| Ed Zollars' Tax Update Podcast |
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| 1. |
Gadgets and Gizmos |
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This week's presentation is based on a presentation I made for the Virginia Society of CPAs' 8th Annual Industry Conference in Williamsburg on May 28, 2009 on gadgets and gizmos. The presentation includes a look at:Novatel's MifiApple's Airport... |
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| 2. |
The Education of the Taxpayer from a Business Perspective |
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Education incentives have been a favorite of Congress in recent years, but this week we look at the old favorite of education as a business deduction, a provision covered by regulations last updated back in 1967. The Tax Court had cause to look... |
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| 3. |
The Limits on Taking a Return Position |
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Last year there was lots of discussion regarding the changes to Â6694 and how tax professionals were to apply the standards there against return positions. However, while the standard to be applied may have changed, there were standards in place... |
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| 4. |
Net Operating Loss Guidance: Let's Try This One Again |
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The IRS has issued a revised ruling on the use of a net operating loss under the new rules Congress added in February. The new ruling, Revenue Ruling 2009-26, updates and liberalizes the guidance previously given in Revenue Ruling 2009-19 issued... |
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| 5. |
What's Up Doc? Employee or Not? |
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The definition of an employee is this week's key issue--and we look at the matter in the case of Maimon v. Commissioner, TC Summary Opinion 2009-53. Dr. Maimon attempted to argue that he was not an employee of the professional corporation he worked... |
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| 6. |
A Matter of Time (And Innocent Spouses) |
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The Tax Court recently decided a pair of cases related to the innocent spouse provisions of Â6015 and time limits on filing for relief. In the case of Mannella v. Commissioner, 132 T.C. No. 10 the Tax Court held that even if the notice of intent... |
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| 7. |
A Defining Moment-Brokerage Trade or Business |
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The IRS has shown recent interest in disputing whether real estate agents meet the requirements to be treated as real estate professionals that can use the rules of Â409(c)(7) to treat rental real estate under the standard passive activity rules rather... |
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| 8. |
The Case of the Missing Cattle-Overvaluation Penalty |
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Can nonexistent cattle be overvalued? The Ninth Circuit, disagreeing with the Tax Court and other circuits, says it cannot be in the case of Keller v. Commissioner, 2009 TNT 37-17 reversing on this issue the Tax Court's decision in TC Memo 2006-131.The... |
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| 9. |
It's a Matter of Trust Fundsâthe Responsible Person Penalty |
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This week we look at a case dealing with the trust fund recovery penalty under Â6672. In the case of Richard A. Smith v. United States, 2009 TNT 30-6, CA10, (http://ca10.washburnlaw.edu/cases/2009/02/07-4210.pdf) the Tenth Circuit refused to overturn... |
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| 10. |
Losses and Choices-Stimulus Bill Net Operating Loss Rules |
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The new American Recovery Reinvestment Act of 2009 has a number of tax provisions, and this week's podcast looks at the small business net operating loss provisions of the Act. This provision will require action for some taxpayers within 60 days... |
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| 11. |
Housing Fiasco of a Different Sort-Casualty Loss Issues |
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Housing problems are all over the news (and with some of our clients), but today's story is a housing problem of a different sort. We look at a case where lots of things went wrong in building a taxpayers' dream home where the taxpayers attempted... |
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| 12. |
A Matter of Timing-When Income and Deductions are Reported |
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What if a customer tells you they are going to reduce what they pay you for the work you just delivered to them because you owe them to fix for a bad job you did on an earlier contract? If you are on the accrual basis, can you reduce your accrued... |
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| 13. |
Home is Where the Job Is |
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This week I look at a case involving a Northwest Airlines mechanic who was laid off and ended up using his "bumping" rights in other cities while hoping to return to his original home base. The question of whether the taxpayer could deduct... |
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| 14. |
Sharing the Credit-IRS Rules on Section 36 Provision |
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Last year when Congress added the first-time homebuyer credit found in Section 36, they included the ability for unmarried individuals who jointly acquire a residence to allocate the credit among themselves, and gave the IRS the ability to write the... |
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| 15. |
Debt, Foreclosures and the Tax Law |
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The new year opens up with a podcast based on a topic that was part of a panel I was a part of at the Arizona Forum for Improvement of Taxation's winter conference. I spoke with attorney Tracy Essig of Phoenix regarding these matters. The... |
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| 16. |
Medical Expenses: Testing the Limits |
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Medical expenses were the issue this week in the case of Magdalin v. Commissioner, TC Memo 2008-293. In this case the taxpayer had paid expenses for obtaining eggs and the services of a surrogate mother, and argued that these expenses should be... |
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| 17. |
Self-Employed or Not? |
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After a bit of a break while I was out speaking in the past couple of weeks in Nevada, California, Ohio and Virginia we return to a Thanksgiving Day podcast dealing with self-employment taxes and employee status. We look at the Tax Court's ruling... |
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| 18. |
Section 6694 Saga Developments-An Update After Latest Revision |
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The podcast this week is based on a presentation I made Thursday at the Arizona Tax Institute on the current state of Section 6694. The session was scheduled back a few months ago, but proved timely given recent tax law changes. A copy of... |
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| 19. |
