Nichols’ Tax Update, Issue 22-1

  1. Label Doesn’t Determine Rental Self-Employment Tax Exclusion
    • In a legal memorandum, the IRS concluded that the definition of rental activity from section 469 doesn’t control the real estate rental exclusion from the section 1402 self-employment tax rules, and that the latter exclusion could apply to nonprofessional rentals if services provided aren’t substantial enough to be a material part of the payments.  [ILM 202151005; 11/19/2021, rel. 12/23/2021]
  1. Investment Firm’s Easement Defense Not Covered, Say Insurers
    • An Atlanta investment firm that has been sued by former clients for allegedly selling them abusive syndicated easement deals is now facing a lawsuit (Certain Underwriters at Lloyd’s v. Strategic Capital Partners LLC) from insurers claiming their policy doesn’t cover those defense costs. (Same song . . . second verse !  [Tax Notes Today, 12/28/2021, article by Kristen Parillo]
    • See Complaint in Georgia State Court, (Certain Underwriters at Lloyd’s      v. Strategic Capital Partners LLC.) and Class Action filed in federal court for the Northern District of Georgia; (Hoover v. Strategic Capital Partners LLC)
    • See comments in Nichols Tax Update Podcast Issue 21-51 re: action by Westport Insurance Corp. v. Kowan & Cordon LLC to recover expenses and void coverage.
  1. ‘But I Mailed It’ — CrispinoUpholds IRS Mailbox Rule Regulation
    • Frank G. Colella examines Crispino and argues that the decision all but seals the validity of regulations regarding the common law mailbox rule. [Tax Notes Today; 12/28/2021, article by Frank Colella}
  1. FTC Regs Clarify Jurisdictional Nexus Requirements
    • The U.S. Treasury Department has released anticipated final foreign tax credit regulations that follow up on proposed regulations published in 2020, clarifying concerns about foreign taxes and the new jurisdictional nexus requirement. [Tax Notes Today; 12/29/2021, article by Michael Smith]
    • Final Regs Focus on Creditability of Foreign Taxes
      • The IRS has issued final foreign tax credit regulations (T.D. 9959) that include revisions to the net gain requirement and the replacement of the jurisdictional nexus rule with an attribution rule, which together will tighten the rules governing the creditability of foreign taxes and likely restrict creditability of foreign taxes relative to the existing regulations, according to the preamble to the regs. [T.D. 9959, 12/28/2021] 283 pages all together. . . . preamble 112 pages.
  1. Tax Court Announces Opinion Search Feature for DAWSON
    • The Tax Court announced in a December 28 release that the public can search for opinions by case name, docket number, keyword, phrase, judge, date range, or by opinion type through its case management system, Docket Access Within a Secure Online Network (DAWSON). [Tax Notes Today; 12/28/2021]

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(*** 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.)