The first quarter of 2021 is a wrap, and it was a light quarter for standard setting. However, given everything else we have going on, that's probably not a bad thing! This blog covers the few standards that were finalized in Q1. Call to Action: Which standards will most impact you?
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 topics in this edition: 1.**** IRS Will Not Acquiesce in TriNetHolding on FICA Tip Credits In an action on decision the IRS has announced that it will not acquiesce in an Eleventh Circuit holding that an employment services company, rather than its clients, had “control of the payment of wages” and that the company was the statutory employer under section 3401(d) for purposes of a FICA tax refund suit. [ AOD 2021-03; 2021-24 IRB 1199, 6/14/2021] 2.Christian Group Challenges IRS on Proposed Exemption Denial Group that encourages Christians to become involved in civic affairs is challenging IRS’s contention that it doesn’t merit tax-exempt status as a charitable organization. [Tax Notes Today, 6/22/2021, article by Fred Stokeld] 3.Automated Powers of Attorney Promise Big Time Savings The IRS’s announcement that it will launch online tax professional accounts in July is a big win for practitioners, but as always with agency programs, implementation could be tricky, tax industry veterans say. [Tax Notes Today, 6/22/2021, article by William Hoffman]
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: Terms of settlement require reporting malpractice award as ordinary income Let’s look at the Morrissette split-dollar decision one more time ? ! ? ! Church fails its W-2 reporting and payroll tax remittance obligations. Does the tax law matter ? ? ? Tax Notes Today reports same canned speech by “IRS Executive” on Self-Employment tax liability of LLC member……subject to same scathing criticism we reported a month ago in Issue 21-20 Mark-to-Market election applied to holdings of single member LLC, not to holdings of the member Another ‘Practice Unit’ . . . 34 slides explain how to calculate partner’s outside basis . . . This completes partnership basis series
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. Trending topics in this installment include: • Payments by finance company to acquire financing contracts are not currently deductible (2:45 mark) • Liability to pay sales incentive is incurred when “all events test” is met, not by taxpayer’s promise to pay guaranteed minimum (4:08 mark) • Tax Court backs the IRS ... 9th Circuit backs the Tax Court ... IRS can determine unreported income by use of “Indirect Methods” (fancy term for “Bank Deposits”!!!) (5:30 mark) • Substance-over-form” doctrine can be, and was, limited by Congress passing permissive legislation (8:30 mark) • Golf course denied 501(c)(3) status (12:39 mark)
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. Trending topics in this installment also include: • IRS Follows Tax Court, NOT the 6th Circuit (2:32 mark) • Tax Court Rules on Treatment of Split-Dollar Benefit (3:38 mark) • Worthless Stock of Subsidiary ... Ordinary or Capital Loss?? (4:47 mark) • Income Was Not Enough to Require Reporting??? Are You Kidding Me??? (7:11 mark) • A Question of “Taxable Event” When Does it Occur? (8:49 mark) • California District Court Sorts Out “Willfulness” Against Complex History of Finances Affected By Federal Bureaucracy and Pandemic (12:59 mark)
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. Trending topics in this installment also include: • Clarifying Income Subject to NII (Net Investment Income) Tax (2:41 mark) • Expert Should Not Try to be an Advocate in Litigation (3:53 mark) • Tax Provisions in American Rescue Plan (5:22 mark) • LLC Members to be Audited for SE Tax (7:11 mark) • Which Tax Credits Are Safe from Creditors in Bankruptcy (10:31 mark)
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. Trending topics in this installment also include: • Clarifying Income Subject to NII (Net Investment Income) Tax (2:41 mark) • Expert Should Not Try to be an Advocate in Litigation (3:53 mark) • Tax Provisions in American Rescue Plan (5:22 mark) • LLC Members to be Audited for SE Tax (7:11 mark) • Which Tax Credits Are Safe from Creditors in Bankruptcy (10:31 mark)
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. Trending topics in this installment also include: • New K-2 and K-3 for Partnerships with International Exposures (3:36 mark) • The Goofiest ‘Innocent Spouse’ Case Ever ... No Liability!!! (5:15 mark) • IRS Allows ‘Primary Purpose’ Test In Lieu of Allocation Method for Expenses of Operating Aircraft Owned by Sole Proprietor (7:33 mark) • Raising Money to Help One Person Not ‘Exempt Purpose’ (9:42 mark) • IRS Position ‘Substantially Justified’ So No Fee Award to Taxpayer Who Prevailed In Litigation on the Issue (10:54 mark) • Expenses of Operating Race Car Not Deductible by Construction Co. (12:57 mark) • 8th Batch of Economic Impact Payments Are “Out the Door” (15:01 mark) • Exempt Status of African Art Exhibitor Revoked for Failure to Operate “Exclusively for One or More Exempt Purposes Under Section 501(c)(3)” (15:40 mark)