S Corporation Debt and How to Not End Up With Basis |
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We continue with issues related to S Corporation debt and the many ways to end up not being able to use debts to deduct losses flowing through. This week we look at the Tax Court's opinion in the case of Russell v. Commissioner, TC Memo 2008-246.The... |
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| 20. |
Closing the Open Door-S Corporation Debt |
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The IRS has issued final regulations on S Corporation open account debt that will change the way that many clients have to deal with their loans to the corporation. These changes are effective immediately, so we have to understand how these rules... |
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| 21. |
Too Late to Elect |
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Another taxpayer found out well after filing his return with less than stellar results from his trading activities that there had been an option to file an election under Â475(f) to use mark to market accounting which also converts the transactions from... |
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| 22. |
"Creative Planning" Creates Fraud Penalty |
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This is a "travel" podcast of sorts this week--the materials were prepared on a Southwest Airlines 737 flying from Phoenix to Baltimore, and recorded in the Hotel Roanoke in Roanoke, Virginia. This week's topic doesn't deal with any of... |
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| 23. |
We Just Disagree-What is the Meaning of In Connection With? |
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We look this week at a difference in application of IRC Â162(k) between the Ninth Circuit Court of Appeals and the United States Tax Court given the Tax Court's decision in Ralston Purina v. Commissioner, 131 TC No. 4 that dealt with the taxpayer's attempt... |
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| 24. |
At Death Do Payments Stop? Alimony Revisited |
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The Ninth Circuit Court of Appeals this week affirmed the Tax Court's decision in the case of Johanson and Melzig v. Commissioner, TC Memo 2006-105 involving alimony. In its original decision, the Tax Court expressed exasperation at having to yet... |
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| 25. |
Delayed Rebate-Tax Status of Accrued Rebates |
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Accounting issues we often run into involve the differences between tax and GAAP treatment of items, and this week we look at one such case involving the time for recognizing an expense. In this case, the matter involved rebates and we look at... |
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| 26. |
Authoritative Support-Getting the Required Support for a Tax Position |
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We review the requirements found in the regulations for obtaining the required support for a tax position, concentrating on the methods outlined in Reg. Â1.6662-4(d) in the definition of "substantial authority" which are cross referenced multiple... |
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| 27. |
Keeping Things Open-Life Insurance Demutualization Case |
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This week we look at the Recent United States Court of Federal Claims decision in Fisher, Trustee v. United States, 2008 TNT 154-7 where the court sided with the taxpayer and held that the proper treatment of amounts received in lieu of shares in the... |
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| 28. |
Section 108 Proposed Regulations for S Corporations |
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The IRS issued new proposed regulations to explain the reduction of the NOL substitute in an S corporation setting when cancellation of debt is excluded from the S corporation's income under Section 108. While the regulations are in proposed form... |
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| 29. |
I Wish That Hadn't Worked--Section 83(b) Election Regret |
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This podcast is the sequel to a November 2006 podcast on the same case--that of Kadillak v. Commissioner where an individual who was caught by the "dot bomb" crash of the technology stock of his former employer attempted to mitigate the damage... |
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| 30. |
Home Run-A Look at Some Tax Provisions in the New Housing Law |
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In a special podcast, we look at the just passed American Home Rescue and Foreclosure Prevention Act of 2008, taking a detailed look at a few tax provisions in that bill of interest. We look at the new, refundable first time homeowners credit,... |
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| 31. |
Heeding Warnings-Taxpayer Penalized After Preparer Shopping |
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In the past year we've talked a lot about the preparer standards and tax return positions. This week, in the case of Wadsworth v. Commissioner, TC Memo 2008-171, we see a real world situation where a tax professional decided a position was not... |
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| 32. |
Virtual Machines and Tax Practice |
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I gave a presentation at the offices of the Arizona Society of CPAs on the use of virtual machines to deal with the transition from Windows XP to Vista in a tax practice. This podcast is based on that presentation, and it will be fairly useful... |
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| 33. |
Getting Started AutomaticallyâIRS Modifies Rules for Start Up and Organization Costs |
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The IRS issued new temporary regulations that deal with start-up and corporate and partnership organization costs. Interestingly enough, the new regulations now create an automatic election to expense/amortize all such costs, and treat problems... |
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| 34. |
S Corporations and AAA |
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The IRS this week issued some relatively unsurprising guidance on the treatment of life insurance and an S corporation's accumulated adjustments account, so this week we'll look at the more general issues of the relevance (and lack of relevance) of AAA... |
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| 35. |
IRS Releases New FAQ on HSAs |
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The IRS has issued new guidance in the form of a series of questions and answers related to Health Savings Account in Notice 2008-59. This podcast goes over the various items covered in this notice, and some of the planning and design opportunities... |
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| 36. |
Proposed Regulations for Preparer Penalties - Part Two |
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This is part two of a series of two podcasts on the
proposed regulations for preparer penalties released recently. .The materials are at http://edzollars.com/2008-06-23_Penalty.pdf .The podcast is sponsored by Leimberg Information Services, on... |
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| 37. |
