Federal Tax Update - Sept. 30, 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
September 30, 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. BB&T STARS Transaction Lacked Economic Substance; Penalties Apply
    (Salem Financial Inc. v. U.S.; Ct Fed Clms; No. 1:10-cv-00192;9/20/2013)
    The Court of Federal Claims held that a structured trust advantaged repackaged securities foreign tax credit generator transaction engaged in by BB&T Corp. lacked economic substance and that accuracy-related penalties are applicable.
    [Doc 2013-22408]
    DOJ Announces $112 Million in Penalties in Abusive Tax Shelter Case
    (DOJ Press Release; 13-1054; 9/20/2013)
    BB&T Corp. was not entitled to $660 million in tax benefits claimed because of participation in an abusive tax shelter developed by Barclays Bank PLC and KPMG LLP to circumvent foreign tax credit rules, and it will pay $112 million in penalties, the Justice Department announced in a September 20 release.
    [Doc 2013-22412]
  2. Guidance on Application of Windsor to Employment Taxes
    (Notice 2013-61; 2013-42 IRB 1; 9/23/2013)
    The IRS has issued guidance for employers and employees to make claims for refund or adjustments of overpayments of FICA and income tax withholding for some benefits provided and remuneration paid to same-sex spouses resulting from the Supreme Court's decision in United States v. Windsor.
    [Doc 2013-22541] 
  3. Guarantors May Need to Document Net Worth
    (Tax Notes Today; 9/25/2013; Article by Amy Elliott)
    Treasury and the IRS are developing a set of proposed section 752 partnership debt allocation rules that could extend a net worth maintenance requirement to a host of different types of partner guarantors and indemnitors other than disregarded entities, including possibly to individuals.
    [Doc 2013-22644]  
  4. Parent Allowed to Claim Dependency Deductions, Credits, Head of Household Status
    (Jennifer D. White v. Comm.; T.C. Summ. Op. 2013-77; 9/26/2013)
    The Tax Court, in a summary opinion, held that a parent was entitled to claim dependency exemption deductions for her two children who lived with her for more than half the year, finding that she wasn't required to file a Form 8832; she was also entitled to claim head of household filing status and earned income and child tax credits.
    [Doc 2013-22888]
LAST UPDATED 9/30/2013