Federal Tax Update - Nov. 22, 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. IRS, HHS, and Labor Publish Final Regs on Equity for Mental Health Treatment
    (T.D. 9640; 78 F.R. 68239-68296; 11/13/2013)
    The IRS, in conjunction with the departments of Labor and Health and Human Services, has published final regulations implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, which requires equity in the provision of mental health benefits under group health plans.
  2. Taxpayer Advocate Slams IRS Customer Service
    (Tax Notes Today; 11/13/2013; Article by Kristen Parillo)
    National Taxpayer Advocate Nina Olson in a November 9 speech decried as pitiful the level of IRS customer service given to taxpayers, which she attributed to inadequate funding that has forced the Service to automate many of the most important tax administration functions and skimp on training employees on taxpayer rights.
  3. Fifth Circuit Affirms Disallowance of Bad Debt Deduction
    (Juan M. Herrera et ux. v. Commissioner; CA 5; No. 13-60018; 11/11/2013)
    The Fifth Circuit, in an unpublished per curiam opinion, affirmed a Tax Court decision that held that a couple wasn't entitled to a bad debt deduction for payments made by the husband's company to satisfy a debt owed by another company he owned, finding that the couple failed to show that there was a legal obligation to satisfy the debt.
  4. Couple Not Allowed to Present Assessment Limitations Period Defense
    (Bradley C. Reifler et ux. v. Commissioner; T.C. Memo. 2013-258; 11/13/2013)
    The Tax Court held that the assessment period for a couple's 2000 tax year remains open, finding that the couple is equitably estopped from raising the limitations period as a defense because they didn't send the IRS their original return, which was returned to them for lack of the wife's signature, and instead filed a new return on a later date.
  5. Final Regs Providing Hardship Relief to Retirement Plan Sponsors
    (T.D. 9641; 78 F.R. 68735-68739; 11/15/2013)
    The IRS has published final regulations on some cash or deferred arrangements under section 401(k) and matching contributions and employee contributions under section 401(m).
  6. Second Circuit Vacates Tax Court Decision That Held Foundation Wasn't Liable as a Transferee
    (Diebold Foundation Inc. v. Commissioner; CA 2; No. 12-3225; 11/14/2013)
    The Second Circuit held that the two prongs of section 6901 are independent and found that a foundation was liable as a transferee under state law, but remanded the case to the Tax Court for a determination on the foundation's liability under federal law as a transferee and for a determination regarding the applicable statute of limitations.
  7. Couple Denied Deductions for Business Expenses
    (John Charles Geyer et ux. v. Commissioner; T.C. Summ. Op. 2013-90; 11/14/2013
    The Tax Court, in a summary opinion, held that a couple's travel guide and video sales activities were not conducted primarily for profit within the meaning of section 183 and that they, therefore, were not entitled to deductions claimed for related expenses.
LAST UPDATED 11/22/2013