Proposed Regulations for Preparer Penalties - Part One |
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This is the first of what will be a series of two podcasts on the proposed regulations for preparer penalties released here recently. Considering the length of the regulations and podcast, the first hour is in this file to listen to and digest,... |
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| 38. |
Who is Knocking at Your Door? Computer Security for Financial Professionals |
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Securing our client's data is the responsibility of all of those in tax practice. This past week I gave a presentation at the Arizona Society of CPA's Financial Planning Conference on this matter, and that presentation serves as the basis for this week's... |
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| 39. |
Step or No Step-Holman Case |
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This week we look at the step transaction doctrine and where the line is drawn when we deal with the application of the step transaction doctrine in the formation of a family limited partnership. The IRS attempted to use their victory in the Senda... |
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| 40. |
Poor Records Not Equated to Fraud |
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This week we look at a Court of Claims case that deals with an IRS examination and the imposition of the fraud penalty--a penalty the Court of Claims found was not justified. The case is the one of Gagliardi v. United States, 2008 TNT 98-20, and... |
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| 41. |
Not a Mere Technicality-SEP Disqualified |
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Simplified employee pensions (SEPs) are a popular retirement plan for extremely small businesses, with one of the key attractions being that don't require many of the formalities of regular qualified plans. But that has led to taxpayers treating... |
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| 42. |
Partnership Liabilities, Tax Shelters and Different Views of the Same |
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The Fifth Circuit came down with a ruling in Kornman & Associates, Inc. v. United States on whether a taxpayer who set up a Son of BOSS style shelter would get the benefit that was expected--and the taxpayer was disappointed. The case offers... |
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| 43. |
All IRS Employees Are Not Equal |
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Since we've discussed mailing returns in previous podcasts, this time we look at the problems a taxpayer who tries to hand file a return can run into getting that done correctly. In the case of Allnut, Sr. v. Commissioner, 2008-1 USTC Â50,310 the... |
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| 44. |
Sloppiness and the Tax Shelter |
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Partnership taxation is one of those areas where things may not work exactly as many practitioners expect, and those unexpected workings are things that tax shelter promoters have attempted to make use of. But if you are going to try and use the... |
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| 45. |
Qualified Joint Venture and Memo on Self-Employment Tax |
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This week we follow the continuing saga of the self-employment tax and qualified joint venture that we've been following since the early part of this year. This week we analyze CCA 200816030 issued by the IRS that outlines the "new improved"... |
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| 46. |
The Mailbox Rule Comes Up Once Again |
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The issue of whether Â7502(c) provides the exclusive means to prove timely filing of a document by a taxpayer is addressed yet again by the courts--and what the Third Circuit had to say, the IRS didn't like hearing. In the case of Philadelphia... |
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| 47. |
Was it a Gift or Compensation? The Tax Court Knows |
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After a hiatus at the end of tax season, we return with a new show dealing with an issue of whether a payment to a person was compensation income or a gift. The case in question is the case of Larsen v. Commissioner, TC Memo 2008-73.The materials... |
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| 48. |
Upon Further Review-Self-Employment Tax Issues |
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The self-employment tax is our topic for this week, specifically dealing with two topics. We revisit an issue last visited in the early days of the podcast (back in June 2005) of the treatment of LLC members for self-employment tax purposes. ... |
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| 49. |
CPA Says Error, IRS Says Accounting Method |
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The question of whether a problem on a return was an error or a method of accounting is important, as we'll discuss this week looking at the Sixth Circuit's ruling in the case of Huffman v. Commissioner, where the appeals court sustained the 20006 ruling... |
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| 50. |
Risky Business - LLC Debt Restoration Provision Fails to Provide At Risk Status |
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This week we look at the Tax Court's second pass at the case of Hubert v. Commissioner, TC Memo 2008-46, a case that sent back to the Tax Court by the Sixth Circuit Court of Appeals to decide if the LLC debt restoration provision made the taxpayer the... |
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| 51. |
Safe Harbor for Section 1031 Exchanges |
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The IRS has issued a safe harbor treatment for Â1031 exchanges involving property that previously had or subsequently has personal use. Revenue Procedure 2008-16 outlines the tests taxpayers can meet to be given safe harbor status on the question... |
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| 52. |
Not Quite Good Enough-Timely Filing One More Time |
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We revisit the issue of what exactly is timely filing, revisiting an issue last covered in a podcast back in October of 2005. This time we look at the Tenth Circuit's opinion in the case of Gibson v. Commissioner, a case that illustrates how a... |
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| 53. |
Transforming Rental Income to Self-Employment Income - Qualified Joint Ventures |
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This podcast was originally recorded to go up last week, but the new tax bill displaced it so a week late we'll look at something that might have escaped your notice in the tax bill passed last May. This podcast discusses an issue highlighted in,... |
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| 54. |
Economic Stimulus Package of 2008 (Tax Matters) |
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Congress passed the Economic Stimulus Package of 2008 this week that makes a few, but significant, tax law changes for 2008. This podcast talks about what Congress did and what we need to do about it.Materials are available at http://www.edzollars.com/2008-02-09_Economic_Stimulus.pdf... |
