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Chief Counsel Advice

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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“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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Accounting change to reflect tangible property regs brings prior year audit protection

Accounting change to reflect tangible property regs brings prior year audit protection

Chief Counsel Advice 201614037 In emailed Chief Counsel Advice, IRS has concluded that a taxpayer that makes an accounting method change to reflect the 2013 tangible property regs rule regarding non-incidental materials and supplies, and does so via the “limited Code Sec. 481(a) adjustment,” is protected from IRS auditors making a prior year change to […]

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When do entities providing Medicare services face health insurer deduction limit on pay?

When do entities providing Medicare services face health insurer deduction limit on pay?

Chief Counsel Advice 201616008 In Chief Counsel Advice (CCA), IRS explains which entities providing Medicare services may face the Code Sec. 162(m)(6) health insurer compensation deduction limit. The answer depends on whether the entity is risk-bearing, whether it is licensed as a health insurer, and whether a legal relationship exists between covered individuals and the […]

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IRS OKs liberal reading of “otherwise excludible employees” for plan testing purposes

IRS OKs liberal reading of “otherwise excludible employees” for plan testing purposes

Chief Counsel Advice 201615013 In Chief Counsel Advice (CCA), IRS approved a liberal reading of who are “otherwise excludable employees” for purposes of the Code Sec. 410(b)(4)(B) qualified plan coverage testing and the Code Sec. 401(k)(3) nondiscrimination tests for cash or deferred arrangements (CODAs). It concluded that it was a permissible application of the Code […]

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Withholding agent not penalized for using invalid TIN provided by foreign payee

Withholding agent not penalized for using invalid TIN provided by foreign payee

Chief Counsel Advice 201615012 In Chief Counsel Advice, IRS has concluded that it should not impose penalties on withholding agents in every instance where an IRS audit determines that there were any invalid taxpayer identification numbers (TINs) reported on Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. Rather, IRS said, such penalties should […]

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Relative value of risk weighted assets might be used in apportioning supportive expenses

Relative value of risk weighted assets might be used in apportioning supportive expenses

Chief Counsel Advice 201614031 In Chief Counsel Advice (CCA), IRS has concluded that, at least theoretically, it was possible that a taxpayer could use the relative value of risk weighted assets as a reasonable key for apportioning deductions for overhead, general, and administrative expenses (i.e., “supportive expenses”) under Reg. § 1.861-8 to determine expenses effectively […]

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IRS instructs its attorneys on how to handle disregarded CDP hearing requests

IRS instructs its attorneys on how to handle disregarded CDP hearing requests

Chief Counsel Notice 2016-008 Chief Counsel Notice CC-2016-008 (Apr. 4, 2016). In a Chief Counsel Notice, IRS has updated guidance to its attorneys for handling frivolous requests for hearings as part of collection due process (CDP) cases. The new guidance instruct its attorneys, in light of the DC Circuit’s holding in Rsykamp, not to contest […]

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Chief Counsel attorneys instructed on CDP proceedings following TEFRA audit

Chief Counsel attorneys instructed on CDP proceedings following TEFRA audit

Chief Counsel Notice 2016-007 Chief Counsel Notice 2016-007, Application of the Results of TEFRA Partnership Procedures in Collection Due Process Cases (Mar. 21, 2016). In a Chief Counsel Notice, IRS has instructed its attorneys on how the results from a TEFRA unified partnership audit and litigation procedure (so-called because those procedures were introduced in the […]

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Medicare shared savings amounts due provider not accruable in year service provided

Medicare shared savings amounts due provider not accruable in year service provided

Chief Counsel Advice 201607026 In Chief Counsel Advice (CCA), IRS has concluded that a health care provider shouldn’t accrue, in the year it provided service, amounts payable by the U.S. Department of Health and Human Services (HHS) to the provider under a program under which the provider could share in amounts that it saved Medicare. […]

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Chief Counsel Advice -only part of bank’s purchase of frequent flier miles was subject to air transport tax

Chief Counsel Advice -only part of bank’s purchase of frequent flier miles was subject to air transport tax

Chief Counsel Advice 201606028 In Chief Counsel Advice, IRS has concluded that, for an arrangement under which a bank and an airline co-branded a credit card which awarded frequent flier miles to credit card customers, and the bank made a single payment to the airline for both the miles and access to the airline’s customer […]

