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Lynn Nichols from Nichols Patrick CPE delivers the latest update on federal tax issues in this week’s podcast. The FICPA 2012 CPE Catalog is now open. You can find all of the CPE courses you need at www.ficpa.org/catalog. The podcast covers the following.

• Organization Administering Wholesale Electricity Markets Is Exempt
• Limits on Home Acquisition, Equity Indebtedness Apply on Per-Residence Basis
• Attorney Not Entitled to Deduct International Consulting Business Expenses
• Automatic Method Change Guidance for Repair Regs Transition
• Accounting Method Changes for Costs to Repair, Maintain Tangible Property
• Accounting Method Changes for Depreciation, Disposition of Assets
• Some Individuals Providing Services to Auto Body Shop Were Employees, Others Were Not
• Audit Technique Guide on IC-DISCs

CITATIONS

1. Organization Administering Wholesale Electricity Markets Is Exempt - (LTR 201209010; 12/6/2011; rel. 3/2/2012)
   The IRS ruled that a section 501(c)(3) organization that administers markets for wholesale purchase and sale of electric energy in its state may become the central counterparty to all transactions that take place in markets it administers without adversely affecting its status as an exempt organization.
   
   
2. Limits on Home Acquisition, Equity Indebtedness Apply on Per-Residence Basis - (Charles J. Sophy et al. v. Commissioner; 138 T.C. No. 8; 3/5/2012)
   The Tax Court held that the section 163(h)(3) limitations on the amounts that may be treated as home acquisition and home equity indebtedness for two unmarried individuals who jointly own a residence are properly applied on a per-residence basis rather than on a per-person basis.
   
   
3. Attorney Not Entitled to Deduct International Consulting Business Expenses - (Kurt A. Strode v. Commissioner; T.C. Memo. 2012-59; 3/4/2012)
   The Tax Court held that an attorney was not entitled to deduct international consulting business expenses that exceeded his gross income from the activity, finding that the activity was not engaged in for profit within the meaning of section 183 and finding him liable for an accuracy-related penalty.
   
   
4. Automatic Method Change Guidance for Repair Regs Transition - (Tax Notes Today; Article by Amy Elliott; 3/8/2012
   On March 7, IRS released transition guidance outlining procedures by which taxpayers may obtain automatic accounting method changes to comply with the temporary regulations on capitalization of tangible assets.
   
   Accounting Method Changes for Costs to Repair, Maintain Tangible Property - (Rev. Proc. 2012-19; 3/7/2012)
   Procedures for obtaining automatic consent to change to accounting methods provided in temporary tangible property regulations regarding materials and supplies costs, repair and maintenance costs, capital expenditures, and costs to acquire, produce, or improve tangible property.
   
   Accounting Method Changes for Depreciation, Disposition of Assets - (Rev. Proc. 2012-20; 3/7/2012)
   Procedures for obtaining automatic consent to change to accounting methods provided in temporary tangible property regulations regarding the depreciation or disposition of applicable assets.
   
   
5. Some Individuals Providing Services to Auto Body Shop Were Employees, Others Were Not - (John Keller et al. v. Commissioner; T.C. Memo. 2012-62; 3/8/2012)
   The Tax Court held that three of ten individuals listed in a notice of determination of worker classification were employees of an auto body shop and that the others were independent contractors, finding that the co-owner was liable for unpaid employment taxes and additions to tax for failure to file and make deposits for the three employees.
   
   
6. Audit Technique Guide on IC-DISCs - (IC-DISC Audit Guide; LB&I-04-0212-003; 3/7/2012)
   The IRS has released an audit technique guide that provides an overview of interest charge domestic international sales corporations and examination techniques to help international examiners in the audit of Form 1120-IC-DISC.