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| 55. |
So You Want Your LLC to Be An S Corporation |
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A listener who was following along in some discussions on the Arizona Society of CPAs sent me an email suggesting that perhaps it might be useful to look at the issues involved with LLCs and S corporations. This week we will look at this issue,... |
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| 56. |
A Capital Idea-But Not In the Eyes of the Court |
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The issue of what is a capital asset is looked at in the Ninth Circuit's decision in Trantina v. United States, 2008 TNT 7-8. In this case, an insurance agent was arguing that payments received from State Farm should have been taxed to him at capital... |
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| 57. |
Consenting to Disclosure or Use of Return Information |
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This week we look at Revenue Procedure 2008-12 and final regulations under Â7216, both of which deal with taxpayer authorizations for the use or disclosure of tax return information by tax preparers. The new regulations contain a number of new... |
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| 58. |
Knight Time for Investment Fees in Trusts |
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The Supreme Court today decided the issue of whether investment fees paid by a trust was subject to the 2% of adjusted gross income limitation. The Supreme Court in Knight v. Commissioner held that expenses are to be tested to determine if they... |
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| 59. |
Economic Substance, Promissory Notes and Partnerships |
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We look at a case where the IRS failed in an attempt to argue that a transaction had no economic substance or otherwise failed under the anti-abuse partnership regulations. The case is Countryside Limited Partnership v. Commissioner, TC Memo 2008-3... |
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| 60. |
Debt Relief, Recourse Mortgages and Tax Research |
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We look at a case that illustrates the application of Section 108 in a situation with recourse debt. While this case would likely have been covered by the relief in the Mortgage Foregiveness Debt Relief Act of 2007 if the property had been taken... |
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| 61. |
IRSâs New View on §§6694 and 6695 |
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The IRS celebrated the end of 2007 by releasing three Notices late on December 31 that provide guidance on the application of the revised preparer penalties contained in the Small Business and Work Opportunity Tax Act of 2007 that was passed last May. ... |
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| 62. |
Class Warfare in the Family (with an S Corporation) |
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In this podcast, we look at a case where a shareholder attempted to argue that, in fact, the S corporation's election had been terminated a decade before due to an agreement with the founding shareholder that, in the taxpayer's view, created a second... |
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| 63. |
End of Year Trifecta of New Tax Bills |
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In this podcast we look at highlights of three of the five bills affecting taxation that Congress passed prior to leaving town, specifically the Tax Increase Prevention Act of 2007, Mortgage Forgiveness Debt Relief Act of 2007 and Tax Technical Corrections... |
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| 64. |
Home is Where the Partnership Isn't |
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In a recent Tax Court decision on the home sale exclusion under Section 121, the IRS and the taxpayers split the decision--the IRS lost in its attempt to claim the taxpayer did not use the property in question as his principal residence, but the taxpayer... |
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| 65. |
S Corporation Owner Health Insurance Deduction |
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The IRS has issued Notice 2008-1 that details how an S corporation shareholder can qualify for the self-employed health insurance deduction under Â162(l) even if the policy is in the name of the shareholder. The notice is at odds with the implication... |
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| 66. |
Washing Out a Loss-IRS Rules on IRA's Relationship to Section 1091 |
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After a not so short hiatus, the Tax Update podcast is again posted, this time looking at IRS Revenue Ruling 2008-5 that deals with issue of a taxpayer selling securities at a loss in a taxable account and then purchasing identical securities in a regular... |
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| 67. |
Rolling Changes: IRS Releases Two Revisions to Circular 230 10.34 |
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Two days, two revisions: the IRS on September 25 issued proposed regulations to revise Circular 230 Â10.34, and the next day finalized regulations that also made changes to the same provision (among others). We take a look at both sets of... |
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| 68. |
Total Devastation-Damage to a Residence and Eligiblity for Section 121 |
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The IRS released a Chief Counsel Advice (CCA 200734021) that dealt with how to interpret the language found in Section 121(d)(5) that, in certain cases, will allow a taxpayer to treat a residence that is destroyed as if it were sold for purposes of ignoring... |
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| 69. |
North, to Alaska-Thompson, Valuation and Reasonable Cause |
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The Second Circuit Court of Appeals decided that the Tax Court had been too quick to dismiss a penalty under Â6662 in the Estate of Thompson, decided last week, but that the Court was not forced to accept the taxpayer's valuation when it rejected the... |
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| 70. |
It Has to Be Something! Tax Court Penalizes Taxpayer for Sloppy Records |
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We once again revisit the Cohan rule, but this time in the context of a much larger taxpayer than we normally look at, in the case of Tyson Foods, Inc and Subsidiaries vs. Commissioner, TC Memo 2007-188. The taxpayer's was attempting to argue,... |
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| 71. |
Home Equity of a Different Sort-Claiming Deductions for a Home the Taxpayer Doesn't Own |
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Equitable ownership of a home can grant a taxpayer a deduction for mortgage interest and taxes even when the taxpayer is not the legal owner. While the taxpayer in the case of Nair v. Commissioner, TC Summary Opinion 2007-116, did not have such... |
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| 72. |
Substantial Understatementsâthe Penalty under §6662(b)(2) |
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We finish up the look at Â6662, this time looking at the substantial understatement penalty, as well as the exceptions to this penalty.
