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Lynn Nichols of Nichols Patrick CPE delivers the latest federal tax updates. For all of your CPE needs, visit www.ficpa.org/cpe. ('Doc' numbers are citations to the listed item in Tax Analysts' Tax Notes Today. The author relies on, and recommends, Tax Notes Today and Tax Analysts' Federal Research Library as essential tools for the tax professional.)
The podcast this week covers the following:
- Claim of Right Doctrine Does Not Apply to Unpaid Promissory Notes
(ILM 201328031; rel. 7/12/2013)
In a legal memorandum, the IRS concluded that section 1341 may not be applied to previously included items of income attributable to two promissory notes.
- Right to Receive “Dividends” Not an Incident of Ownership in Life Insurance Policies
(ILM 201328030; rel. 7/12/2013)
In a legal memorandum, the IRS determined that insurance proceeds were not includable in the gross estate of a decedent because at death he held only a right to receive the dividends from the policies, which by itself is not an incident of ownership for purposes of section 2042.
- CFC's Rental Income Is Foreign Personal Holding Company Income
(FAA 20132702F; rel. 7/5/2013)
In field attorney advice, the IRS concluded that rental income from leasing software to third parties outside a controlled foreign corporation's country of incorporation is foreign personal holding company income and that the CFC doesn't qualify for the active marketing exception under reg. section 1.954-2(c)(1)(iv).
- Compensation for Psychological Damages Is Excludable From Income
(LTR 201328022; rel. 7/12/2013)
The IRS ruled that amounts an individual received as compensation for psychological damages attributable to personal physical injuries is excluded from the individual's gross income under section 104(a)(2), except for amounts of reimbursed medical expenses that the individual incurred and deducted in prior tax years.
- IRS Fact Sheet Warns Employers Outsourcing Payroll Duties
(FS-2013-9; rel. 7/15/2013)
The IRS has released a fact sheet outlining steps employers can take to protect themselves when outsourcing their payroll and related tax duties to third-party payers, such as payroll service providers and reporting agents, some of which have been recently prosecuted for stealing funds intended for the payment of payroll taxes.
- FASB Finalizes Guide for Private Company Decision-Making
(Tax Notes Today; 7/17/2013; Article by Thomas Jaworski)
The Financial Accounting Standards Board on July 16 completed a guide that will assist with the development of alternative guidance for private companies reporting under U.S. generally accepted accounting principles.
- Thirty-one Percent of 2011 Schedules UTP Failed Concise Description Requirements
(Tax Notes Today; 7/18/2013; Article by Amy S. Elliott)
According to an IRS official, thirty-one percent of tax year 2011 Schedule UTP filers submitted incomplete concise descriptions of their uncertain tax positions, risking loss of the protection from some penalties that Schedule UTP offers.
LAST UPDATED 7/25/2013