Federal Tax Update - April 22, 2013

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Lynn Nichols of Nichols Patrick CPE delivers the latest tax updates in this week’s podcast. Lynn will be in Florida in June teaching two courses. For more information about then, click below.

6/24 Ft. Lauderdale Medical Finances: Enhancing Your Value to a Medical Practice
6/25 Orlando Medical Finances: Enhancing Your Value to a Medical Practice

For all of your CPE needs, please go to www.ficpa.org/cpe. The podcast covers the following topics this week.

  1. California CPA Disbarred for Disreputable Conduct
    (IR-2013-41; 4/12/2013)
    The IRS has announced that California CPA Anthony A. Tiongson has been disbarred for disreputable conduct that includes charging unconscionable fees, giving irresponsible advice to clients, and making false statements to federal and state authorities. [Doc 2013-9029]

  2. Only a Portion of Disability Benefits Excludable From Gross Income
    (LTR 201315001; 6/11/2012; rel. 4/12/2013)
    The IRS ruled that disability retirement benefits paid under a state statute are excludable from the recipient's gross income to the extent that the benefits don't exceed two-thirds of the employee's average final compensation, but the portion of the benefit that exceeds that amount is includable in the recipient's gross income under section 72. [Doc 2013-8907]

  3. Offset of Self-Employment Tax Refunds Limited
    (ECC 201315023; 3/7/2013; rel. 4/12/2013)
    In e-mailed advice, the IRS said that when the section 6501 period of limitations on assessment has passed, the IRS can offset under section 6521 the self-employment tax refunds of individuals who had erroneously been treated as self-employed, but only with the employee portion of unpaid employment taxes. [Doc 2013-8929]

  4. Domestic Corporation’s Attempt to Disguise Dividends From CFC Fails
    (Barnes Group Inc. et al. v. Commissioner; T.C. Memo. 2013-109; 4/16/2013)
    The Tax Court, sustaining accuracy-related penalties, held that funds a corporation received through a purported reinvestment plan from a controlled foreign corporation were in substance dividend payments and taxable under section 301 and that the value of property transferred to the corporation was includable in its income. [Doc 2013-9312]

  5. Requiring Joint Filing to Claim Adoption Credit Is Not Unconstitutional
    (Nancy Louise Field v. Commissioner; T.C. Memo. 2013-111; 4/18/2013)
    The Tax Court held that the joint filing requirement to claim an adoption expense tax credit does not violate the equal protection clause and that an individual who filed a separate return from her husband wasn't entitled to claim the credit; the court found that there was a genuine dispute regarding her liability for an accuracy-related penalty. [Doc 2013-9614]

  6. IRS Destroyed More Than 12,000 Reports of Fraud in Fiscal 2012
    (TIGTA Report 2013-40-022)
    The IRS destroyed more than 12,000 taxpayer reports of suspected fraud in fiscal 2012, according to an analysis released April 18 by the Treasury Inspector General for Tax Administration. Taxpayers attempting to report fraud were confused by less than clear instructions, and IRS needs to improve review process. [Doc 2013-9577]
LAST UPDATED 4/22/2013