The material for this week's podcast can be downloaded from
http://www.edzollars.com/2007-07-09_Substantial_Understatements.pdf.
The... |
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| 73. |
The Value of Standards-SSVS No. 1 Released and the Impact on CPAs in Tax Practice |
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For Independence Day we take a look at a new set of standards released by the American Institute of CPAs' Consulting Services Executive Committee that will take effect for engagements entered into after January 1, 2008. The Statement on Standards... |
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| 74. |
Section 6662(b)(1) Penalties on Client-A Review |
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Given that in both the changes to Circular 230 paragraph 10.35 back in 2005 and the recent revisions to Section 6694, it seems appropriate to review the penalties that can be imposed on a taxpayer under this section, a section whose outlines of level... |
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| 75. |
Testing the Limits-The IRS Loses Statute of Limitations Case |
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This week we look at recent cases where the IRS lost a statute of limations case. In the case of Bakersfield Energy Partners, LP, 128 TC No. 17, the question was whether an overstatement of basis used in computing a Section 1231 gain could result... |
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| 76. |
Delay of Game-IRS Grants Temporary Relief For Section 6694(a) Changes |
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The IRS this past week issued Notice 2007-54 which grants partial relief from some of the changes made to the preparer penalties under Section 6694(a), delaying full implementation of the provisions until next year. We discuss the extent of the... |
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| 77. |
Into the Penalty Box-Updated Prepared Penalty Provision in New Law |
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We further analyze the new law, this time looking in detail at the preparer penalty provisions and the change in the trigger for where the preparer penalty under Section 6694(a).The materials are available at www.edzollars.com/2007-06-02_Preparer_Penalty.pdf... |
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| 78. |
Kiddie Tax Update: Correction to New Law Podcast |
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Kaye Thomas emailed me with an observation regarding one issue in the new law. It turns out that though prior drafts of the bill and the Joint Committee's report on the bill indicated expanding the general rule on the Kiddie Tax one more year,... |
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| 79. |
On Second Try-Tax Law Changes Come Back After Veto |
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The new Congress has passed its first major tax bill with changes that are meant to grant relief to small businesses, but which also have revenue raisers that will impact a number of clients. The President has indicated he will sign the bill, so... |
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| 80. |
Payment Encore: Liability of Taxpayer for Embezzlement by Payroll Service |
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We look at the recent case of Pediatric Affililates, P.A., (2007-1 USTC Â50,477) where the Third Circuit Court of Appeals upheld the U.S. District Court of New Jersey's determination that the taxpayers were liable for unpaid payroll taxes that their... |
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| 81. |
It Depends-IRS Proposes New Divorced Parents Regulations |
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This week we look at Proposed Regulations under Section 152 to clarify the treatment of divorced parents, regulations that would both serve to document what has developed under the current temporary regulations and case law and add some new quirks-including... |
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| 82. |
Home is Not Where the Heart Is-Section 162(a)(2) |
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A taxpayer without a regular place of business can still obtain a deduction for travel away from home if the taxpayer can establish that he/she has a home. In two cases (Jason Ayala v. Commissioner and Manuel Ayala, Jr. v. Commissioner) the taxpayers... |
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| 83. |
Cost of Bad Practice: IRS Notice Implementing Monetary Penalties Under Circular 230 |
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The IRS on April 23 released guidance on the application of monetary penalties to practitioners, their employers, firms and related entities for violations of Circular 230 as authorized by the American Jobs Creation Act of 2004. This guidance gives... |
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| 84. |
An Extension We Don't Want-Tax Preparer's Fraud Taints Return for Statute of Limitation |
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When Section 6501(c) refers to a false and fraudulent return, does the IRS need to show that the taxpayer was involved in the fraud to get the benefit of the unlimited statute of limitations to assess tax? Or is it enough to show only that the... |
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| 85. |
Credit Denied-IRS Attacks Partnership State Tax Credit Shelter |
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The IRS has again issued guidance indicating their displeasure with a marketed shelter that promises benefits via the literal application of partnership provisions in the IRC. In CCA 200704028 the IRS outlines both the shelter that was marketed... |
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| 86. |
There's English and There's the IRC-Passive, Active Conduct and Carrying On |
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Congress doesn't necessarily make the law work as consistently as practitioners want it to work. This week we look at four different provisions in the Internal Revenue Code and their somewhat different view on whether "enough" is being... |
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| 87. |
A Family Affair-Spouses and Medical Reimbursement Plans |
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Back in February of 2006, I did a podcast on medical
reimbursement plans and went over the Speltz
case where the taxpayer prevailed in a medical reimbursement plan provided for
her husband who worked for the taxpayerâs daycare business as an employee. ... |
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| 88. |
The New and Improved Health Savings Account |
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Congress passed a number of incentives in the Tax Relief and Health Care Act of 2006 meant to make Health Savings Accounts (or HSAs) more attractive to taxpayers. We'll take a look at the provisions this week and consider their impact on our clients.The... |
