Taxpayer Not Allowed to Defer Income on Sale of Partnership Interest

Article:  A partner in a consulting partnership who received restricted stock in the sale of her interest in the partnership to a corporation and agreed by contract to report the full value of the stock in income in the year the stock was transferred could not defer including part of the
Published on January 28, 2011

Revenue Ruling on S Elections for Partnerships Converting to Corporations

Article:  The IRS has issued a revenue ruling that addresses the question of whether, when a partnership becomes a corporation for federal tax purposes, it is eligible to elect to be taxed as an S corporation in its first tax year.
Published on January 28, 2011

Protecting Refunds of Certain Overpaid Deficiency Interest

Article:  Disputes regarding interest issues are not uncommon.
Published on January 28, 2011

The National Taxpayer Advocates Annual Report to Congress (Part I)

Article:  In January 2009, Nina Olson, the National Taxpayer Advocate, presented her annual report to Congress, outlining the IRS system and legislative suggestions for improving the federal tax system.
Published on January 28, 2011

Textron A Still Uncertain Future for Tax Accrual Workpapers

Article:  A significant case focusing on application of the work-product doctrine to tax accrual workpapers is Textron Inc., 507 F. Supp. 2d 138 (D.R.I. 2007). As litigation on this question enters its fourth year, it remains unclear to what extent the work-product doctrine protects tax accrual workpapers and how to effectively
Published on January 28, 2011

Consent to Extend the Statute of Limitation

Article:  Sec. 6501(c) allows the IRS and a taxpayer to consent in writing to extend the statute of limitation to assess tax.
Published on January 28, 2011

Estate Planning While We Sit, Watch, and Wait

Article:  Despite the impending confusion, there are some steps tax practitioners can take in working with clients to ensure their estates are in the best position over the next few years.
Published on January 28, 2011

Should a Company Elect to Defer Cancellation of Debt

Article:  The American Recovery and Reinvestment Act of 2009 provides certain business debtors with a cancellation of debt (COD) income deferral election under new Sec. 108(i) for reacquisitions by the debtor or by certain related parties of applicable debt instruments after December 31, 2008, and before January 1, 2011.
Published on January 28, 2011

Tax Shelter Transactions Disregarded

Article:  The Fifth Circuit joined the majority of circuits and held that a lack of economic substance will invalidate the results of a transaction even if a taxpayer had a genuine motive other than tax avoidance for entering into the transaction.
Published on January 28, 2011

Deducting Losses for Defrauded Investors

Article:  This article considers theft losses “incurred in an activity engaged in for profit.” These investment theft losses are not subject to the 10% of AGI reduction for losses of personal use property, the 2% of AGI floor for miscellaneous itemized deductions, or the itemized deduction phaseout rules of Sec. 68.
Published on January 28, 2011

IRS Issues Optional Safe-Harbor Treatment for Victims of Ponzi Schemes

Article:  The IRS recently issued two rulings about the tax treatment of victims of Ponzi schemes and similar financial frauds.
Published on January 28, 2011

Effect of Debt Recharacterization on Worthless Securities Deductions

Article:  The IRS recently addressed concerns that the recharacterization of intercompany debt as common equity might prevent a worthless securities deduction.
Published on January 28, 2011

Guidance on Sales and Purchases of Life Insurance Contracts

Article:  The IRS released two revenue rulings that provide guidance for sellers and purchasers of life insurance contracts.
Published on January 28, 2011

IRS Clarifies Guidance on Small Business NOL Carrybacks

Article:  The IRS has issued Rev. Proc. 2009-26, which clarifies the guidance in Rev. Proc. 2009-19 on how small businesses can elect to carry back 2008 net operating losses (NOLs) for three, four, or five years, as provided for by Sec. 172(b)(1) (H) (instead of the usual two years).
Published on January 28, 2011

Report of Foreign Bank and Financial Accounts Significant Revisions and Severe Penalties

Article:  This article discusses new traps for the uninitiated created by these revisions and the new reporting requirements for certain taxpayers who previously may not have been required to file this form.
Published on January 28, 2011