Nichols Tax Update: Issue 21-30

Trending in this edition:

  1. IRS Launches New Tax Pro Account Feature
    1. The IRS has announced (IR-2021-154) the launch of its new Tax Pro Account, a tool that will allow individual taxpayers to authorize their tax practitioner to represent them before the IRS with a power of attorney and to view their tax account with a tax information authorization. [IR-2021-154; 7/19/2021]
  1. Couple Swerved Too Far From Substantiation Rules, Tax Court Says
    1. The Tax Court, in a summary opinion, sustained the IRS’s disallowance of a couple’s claimed loss deductions, finding that that the reconstruction of S corporation expenses based on an estimate of industry standard profit margins does not take the place of substantiation or provide a rational basis on which an estimate can be made under the Cohan rule. [Sam Fagenboym et ux. T.C. Summ. Op. 2021-19; 7/19/2021]
  1. IRS Proposes New Form 7203 for S Corporation Shareholders …
    1. Shareholders will use Form 7203 to calculate their stock and debt basis, ensuring the losses and deductions are accurately claimed. The form and instructions have not been made available for download at this time. Rather, interested parties are directed to request the form and instructions from an IRS contact listed below [86 F.R. 38204-38205, Form 7203; 7/19/2021]

Jon Callahan
Room 6526
1111 Constitution Avenue.
Washington, DC 20224

  1. IRS Argues Partnership Can’t Claim Easement Donation Deduction
    1. The IRS filed a motion for partial summary judgment in the Tax Court asking it to hold that a partnership was not entitled to a $180 million charitable deduction for a conservation easement donation because it failed to protect the conservation purpose in perpetuity as required by section 170(h)(5)(A) and because of defects in the appraisal summary. [Hancock County Land Acquisitions LLC et al.; No. 12385-20, 7/8/2021]

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.)

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