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| 89. |
But I Left it at the Hotel-The Late Filing Issue |
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We look at the case of a traveler who got bitten when she attempted to make use of the hotel to get a package picked up by a private delivery service-a package that happened to contain her petition to the Tax Court which she was filing on the last day... |
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| 90. |
Literally Too Good To Be True-IRS Memorandum on Partnership Transaction |
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This week we look at an IRS memorandum that argues against the position taken by a taxpayer arguing that his transaction literally complies with Section 731 and 732. The IRS argued that the transaction, which involved the partnership acquiring... |
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| 91. |
Put on Notice-IRS Explains the Distribution Provisions in the Pension Protection Act of 2006 |
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The IRS has issued Notice 2007-7 that explains the distribution provisions in the Pension Protection Act of 2006. In the podcast, we look at some of he provisions contained in this notice that would be of special interest to advisers of closely... |
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| 92. |
When Did That Happen? Options and Exercise Date? |
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Sometimes life just doesn't seem fair. Like when you exercise stock options from your former employer, and the stock price drops 20% from the date you told your employer to exercise the options until just a few days later. And, even worse,... |
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| 93. |
Maybe Not Better Late Than Never-Mark to Market Election under Section 475(f) |
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The mark to market election under Section 475(f) can have a major impact for individuals that were unsuccessful in their attempt to become a day trader-which turns out to be the majority of those who try. However, the election has rather strict... |
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| 94. |
Timing is Everything-IRS Issues Year End Expense Guidance |
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This week the IRS decided to send a warning to accrual basis taxpayers that the IRS has some very specific ideas on the proper application of the recurring item exception. We look at Revenue Ruling 2007-3 and the issues it raises for deductions... |
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| 95. |
Giving Credit Where Credit is Overdue-Holiday AMT Gift |
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Congress got around to passing the extenders in the Tax Relief and Health Care Act of 2006 early on Saturday morning, which picked up a number of the items that expired at the end of 2005 and had not yet been extended. One provision added in the... |
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| 96. |
The Dictionary vs. the Regulations-Active Participation in Retirement Plans |
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The issue of whether an individual is or isn't considered an active participant in a retirement plan can be complex, as the taxpayer found out in the case of Colombell v. Commissioner, TC Summary 2006-184. As the taxpayer discovered, the mere fact... |
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| 97. |
Close Doesn't Count-Accountable Plan Rulings |
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Given that the IRS and courts had a short week, we look back this week at a ruling from a few weeks back, as well as a related ruling from a year ago, that deal with the accountable plan rules, and how the IRS interprets the options for implementing... |
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| 98. |
A Ringing in Your Ears-Telephone Tax Refunds and Businesses |
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The IRS has released a simplified method that businesses can elect to use to compute the amount of their refund for the federal long distance excise tax that the IRS finally agreed the law did not allow them to collect. The simplified method is... |
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| 99. |
To 83(b) or not to 83(b)-That is the Question |
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83(b) elections were all the rage, especially for those with stock options during the dot com bubble--and now many of those individuals regret the election. This week the Tax Court considered the case of Anthony Kadillak (Kadillak v. Commissioner,... |
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| 100. |
Sorry, But No Dice-Reliance Upon a Tax Professional Co-Administrator |
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The podcast this week deals with the case of Estate of Landers, TC Memo 2006-230, where an estate's co-administrator attempted to seek a finding that there was reasonable cause for late filing based upon his reliance upon his (now deceased) co-administrator,... |
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| 101. |
Plain Speaking: General Powers of Appointment, the GST and Grandfathered TRA86 Trusts |
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The Tax Court this week reasserted its previously stated position on the treatment of the GST grandfathering provision for trusts in existence on September 25, 1985 when a party holds a general power of appointment under that trust. The Tax Court... |
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| 102. |
Take That, Private Annuities! New IRS Proposed Regulations |
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The IRS has proposed regulations that will radically change the taxation of private annuities, making Revenue Ruling 69-74 obsolete as of October 18. We discuss the new treatment the IRS is proposing, and how it would impact such transactions.This... |
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| 103. |
Letâs Try This Again-Another AMT Capital Loss Theory Loses |
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In a relatively slow tax news week, the Tax Court issued yet another published opinion dealing with the coordination of the capital loss rules of Â1211 and the alternative minimum tax. In the case of Palahnuk v. Commissioner, 127 T.C. No. 9 the... |
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| 104. |
A Little Bit of This and That-Signing Returns, Alimony and 409A Reprieve |
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This podcast covers a number of recent tax developments, including dealing with the burning issue of whether a preparer must sign the client's copy of the return, a recent case involving again the question of what is alimony and the IRS's recent reprieve... |
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| 105. |
A Defining Issue-Who Is an Employee? |