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Tax consequences of member’s guarantee of LLC’s qualified non-recourse financing

Tax consequences of member’s guarantee of LLC’s qualified non-recourse financing

Chief Counsel Advice 201606027 In Chief Counsel Advice (CCA), IRS has determined the tax effect, for purposes of the basis and at-risk limitations applicable to a member’s loss deductions attributable to an LLC taxed as a partnership, of another member’s guarantee of the LLC’s qualified non-recourse financing debt. The CCA generally held that the guarantee […]

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IRS reflects PATH Act in updated instructions to its attorneys on appellate review venue

IRS reflects PATH Act in updated instructions to its attorneys on appellate review venue

Chief Counsel Notice 2016-006 In a Chief Counsel Notice, IRS has updated guidance to its attorneys with respect to the venue for appeals of certain Tax Court cases for which the amount of deficiency is not the issue. The updates reflect changes made by the recently-enacted Protecting Americans from Tax Hikes (PATH) Act. Background. Code […]

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Aircraft used for business and personal use is single property for like-kind qualification purposes

Aircraft used for business and personal use is single property for like-kind qualification purposes

Chief Counsel Advice 201605017 In Chief Counsel Advice involving an exchange of two aircrafts intended to qualify under Code Sec. 1031, one of which was used by an individual for personal purposes as well as for productive use in a trade or business or investment, IRS determined that the aircraft was a single property, the […]

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No extended NOL carryback for successor of TARP recipient

No extended NOL carryback for successor of TARP recipient

Chief Counsel Advice 201605018 In Chief Counsel Advice (CCA), IRS concluded that a taxpayer who acquired a Troubled Asset Relief Program (TARP) recipient in a statutory merger was prevented by the Code Sec. 381 attribute carryover rules from electing the extended net operating loss (NOL) carryback in Code Sec. 172(b)(1)(H). Background—net operating loss carrybacks. Code Sec. […]

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IRS may be able to adjust repurchased debt COD income deferred from a closed year

IRS may be able to adjust repurchased debt COD income deferred from a closed year

Chief Counsel Advice 201604017 In Chief Counsel Advice (CCA), IRS has concluded that it may be able to adjust the amount of cancellation of debt (COD) income that a taxpayer has elected to defer under Code Sec. 108(i) even if the tax year of the election is closed. It instructed its attorneys who encounter such […]

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IRS sets out treatment of life insurance co.’s separate accounts invested in partnership funds

IRS sets out treatment of life insurance co.’s separate accounts invested in partnership funds

Chief Counsel Advice 201603023 In Chief Counsel Advice (CCA), IRS has explained how to treat a life insurance company’s “company’s share” of dividends received deductions (DRDs) for separate account assets invested in partnership funds under the Code Sec. 812 proration rule. IRS also addressed the treatment of the partnership fund investment fees. Background. In determining a […]

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IRS admits rules are needed on penalty for intentional failure to file electronically

IRS admits rules are needed on penalty for intentional failure to file electronically

Chief Counsel Advice 201603031 IRS has issued a Chief Counsel Advice (CCA) which notes that it hasn’t issued rules for calculating the penalty for intentionally failing to file information returns electronically. The CCA suggests internal IRS procedures for arriving at future IRS policy in this matter and sets out suggestions of how that calculation might […]

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IRS draws conclusions regarding taxpayer’s income from nonqualified stock option

IRS draws conclusions regarding taxpayer’s income from nonqualified stock option

Chief Counsel Advice 201603025 In Chief Counsel Advice (CCA), IRS drew various conclusions regarding a taxpayer recognizing income form a nonqualified stock option that he received, including whether the underlying stock was readily tradable on an established securities market. Background. Under Code Sec. 409A(a)(1)(A), all amounts deferred under a nonqualified deferred compensation (NQDC) plan for all […]

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Substance-over-form doctrine applied to transfer of funds from foreign sub to domestic parent

Substance-over-form doctrine applied to transfer of funds from foreign sub to domestic parent

Chief Counsel Advice 201552027 In Chief Counsel Advice (CCA), IRS has concluded that a series of transfers of funds by multiple, related entities should not be respected for Federal income tax purposes. Background. Substance over form is a judicial doctrine in which a court looks to the objective economic realities of a transaction rather than to […]

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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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Member CA Bar Member Orange County Bar US Tax Court Attorney