Nichol’s Tax Update, Issue 21-44

  1. IRS Cracking Down on Crypto Noncompliance
    • The IRS is going full steam ahead on addressing noncompliance related to cryptocurrency, and tax professionals may need to get up to date on the reporting regime. [Tax Notes Today, 10/22/2021, article by Benjamin Guggenheim]
  1. Unreported Subpart F Income Extends Statute on Entire Return
    • In a legal memorandum, the IRS concluded that a taxpayer’s omission of subpart F income extends the assessment statute of limitations on the whole return, rather than just that omission, and that an agreement to extend the assessment period doesn’t extend the time limit for claiming a refund. [ILM 202142009, 7/26/2021, rel. 10/22/2021]
  1. IRS Elaborates on Large Partnership Compliance Program
    • A memorandum from an executive in the IRS Large Business and International Division describes some of the procedures the division will implement as part of the large partnership compliance audits that are just beginning. [Tax Notes Today , 10/26/2021, article by Nathan Richman]
    • LB&I Outlines Implementation of Large Partnership Compliance Pilot
      • The IRS Large Business and International Division has issued a memorandum (LB&I-04-1021-0017) providing interim guidance for the implementation of the division’s large partnership compliance pilot program. [LB&I-04-1021-0017, 10/21/2021]
  1. IRS Issues Practice Unit on Form 1040-NR Exam Adjustments
    • The IRS has issued a practice unit on examination adjustments of Forms 1040-NR, “U.S. Nonresident Alien Income Tax Return,” addressing the need for workarounds when using return generation software because of the program’s current lack of a dedicated Form 1040-NR module.  (27 slides). [INT-P-234; 10/26/2021]
  1. Couple Liable for Additions to Tax for Failure to File, Pay Taxes
    • The Tax Court held a couple liable for additions to tax under section 6651 for failure to timely file a return and pay the amount shown on the return, finding that they failed to establish reasonable cause for the untimely filing and payment. They are also liable for an addition to tax under section 6654 for failure to make estimated tax payments. [James R. Morris et al.; T.C. Memo. 2021-120, 10/25/2021],
  1. Offset Bypass Refund Relief Must Be Publicized, ABA Members Say
    • The American Bar Association Section of Taxation has asked the IRS to provide a checkbox and related instructions on Form 911 that specifically pertain to taxpayer requests for an offset bypass refund (OBR) and expedited procedures for handling a Form 911 when the box is checked. [Letter to IRS from ABA Section on Taxation; 10/25/2021]
  1. IRS Attorney Explains Ruling on Capital Gain Exclusion
    • The IRS turned to the dictionary in a recent letter ruling interpreting the term “brokerage services” for the small business stock gain exclusion because the legislative history provided no help, according to the ruling’s author. [Tax Notes Today. 10/27/2021, article by Kristen Parillo]

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 I have relied on Tax Analysts® to provide reliable and timely analysis of Federal tax developments for over 30 years. The “headnotes” you see here are from “Tax Notes Today” In my opinion, the preeminent source of accurate information and thoughtful analysis of important developments and trends in Federal taxation.

(*** identifies item with useful analysis of current issue but not covered in Lynn’s recorded commentary due to complexity and time required for fair comment.)