Click here to listen to the audio. Alternatively, you may download the file to your computer by right clicking your mouse, choosing "Save Target As", then selecting a location on your computer to save the file.

Lynn Nichols of Nichols Patrick CPE delivers the podcast update this week.  For all of your CPE needs, please see www.ficpa.org/cpe.  The update this week will cover:

• 2012 Inflation-Adjusted Amounts for HSAs
• Corporate Restructuring of S Corporation Is Tax Free
• Division of QSST Produces Two Separate QSSTs
• And more…

NICHOLS PATRICK TAX PODCAST CITATIONS 

1. 2012 Inflation-Adjusted Amounts for HSAs
   (Rev. Proc. 2011-32; 5/13/2011)  IRS has announced the 2012 inflation-adjusted amounts for health savings accounts under section 223, noting changes in the maximum annual contribution limits for HSAs and in the out-of-pocket spending limits for high-deductible health plans.
   
   
2. Corporate Restructuring of S Corporation Is Tax Free
   (LTR 201119017; 2/7/2011, rel. 5/13/2011) IRS rules that a proposed corporate restructuring will be treated as a tax-free reorganization under section 368(a)(1)(F), no second class of stock will be created, and the S corporation status of an S corporation entering into the reorganization would not be terminated but would continue.
   
   
3. Division of QSST Produces Two Separate QSSTs
   (LTR 201119005; 1/28/2011, rel. 5/13/2011) IRS rules that division of a qualified subchapter S trust will result in two separate shares under section 663(c), that each share will be a QSST, and that the trust beneficiaries are not required to file QSST elections.
   
   
4. Top 10 Tax Mistakes Made by Contingent Fee Lawyers
   (Article by Robert W. Wood; 2011 TNT 96-7, Tax Notes, 5/16/2011) Attorney Wood presents what he considers to be the top 10 tax mistakes made by plaintiff lawyers. Clearly there are opportunities for CPAs and EAs to be of service analyzing tax aspects of litigation settlements.
   
   
5. Charges Against Offshore Bank Client Raise Quiet Disclosure Questions
   (United States v. Schiavo, criminal information filed in USDC MA, 5/19/2011)The government charged Michael Schiavo, a former partner at a venture capital firm and current director at a Boston bank, with failure to file a foreign bank account reporting form disclosing his financial interest in an account at HSBC Bank.  Mr. Schiavo filed amended returns reporting some of his offshore income...but too late!
   
   
6. Corporations' Management Fees, Expense Deductions Denied; Penalties Upheld
   (Weekend Warrior Trailers Inc. et al. v. Commissioner; T.C. Memo. 2011-105, 5/19/2011) The Tax Court upheld IRS's disallowance of a corporation's deductions for management fees paid to a related entity that provided no services, denied depreciation and expense deductions for a boat and airplane for lack of documentation, and found that below-market loans to a shareholder resulted in forgone interest and constructive dividends to the shareholder. Section 6662 penalties were also upheld.
   
   
7. Tax Court Denies Summary Judgment Motion; Value of Insurance Policy IS A Matter for Trial on the Facts
   (Frederic J. Lowe v. Comm.; T.C. Memo. 2011-106, 5/19/2011) The Tax Court found that distribution of a cash value life insurance policy requires  its fair market value to be included in gross income of the recipient, but denied the IRS's motion for summary judgment because the value of the insurance remains a genuine issue of fact.