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Lynn Nichols presents the update for the past week on major tax changes. With only a few more weeks to get your CPE in before June 30, see www.ficpa.org/cpe for your best CPE options. The podcast this week covers the following:
- List of Practitioners Subject to Disciplinary Action
(Announcement 2012-24; 2012-23 IRB 982; 6/4/2012)
The IRS has published a list of attorneys, CPAs, enrolled agents, enrolled actuaries, enrolled retirement plan agents, and appraisers who have received disciplinary sanctions for violating the regulations governing practice before the IRS.
- Completed Contract Method of Accounting for Manufacturers ? ? ?
(ECC 201222036; 1/26/2012; rel. 6/1/2012)
In e-mailed advice, the IRS stated that manufacturers generally are not permitted to use the completed contract method of accounting unless they are exempt from the percentage of completion method under, for example, a reg. section 1.460-3(b)(2) safe harbor or under reg. section 1.460-4(c).
- Gifts of Limited Partnership Interests Qualify for Annual Exclusion
(Estate of George H. Wimmer et al. v. Commissioner; T.C. Memo. 2012-157;6/4/2012)
The Tax Court, in an estate tax deficiency case, held that gifts of limited partnership interests had substantial present economic benefit sufficient for the gifts to be present interest gifts on the date of each gift and therefore qualify for the annual gift tax exclusion under section 2503(b).
- Independent Contractor Allowed to Deduct Estimated Labor Expenses, Not Liable for Penalties
(David W. Bauer v. Commissioner; T.C. Memo. 2012-156; 6/4/2012)
The Tax Court held that an independent contractor who provided moving services was entitled to deduct an estimated amount of contract labor expenses for the tax years at issue and declined to hold him liable for accuracy-related penalties, finding that he made a good faith effort to keep records of his expenses.
- Tax Payment Deadline for Spouses of Military Personnel Working in U.S. Territories Extended Again
(Notice 2012-41; 2012-26 IRB 1; 6/6/2012)
The IRS has further extended, for 2011 and subsequent tax years, the tax payment deadline for civilian spouses of military service members working in a U.S. territory but claiming tax residence in a state or the District of Columbia under the Military Spouses Residency Relief Act.
- S Corporation Shareholder May Use Distributions From One S Corp to Increase Basis in Another Related S Corp
(James Maguire et ux. et al. v. Commissioner; T.C. Memo. 2012-160; 6/6/2012)
The Tax Court held that distributions two couples received from their S corporation could be contributed to a related S corporation to increase their bases and allow them to deduct that S corporation's losses; the court allowed one couple to deduct passive losses from real estate activity but held both couples liable for penalties.
- Temporary Regs on Substantial Business Activities of Foreign Corporations
(T.D. 9592; 6/7/2012)
The IRS has issued temporary regulations on determining whether a foreign corporation has substantial business activities in a foreign country.
- Dismissal of Suit Challenging PTIN Fee Affirmed on Appeal to 11th Circuit
(Jesse E. Brannen PC et al. v. United States; No. 11-14138; 6/7/2012)
The Eleventh Circuit affirmed a district court's dismissal of a purported class action suit filed by an attorney and certified public accountant challenging the imposition of an annual fee for the issuance of a preparer tax identification number that a compensated tax return preparer is required to obtain.
- DOMA Definition of Marriage Unconstitutional, Estate Granted Tax Refund
(Edith Schlain Windsor v. United States; No. 1:10-cv-08435; 6/6/2012)
A U.S. district court granted a same-sex surviving spouse a refund of estate taxes paid on her deceased spouse's estate that would not have been owed if she had been allowed to claim a marital deduction under federal law, holding that the definition of marriage in the Defense of Marriage Act violates the equal protection clause.
LAST UPDATED 6/11/2012