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The issue of whether a service provider is properly treated as a contractor or employee is an important issue for many small businesses. In the case of Orion Contracting Trust v. Commissioner, TC Memo 2006-211, the Tax Court looked at this issue. ... |
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| 106. |
Not Quite Horseshoes-Close Doesn't Count for Charitable Appraisals |
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The documentation rules for charitable contributions can create situations where taxpayers lose the right to claim a deduction even though they made it and, by the time they get to Tax Court, can even show the value of what was contributed. This... |
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| 107. |
Limitations-the Statute of Limitations on Refund Claims |
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We look at a case involving the statute of limitations and the issue of reliance on IRS advice. In the case of A. L. Katz & J. L. Miller v. United States the United States Court of Claims explains that a taxpayer cannot use the fact that an... |
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| 108. |
Securing A Client's Data |
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Securing data has become a key issue for professionals, given recent high profile thefts of computers and drives containing sensitive client information. This week we look at some of the basics of encrypting data that professionals need to understand... |
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| 109. |
And You Get Your Own Car--Cars Provided to Employees |
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This week we deal with the issues involved with having cars that are used by employees, and the various rules that employers need to deal with in that situation. While arguably not as âexcitingâ? to tax practitioners as issues dealing with estate... |
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| 110. |
But My Kids Are Worth What I Pay Them! How Not to Handle Children on the Payroll |
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Paying your children to work in your business can make sense both for the business and from a family tax planning standpoint, but you have to take care to justify that the children are truly being paid for actual business work. This was the little... |
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| 111. |
Why Margined Stock is Not Equivalent to a Nonqualified Option... |
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We look at a case this week that deals with the continuing problems of employee related options that were exercised when the stock was at a high price, but whose price collapsed before the tax was due. The case involved was the case of Racine v.... |
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| 112. |
Congress Plants a Landmine-Company Owned Life Insurance |
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This week we look at a provision buried in the Pension Protection Act of 2006 that involves "employer" owned life insurnace. The provision in question renders the death benefit taxable to the extent it is greater than the premiums paid... |
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| 113. |
It's a Matter of (Misplaced) Trust-Taxpayer Reliance on Advice |
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Taxpayers get their advice from a lot of sources, and we often end up having to defend our own advice against other sources. This week we have two cases that show that all advice is not created equal. In the case of Lehrer v. Commissioner... |
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| 114. |
Gee, Whose IRA Was It? The Issues of Surviving Spouses and IRAs |
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Is a distribution made to a surviving spouse that was rolled to her IRA but can be traced to her deceased spouse's IRA account eligible for the death benefit exception to Section 72(t)? Considering a nearly $100,000 penalty was on the table, the... |
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| 115. |
The Tax GAAP-FASB Speaks on Tax Provisions for Financial Reporting |
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And now for something completely different-coverage of FASB. Well, actually there is a tax angle to this one, as FASB has issued FASB Interpretation 48 in final form in June that will deal with uncertain tax positions. The new interpretation... |
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| 116. |
Reasonable Cause for Late FilingâI Didn't Late File |
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The logic of the application of the IRC to specific situations at times seems to defy common logic, and this week we look at a specific case of such. In this case, the Tax Court decided that a reasonable cause for late filing that allowed a taxpayer... |
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| 117. |
That's Not Income, That's a DiscountâThe Ninth Circuit Corrects the Tax Court |
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The issue of the taxation of prepaid purchase discounts that may need to be refunded if purchase goals are not met has resurfaced as the Ninth Circuit Court of Appeals reversed the Tax Court in the case of Westpac Pacific Foods v. Commissioner. ... |
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| 118. |
What Did They Mean? Section 199 and Construction |
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For our one year anniversary show, we take a look at the newly released regulations under Section 199 as they define construction found at Regulation Â1.199-3(m). These definitions are key for anyone who works with clients in construction related... |
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| 119. |
Is it Really My Loan? S Corporation Debt Once Again. |
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A few weeks ago (back in April) we looked at the case of Ruckreigel where a taxpayer lost an IRS challenge on whether a debt was truly from the shareholders to the corporation due to a failure to follow the necessary formalities. This week, the... |
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| 120. |
Reading, Writing and FICA-Taxation of FICA Payments on Tenure Buyout |
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Another Circuit chimes in on the issue of the FICA taxation of payments made in exchange for tenure rights as part of an early retirement package offered to teachers. In a combined appeal of two contradictory opinions of lower courts under their... |
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| 121. |
Extra, Extra - IRS Headliner on S Corporation Shareholders and 162(l) |
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The IRS on May 15 issued a "Headliner" on their website directed at tax professionals that attempted to explain the treatment of policies purchased by a single employee shareholder of an S corporation in the shareholder's own name.In this podcast... |
