denied for year following the year in which tuition was prepaid

McCarville, TC Summary Opinion 2016-14 In a summary opinion, the Tax Court has held that a cash-basis, calendar-year taxpayer who prepaid college tuition expenses for a semester that began during the first three months of the following year could not claim the American Opportunity Tax Credit (AOTC) for the year in which the semester began. […]

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Tax Court – donee received only life insurance protection, so split dollar economic benefit regime applied

Tax Court – donee received only life insurance protection, so split dollar economic benefit regime applied

Estate of Morrissette, (2016) 146 TC No. 11 The Tax Court has examined the terms of a split dollar life insurance arrangement, determined that the party that received the funds to pay the premiums from the other party received no economic benefit other than current life insurance protection, and therefore ruled that the “economic benefit […]

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Washington Alert – IRS needs more employees; IRS seeking applicants for Internal Revenue Service Advisory Council (IRSAC); TIGTA report on premium tax credit (PTC) claims; IRS accepting applications for the Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grant programs

Washington Alert – IRS needs more employees; IRS seeking applicants for Internal Revenue Service Advisory Council (IRSAC); TIGTA report on premium tax credit (PTC) claims; IRS  accepting applications for the Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grant programs

IRS will soon begin the first wave of a plan to hire up to 700 employees to serve in enforcement positions, IRS Commissioner John Koskinen told agency employees in a May 3 memo. This will mark “the first significant enforcement hiring in over five years,” Koskinen wrote. The initial wave of hiring will fill entry-level […]

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Final material advisor list penalty reg somewhat less harsh than earlier proposed reg

Final material advisor list penalty reg somewhat less harsh than earlier proposed reg

T.D. 9764, 04/27/2016; Reg. § 301.6708-1 IRS has issued a final reg on the Code Sec. 6708 penalty for material advisors’ failure to make available upon IRS’s request lists of advisees with respect to reportable transactions. The final reg makes a number of changes to the proposed reg, most of which will somewhat lessen the […]

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IRS will withdraw parts of recently-issued proposed pension plan nondiscrimination regs

IRS will withdraw parts of recently-issued proposed pension plan nondiscrimination regs

Ann. 2016-16, 2016-18 IRB IRS has announced that it will withdraw certain provisions contained in proposed regs issued this past January that would have changed nondiscrimination requirements applicable to qualified retirement plans. Background — before the proposed regs. In general, under Code Sec. 401(a)(4), a plan is a qualified plan only if the contributions or […]

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No Tax Court jurisdiction in worker classification case because there was no IRS audit

No Tax Court jurisdiction in worker classification case because there was no IRS audit

B G Painting, TC Memo 2016-62 The Tax Court has held that IRS’s determination that a taxpayer’s worker was its employee, in response to the employee’s request for that determination under IRS’s SS-8 program, did not meet the criteria necessary to provide the Tax Court with jurisdiction over the taxpayer’s petition to review IRS’s determination. […]

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Taxpayer must report share of partnership income even though he was unaware there was income

Taxpayer must report share of partnership income even though he was unaware there was income

Lamas-Richie, TC Memo 2016-63TC Memo 2016-63 The Tax Court has concluded that a gossip blogger was liable for tax on his distributive share of partnership income that was not actually distributed to him and of which he was not aware until IRS began examining his return for the year at issue. However, the Court declined […]

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Jet service activity wasn’t for profit, so taxpayer can’t claim losses in excess of income

Jet service activity wasn’t for profit, so taxpayer can’t claim losses in excess of income

Hoffmann, TC Memo 2016-69 The Tax Court has concluded that a taxpayer was not entitled to deduct losses from his jet service activity that exceeded the amount of income derived therefrom because the activity was not conducted with the intent of generating a profit. The Court found that, contrary to the taxpayer’s argument that he […]

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Tax Court – no clear link from financial problems to not paying tax, so penalties, liens, levies applied

Tax Court – no clear link from financial problems to not paying tax, so penalties, liens, levies applied

Nutrition Formulators Inc., TC Memo 2016-60 The Tax Court has held that an employer did not have reasonable cause that would excuse penalties for failure to deposit employment taxes, failure to pay employment taxes shown on its return and failure to timely file a return, and that IRS settlement officers acted properly in sustaining lien […]

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“Bad boy” carve-outs don’t automatically end treatment as nonrecourse liability

“Bad boy” carve-outs don’t automatically end treatment as nonrecourse liability

Legal Advice Issued by Associate Chief Counsel 2016-001 Legal Advice Issued by Associate Chief Counsel, “Nonrecourse Carve-Out” Guarantee of a Partnership Liability. In Legal Advice Issued by Associate Chief Counsel, IRS — reversing its previous position — has concluded that if a partner’s guarantee of a partnership’s nonrecourse obligation is conditioned on the occurrence of […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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