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. Trending topics in this installment also include: • IRS Amends Guidance on Credits (3:24 mark) • Tax Court Determines Fair Market Rent for Pharmacy (5:05 mark) • Tax Court Explains Conditions that Distinguish Deductible Legal Fees from Those Required to be Capitalized (7:04 mark) • IRS Should Trigger Inventory Rules in Sec. 473 so LIFO Decrement Does Not Produce Taxable Income (11:32 mark) • IRS Offers Advice to Gig Workers and Taxpayers Who Received Unemployment Benefits in 2020 (13:10 mark) • IRS Uses Bank Deposit Method to Prove Taxable Income (Over $6 million deposited in 9 accounts in 2 years) (14:23 mark)
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. Trending topics in this installment also include: • Refund Claim Denied for Failure to Sign Return (2:26 mark) • IRS Official Outlines Status of EO Examinations (4:12 mark) • Another FBAR Eighth Amendment Challenge Fails ($3 Million Penalty Not Excessive) (5:50 mark) • IRS Announces Tax Credits for Paid Leave for COVID-19 Vaccines (8:09 mark) • Safe Harbor Provided for Deducting Original PPP Loan Expenses (10:45 mark)
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. Trending topics in this installment include: • Information on suspension of requirement to repay excess advance payments of the 2020 premium tax credit • IRS will not agree to exclude value of defined benefit pension plan from calculation of insolvency for determining income from debt forgiveness under Sec. 108 • Fact sheet describes requirements to report foreign bank and other financial accounts • Male same-sex couple cannot deduct costs of having a child by a surrogate • IRS ruling on RMDs when multiple beneficiaries are designated by IRA owner • Tax Court disagrees with 6th Circuit’s view on classification of “split-dollar” benefits to employee/shareholder • Four months at new job is too short to deduct Moving expenses • IRS ruling on disregarded entity’s income from debt cancellation causes a stir
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. Trending topics in this installment also include: • Revised Practice Unit on when return position might be based on ‘reasonable cause’ and taxpayer acted ‘in good faith’ • IRS guidance on calculation of gain or loss from partnership distributions • Reporting requirements on pandemic-related emergency financial aid provided to college students • Information about various IRS letters sent to taxpayers about their impact payments and/or rebate credits … is there action required? • FTC carryback and carryover instructions and how to apply ordering rules • Race car expenses not ‘necessary’ in home construction and remodeling business • IRS defines ‘restaurant’ for fully deductible business meal allowance
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. Join Lynn for an explanation of changes to the child credit in the American Rescue Plan Act of 2021. This is part of an ongoing collection of short pieces about the American Rescue Plan Act, be on the lookout for more installments soon.
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. Trending topics in this installment also include: • Incomplete gift trusts in IRS crosshairs (1:52 mark) • Excludable disability and/or death benefits (3:49 mark) • FAQ on emergency rental assistance payments (5:27 mark) • American Rescue Plan provisions affecting 2020 income tax returns • Individual Tax Rules in the Act (6:42 mark) • Unemployment Benefits Exclusion Rule (7:20 mark) • Business Tax Rules in the Act (8:55 mark) • Restaurant Revitalization Grants – a Summary (9:50 mark) • Returning Funds to the Treasury (12:41 mark)
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. Trending topics in this installment also include: • Preparers Eager for Guidance on Unemployment Exclusion, Credits • JCT Summarizes Domestic Manufacturing Incentives • Excerpts Available of American Rescue Plan Act of 2021 • IRS Issues Practice Unit on Sale of Partnership Interest • IRS Issues Instructions for Unemployment Compensation Exclusion • Attorney Received Flowthrough Income, Wages From S Corp • Individual Stuck With Additional Tax on Early IRA Distribution • IRS Cautions Against Amended Returns Related to Relief • AICPA Requests Basis Clarifications for Forgiven PPP Loans • IRS Reminds Taxpayers About Changes to RMD Rules • Eleventh Circuit Affirms Payments to Tribe Members Were Taxable
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. Trending topics in this installment include: • No Tax-Exempt Status for “Student Loan Forgiveness” Lottery (3:03 mark) • Intuit Having Trouble with “Free File” Class Action Settlement (4:34 mark) • Sheriff’s Sale Does Not Extinguish Tax Liens (5:46 mark) • Government Lawyer Failed to File 1040 – What Happened? (7:18 mark) • H.R. 1319: – American Rescue Plan Act of 2021 (8:44 mark)
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. Trending topics in this installment also include: • Reporting Cash Transactions – Form 8300 • Insurance for Tax Positions? • Cryptocurrency Disclosure on 2020 Returns • Charitable Contribution Rules Require at Least “Substantial Compliance" but Strict Compliance is Better"
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. Trending topics in this installment also include: • District Court Affirms Debtor’s Taxes Were Not Dischargeable • Car Salesperson’s Efforts to Throttle Tax Lien Stall Out • IRS Issues Warning on Questionable DPAD Refund Claims • IRS Issues Practice Unit on Producer’s UNICAP Calculations