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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:
NICHOLS PATRICK WEEKLY TAX UPDATE
With E. Lynn Nichols, CPA
July 29, 2013
(‘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.)
See more at www.taxanalysts.com
- Exemptions From Inclusion in Bankruptcy Estate Disallowed for Bad Faith
(In re: Tania Rojo; US Bnk Ct MN; No. 13-40604; 7/18/2013)
A U.S. bankruptcy court disallowed an individual's amendment to her exemptions from the bankruptcy estate, finding that she acted in bad faith when she failed to list her tax refund as an asset and made misleading statements about the tax refund.
- Minister Not Entitled to Parsonage Allowance Exclusion
(Ricky R. Williams; T.C. Summ. Op. 2013-60; 7/22/2013)
The Tax Court, in a summary opinion, held that a couple may not exclude a portion of their income as a parsonage or rental allowance under section 107(2) and that they are liable for an accuracy-related penalty.
- Individual Who Supported Minor Denied Child Tax Credit and EITC
(Lorenzo Marquise Cooper; T.C. Summ. Op. 2013-59; 7/22/2013)
The Tax Court, in a summary opinion, held that an individual isn't entitled to a child tax credit or the earned income tax credit for supporting a minor who has no biological relation to the individual, finding that the minor wasn't a qualifying child for purposes of the tax credits.
- Couple Denied Deductions for “Business” Expenses, Penalties Assessed
(Gregory K. Craig; T.C. Summ. Op. 2013-58; 7/22/2013)
The Tax Court, in a summary opinion, held that a couple was not entitled to deductions related to expenses incurred in their horse activity, finding that the activity was not conducted for profit; the court found that the couple was liable for accuracy-related penalties because they did not act with reasonable cause or good faith.
- IRS Releases Publication on Return Disclosure
(Publication 3373; Undated; Released 7/23/2013)
The IRS has released Publication 3373 (rev. Jul. 2013), Disclosure of Information to Federal, State and Local Agencies, outlining the procedures for officers and employees of federal, state, and local agencies to obtain return information from the IRS.
[Doc 2013-17628] (35 page PDF)
- Deferral of Advance Payments Under Gift Card Arrangements Clarified
(Rev. Proc. 2013-29; 7/24/2013)
The IRS has clarified the rules for use of the deferral method of accounting for advance payments received by a taxpayer for the sale of gift cards that are redeemable by an unrelated entity.
- Bad Debt Deduction Denied for Transfers to Family-Owned Business; Penalties Upheld
(June Shaw v. Commissioner; T.C. Memo. 2013-170; 7/24/2013)
The Tax Court, sustaining a late-filing addition to tax and accuracy-related penalty, held that an individual wasn't entitled to a bad debt deduction for funds she transferred to a family-owned company because she failed to show that there was a bona fide loan and she didn't establish that the purported loan was worthless in the year at issue.
LAST UPDATED 7/29/2013