Federal Tax Update - Dec. 23, 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:

With E. Lynn Nichols, CPA
December 23, 2013


  1.  Proposed Regs on Allocation of Partnership Liabilities
    (REG-136984-12; 78 F.R. 76092-76096; 12/16/2013)
    The IRS has published proposed regulations under section 752 relating to recourse liabilities of a partnership and the special rules for related persons.
  2. Required Records Doctrine Overrides Fifth Amendment Privilege Claim
    (United States v. Under Seal; No. 13-4267; 12/13/2013)
    The Fourth Circuit affirmed a decision that held two individuals in contempt for failing to comply with grand jury subpoenas for foreign bank records, finding that their Fifth Amendment privilege against self-incrimination was inapplicable because the records sought met the requirements of the required records doctrine.
  3. Cafeteria Plan Guidance for Same-Sex Couples
    (Notice 2014-1; 2014-2 IRB 1
    The IRS has issued guidance on the application of the rules under section 125 regarding cafeteria plans, including health and dependent care flexible spending arrangements, and on the rules under section 223 regarding health savings accounts, as those two provisions relate to participation by same-sex spouses in employee benefit plans.
  4. Nonprofit Corporation Not Operated for Charitable Purpose
    (Council for Education v. Commissioner; T.C. Memo. 2013-283; 12/16/2013)
    The Tax Court held that a nonprofit corporation organized to advocate for the legal rights of an unrepresented charitable class of federal student loan recipients doesn't qualify as an exempt organization because it doesn't operate in furtherance of a charitable purpose as required by section 501(c)(3).
  5. IRS to Delay Opening of 2014 Filing Season Until January 31
    (IR-2013-100; 12/18/20130
    The IRS has announced plans to open the 2014 tax return filing season 10 days later than originally scheduled to give the IRS adequate time to program and test its tax processing systems.   
    Business Filing Season Starts January 13
    The IRS announced that it will begin accepting 2013 business tax returns on January 13, 2014.
  6. Tenth Circuit Affirms Tax Court's Economic Substance, Penalty Determinations
    (Scott A. Blum et ux. v. Commissioner; CA 10; No. 12-9005)
    The Tenth Circuit, finding no error, affirmed a Tax Court decision that upheld accuracy-related penalties and the IRS's disallowance of losses from an offshore portfolio investment strategy transaction for lack of economic substance.
  7. Tax Court Denies Professor's Unsubstantiated Deductions, Holds Him Liable for Penalties
    (Arthur Mason Dupre v. Commissioner; T.C. Memo. 2013-287; 12/19/2013)
    The Tax Court, sustaining accuracy-related penalties, held that a math and computer science professor wasn't entitled to home office deductions, unreimbursed employee business expense deductions, or business expense deductions related to his flute making activity, finding that he failed to substantiate the deductions.
LAST UPDATED 12/23/2013