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| 122. |
Special Podcast-About Those Extensions We Just Denied... |
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A special podcast this week of interest to practitioners (and their clients) who bulk filed paper extensions with the Fresno Service Center. The IRS recently admitted to a mistake in processing extensions received in Fresno.Materials for the podcast,... |
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| 123. |
At Death Do the Payments Stop? Alimony and the Not Quite Clear Divorce Settlement. |
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Divorce settlements at times are frustrating for tax preparers to work with, since they often leave dangling the issue of whether payments were or were not intended to be alimony and, not surprisingly, the former spouses may have very different views... |
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| 124. |
Indecent Exposure-Internet Access Security Issues Away From the Office |
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For Memorial Day, the podcast will take a break from tax related topics and consider rather some issues that arise when you, like many this weekend, are traveling and take your laptop with you to "stay connected" with your office and clients. ... |
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| 125. |
Tax Increase Prevention Act of 2005-The Highlights and Lowlights |
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We finally have a 2005 extender bill, albiet missing a few extenders and with a few surprises (some good, some not so great). The President signed the bill into law this week, so it's time to look at the details that were in the bill.The materials... |
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| 126. |
It's "t" time: Exceptions to the 10% Addition to Tax on Premature Distributions from IRAs and Plans |
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Taxpayers who take distributions from retirement plans prior to attaining age 59 1/2 have to deal with a confusing set of rules of which distributions are and are not eligible to escape the 10% addition to tax under Â72(t). Two recent cases illustrate... |
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| 127. |
Testing the Limits: the $3,000 Capital Loss Cap and the AMT |
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The Tax Court looked at the interaction of the $3,000 capital loss limitation and the alternative minimum tax basis adjustment on the sale of shares originally obtained via the exercise of incentive stock options in a prior year. The case in question... |
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| 128. |
Whose Debt Is It Anyway? S Corporations and Loans from Related Entities |
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Shareholder debt to S corporations has proven to be a minefield for shareholders and their advisers, and the taxpayer and their adviser in the case of Ruckriegel v. Commissioner managed to step on a shareholder debt/basis mine twice in two consecutive... |
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| 129. |
But I Never Got That Letter: When Mail Doesn't Make It To Taxpayers |
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Much of the information that taxpayers need to deal with their tax obligation arrives via the U.S. mail. But what happens when that mail is delivered to the wrong address and either never makes it to the taxpayer or arrives late? While we've... |
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| 130. |
We Didn't See This Adoption Coming-What is Unforseen? |
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Can adopting a child, an apparently voluntary endeavor, qualify as an unforseen circumstance for purposes of obtaining an early exclusion of gain from the sale of a home under Section 121? A taxpayer asked that question of the IRS and got a favorable... |
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| 131. |
How Much to Tell--Adequate Disclosure and Section 6501(e) |
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The case of Benson v. Commissioner, TC Memorandum 2006-55, provides a look at the issue of what constitutes adequate disclosure under Section 6501(e)(1)(A)(ii) for purposes of avoiding the otherwise mechanical application of an extended six year statute... |
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| 132. |
Unreasonably Not Injured |
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We look at the exclusion for personal injuries under Section 104 this week, as well as the nature of a reasonable cause for purposes of escaping the imposition of a penalty. We use the case of Goode v. Commissioner, TC Memo 2006-48, to illustrate... |
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| 133. |
I'm a Yankee Doodle Dandy-Just Not a Good Recordkeeper... |
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This week we look at the issues and limitations involving the Cohan rule and its use in tax compliance and representation work.
The materials can be downloaded from
http://edzollars.com/2006-03-25_Cohan.pdf.
The podcast is sponsored by Leimberg... |
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| 134. |
In God We Trust, All Others Must Deposit With Us-Payroll Tax Trust Funds |
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This week we look at some issues revolving around payroll tax deposits, including the IRS and Social Security Administration recent caution about the use of payroll services to deposit taxes.
This week we look at a case that invovled the embezzlement... |
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| 135. |
Don't Get Personal (Service Corporation, That Is...) |
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In honor of the upcoming March 15 filing deadline for calendar year corporations, this week we look at the issue of just what is a "qualified personal service corporation" and, perhaps more importantly, what is not. The podcast looks at the recent... |
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| 136. |
The Trouble With Disclaimers-Circular 230 Revisited |
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This week's podcast arose from a discussion that began on the California Society of CPAs TaxTalk group on Yahoo about the widespread use of Circular 230 disclaimers. There seems to be an unfortunately false belief among many in the professions involved... |
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| 137. |
Doctor My Eyes Have Seen the DeductionâMedical Expenses and the Spouse |
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This week we look at issues surrounding what are medical expenses for various tax purposes, as well as a case where the taxpayer successfully defended hiring her spouse as employee, and then covering him under a medical reimbursement plan.
The materials... |
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