Federal Tax Update - Oct. 28, 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
October 28, 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

  1. PTIN Statistics
    (Return Preparer Office Federal Tax Return Preparer Statistics; 10/3/2013)
    The IRS has posted to its website statistics on the number of individuals with preparer tax identification numbers for 2013.
  2. Individual's Prison Sentence for Failure to Remit Payroll Taxes Affirmed
    (United States v. Francis Leroy McLain; DC MN; No. 08-CR-0010; 10/8/2013)
    A U.S. district court, on remand, denied an individual's motion to vacate, set aside, or correct his prison sentence for failing to pay employment taxes related to his temporary staffing agency, finding that the Eighth Circuit previously rejected his arguments on direct appeal and that his remaining arguments lacked merit.
  3. Siblings Are Liable for Capital Gain Taxes on Sale of Inherited Property
    (Brett Van Alen et al. v. Commissioner; T.C. Memo. 2013-235; 10/21/2013)
    The Tax Court, sustaining accuracy-related penalties, held that two siblings were liable for capital gains taxes on the sale of an easement on a ranch they inherited, finding that the duty of consistency applied and their basis in the property was established by the value reported on the estate tax return based on a section 2032A election.
  4. Consideration Paid for Assignment Agreement Is Ordinary Income to Seller
    (Philip D. Long v. Commissioner; T.C. Memo. 2013-233; 10/21/2013)
    The Tax Court, sustaining an accuracy-related penalty and denying a deduction for additional legal fees, held that amounts a real estate developer received under an assignment agreement is ordinary income and that he also must include in income the portion he paid to a corporation under another agreement that didn't create a joint venture.
  5. Record Label Activity Not for Profit, Couple Liable for Deficiency + Penalty
    (Patrick Schlievert et ux. v. Commissioner; T.C. Memo. 2013-239; 10/22/2013)
    The Tax Court held a university professor and his wife liable for a tax deficiency and accuracy-related penalty, finding that they didn't conduct their record label activity for profit and therefore, they weren't entitled to deduct losses related to the activity.
  6. IRS Failed to Corroborate Information On Form 1099 R
    (Jeffrey J. Furnish v. Commissioner; T.C. Summ. Op. 2013-81; 10/23/2013)
    The Tax Court held that there was insufficient evidence to verify that an individual received a constructive dividend from a life insurance company because the IRS did not obtain detailed records of premium payments and loan history to corroborate information on the Form 1099-R received by the individual.
  7. Guidance on Determining Timeliness of CDP or Equivalent Hearing Requests
    (PMTA 2013-011; 6/7/2013)
    In program manager technical assistance, the IRS provided guidance on determining the timeliness of a taxpayer's collection due process or equivalent hearing request, offering its assistance in drafting new Internal Revenue Manual provisions in accordance with the advice.


LAST UPDATED 10/28/2013