Federal Tax Update - Dec. 9, 2013

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Lynn Nichols from Nichols Patrick CPE delivers the weekly podcast on federal tax issues.  For all of your CPE needs, please go to www.ficpa.org/cpe.  This week’s podcast covers the following topics:


  1. Temporary Regs Allow IRS to Designate Payments Eligible for Voluntary Withholding
    (T.D. 9646; 2013-50 IRB 630; 78 F.R. 71476; 11/29/2013)
    The IRS has published temporary regulations authorizing it to designate payments that would be eligible for income tax withholding under voluntary withholding agreements.
  2. Final Regs Raise User Fees for Installment Agreements, Offers in Compromise
    (T.D. 9647; 78 F.R. 72016-72018; 12/2/2013)
    The IRS has published final regulations amending the rules on user fees for installment agreements and offers in compromise.
  3. Bonus Payment Under Oil and Gas Lease Is Ordinary Income
    (Michael H. Dudek et ux. v. Commissioner; T.C. Memo. 2013-272; 12/2/2013)
    The Tax Court, finding a couple liable for an accuracy-related penalty, held that a bonus payment they received under an oil and gas lease agreement is taxable as ordinary income, not capital gain, and that they aren't entitled to a deduction for cost depletion.
  4. Inherited IRA Not Exempt From Bankruptcy Estate
    (In re: Brandon C. Clark et ux.; Nos. 12-1241 and 12-1255; 4/23/2013)
    The Seventh Circuit, reversing a district court, held that an inherited IRA was not exempt from a debtor couple's bankruptcy estate, finding that the IRA no longer retained its status as retirement funds.

    Supreme Court Asked to Resolve Whether Inherited IRAs Are Exempt From Bankruptcy Estate
    (Brandon C. Clark et ux. v. William J. Rameker et al.; No. 13-299; 9/6/2013)
    A couple petitioned the Supreme Court to review a Seventh Circuit decision that held an inherited IRA wasn't exempt from their bankruptcy estate, urging the Court to resolve a split among the circuits on this issue.
  5. Valuation Misstatement Penalty Applies in Tax Shelter Case
    (United States v. Woods, Sup. Ct. Dkt. No. 12-562; 12/3/2013)
    The 40 percent gross valuation misstatement penalty applies to a partner's overstated outside basis when a partnership is disallowed as a sham, the Supreme Court unanimously held on December 3
  6. Ninth Circuit Affirms Tax Crime Convictions
    (United States v. Robert David Kahre et al.; Nos. 09-10471; 12/5/2013)
    The Ninth Circuit affirmed the convictions of three individuals and one individual's sentence for various tax crimes stemming from their use of gold and silver coins to pay wages in a purported effort to avoid paying payroll and income taxes, finding that there was no error or abuse of discretion by the district court.
LAST UPDATED 12/9/2013