Welcome to the Federal Tax Update Podcast, hosted by Lynn Nichols. This is presented as a member benefit by the South Carolina Association of CPAs. It is produced to provide current information about developments in U.S. tax law, such as cases, ruling, IRS pronouncements and expert comments on hot topics.
Trending in this edition:
- Refund Claim Dismissed for Failure to Sign Return (2:26 mark)
The Court of Federal Claims granted the government’s motion to dismiss a couple’s refund claim for lack of subject matter jurisdiction because by not satisfying the signature verification requirement they failed to duly file their claim before commencing the refund action. [Andrew P. Mattson et al. Ct FedClms; No. 19-1113T, 4/15/2021]
Also see “Both advised by same CPA: John Anthony Castro” [Alan C. Dixon; Ct FedClms, No. 19-270T, 2.21.2020]
- IRS Official Outlines Status of EO Examinations (4:12 mark)
The IRS is pursuing various compliance projects involving tax-exempt organizations while facing challenges posed by the COVID-19 pandemic. [Tax Notes Today; 4/21/2021, article by Fred Stokeld]
- Another FBAR Eighth Amendment Challenge Falls Flat (5:50 mark)
A lower court has again held that the Eighth Amendment’s ban on excessive fines does not apply to willful foreign bank account reporting penalties in Landa v. United States.
Court Rejects Individual’s Challenge to $3 Million FBAR Penalty
The Court of Federal Claims granted the government summary judgment in an individual’s suit challenging a $3 million penalty for failure to file a foreign bank account report regarding his interest in a Swiss account, finding that the penalty was not wrongfully assessed because he had a financial interest in the account, and it was not an excessive fine under the Eighth Amendment. [Leon Landa; Ct FedClms, No. 18-365, 4/19/2021]
- IRS Announces Tax Credits for Paid Leave for COVID-19 Vaccines (8:09 mark)
The IRS has announced (IR-2021-90) the release of a fact sheet that provides further details of tax credits available under the American Rescue Plan Act of 2021 to help small businesses, including a tax credit for providing paid leave to employees receiving COVID-19 vaccinations. [IR-2021-90; 4/21/2021]
Fact Sheet Details Tax Credits for Paid Leave for COVID-19 Vaccines
The IRS has released a fact sheet (FS-2021-9) providing details for employers that are eligible under the American Rescue Plan Act of 2021 to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. [FS-2021-9; 4/21/2021]
- Safe Harbor Provided for Deducting Original PPP Loan Expenses (10:45 mark)
Eligible taxpayers can officially deduct original Paycheck Protection Program loan expenses under an IRS revenue procedure providing a safe harbor to claim the expenses on the subsequent year’s tax return. [Tax Notes Today; 4/23/2021, article by Kelley Taylor]
IRS Provides Safe Harbor for Some PPP Loan Recipients
The IRS has issued guidance (Rev. Proc. 2021-20) providing a safe harbor for some taxpayers that received a loan through the Paycheck Protection Program and did not deduct otherwise deductible expenses paid or incurred during the tax year ending after March 26, 2020, and on or before Dec. 31, 2020, that resulted in, or were expected to result in, forgiveness of the loan. [Rev. Proc. 2021-20; 2021-19 IRB 1, 4/22/2021]
BONUS TOPICS FOR FURTHER STUDY
The following items contain useful analysis on these issues but are not covered in Lynn’s video commentary due to complexity and time required for fair comments.
Benjamin M. Willis examines how the IRS denies basis in some transactions, and he argues for the revocation of Rev. Rul. 81-187. [Tax Notes Today, 4/19/2021, article by Benjamin Willis]
Kevin Sigler and Jake Sigler explore the Setting Every Community Up for Retirement Enhancement Act of 2019 and examine the changes made to the age for required minimum distributions, the life expectancy tables, and the required distributions to a non-spouse beneficiary upon the death of the plan owner. [Tax Notes Today; 4/14/2021, article by Kevin and Jake Sigler]
Missed last week’s Tax topic? Catch up with Lynn on his Tax Updates video playlist.
All commentary is brief, and you should not take a position on the items discussed until you thoroughly examine it with authoritative sources. The topics can be found discussed in further length at Tax Notes Today.
“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,’ the preeminent source of accurate information and analysis of important developments and trends in Federal taxation,” Nichols says.
You can contact Lynn Nichols at firstname.lastname@example.org or 714.321.3387 and connect on LinkedIn.
A federal tax specialist for 50 years, Lynn Nichols provides tax consulting services to CPA firms on complex federal income tax issues, professional standards in tax practice and effective tax practice management.
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