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Lynn Nichols of Nichols Patrick CPE delivers the update on the latest changes in the federal tax area.  Now that tax season is upon us, FICPA members can receive up to a 40% discount on CCH tax materials.  For more information click here.

CITATIONS

1. AMT Patch, Tax Extenders Top List of Expired Tax Provisions
   (Tax Notes Today article by Michael Beller; 1/3/2012)
   Although Congress in 2011 spent much of its time debating tax policy and its budget implications and worked until December 23 to pass a short-term extension of the payroll tax cut, many other tax cuts were allowed to expire as the calendar turned from 2011 to 2012.
   
   Offshore Disclosure, FATCA Reflect IRS Enforcement Efforts
   (TNT Article by Marie Sapirie; 1/3/2012)
   
   IRS Continues Preparer Oversight as OPR Refines Focus
   (TNT article by Shamik Trivedi; 1/3/2012)
   
   
2. Private Unemployment Insurance Premiums Deductible as Business Expense
   (LTR 201152005; 9/19/2011, rel. 12/30/2011)
   The IRS ruled that premiums paid by an employee for private supplemental insurance that covers lost wages due to unemployment resulting from occupational or business hazards are business expenses deductible under section 162(a) but that any benefit payments received under the policy are includable in the employee's gross income.


3. IRS Denies Exemption to Farmer's Market
   (LTR 201152020; 10/11/2011, rel. 12/30/2011)
   The IRS denied tax-exempt status to an organization that operates a farmer's market because the organization helps facilitate the sale of produce for the benefit of the sellers.
   
   
4. Cooperative Payments Considered Allocations Paid in Money
   (LTR 201152006; 9/21/2011, rel. 12/30/2011)
   The IRS ruled that payments a farmers' cooperative made to its members were "per-unit retain allocations paid in money" under section 1382(b)(3) and that the cooperative's section 199 domestic production activities deduction should be computed without regard to any deduction for the payments.
   
   
5. No Charitable Contribution Deductions for Conservation Easements
   (Kayln M. Carpenter et al. v. Comm.; T.C. Memo. 2012-1; 1/3/2012)
   The Tax Court, in consolidated cases, held that a couple and two individuals are not entitled to charitable contribution deductions for conservation easements they granted to a tax-exempt organization because the easements were extinguishable upon mutual consent and did not meet the perpetuity requirements of reg. section 1.170A-14(g).
   
   
6. Severance Pay Includable in Income
   (Thomas G. Henk Jr. v. Comm.; T.C. Summ. Op. 2012-2; 1/4/2012)
   The Tax Court, in a summary opinion upholding an IRS deficiency determination, held that the severance pay an individual received from his former employer was income to him and should have been reported on his income tax return.
   
   
7. Parent Company Liable for Failure to Honor Levy, Court Imposes Penalty
   (U. S. v. Vistoso Partners LLC; USDC AZ; No. 2:10-cv-00444; 1/3/2012)
   A U.S. district court held a company liable under section 6332(d)(1) for failing to honor an IRS levy to collect unpaid taxes owed by its subsidiary and for a 50 percent penalty under section 6332(d)(2) because it failed to establish reasonable cause for its failure to honor the levy.
   
   
8. Settlement Proceeds Includable in Income; Penalty Issue to Proceed to Trial
   (Gary Andrew Dean et al. v. Commissioner; USTC No. 5259-11; 1/4/2012)
   The Tax Court, in an unpublished order, granted the IRS summary judgment and held that a sexual harassment lawsuit settlement was includable in an individual's income, but deferred determination of liability for an accuracy-related penalty until trial.
   
   
9. IRS Lays Out Plan to Revise Rules for Spouses Requesting Equitable Relief From Tax Liability
   (Notice 2012-8; 2012-4 IRB 1; 1/5/2012)
   The IRS has released a proposed revenue procedure that would revise the threshold requirements for requesting equitable innocent spouse relief and would revise the factors the IRS uses to evaluate the requests.