Tax Roundup, 9/16/2013: Enitity extension day! And booster club blues.

September 16th, 2013 by Joe Kristan

Today is the final extended deadline for your extended calendar 2012 1041, 1065, 1120 and 1120-S filings.  You know the drill: e-filing is best, but if you paper file, use Certified Mail, Return Receipt Requested, to document your timely filing.  If you don’t make it to the post office on time, you can use a designated private delivery service shipping receipt to document timely filing, but be sure you use the right service, and be sure to use the right IRS Service Center street address.

I’m sure somebody out there is thinking something like “Certified mail only proves you mailed something, not the actual form.”  All I can say is that certified mail receipts have always worked for me, including getting an erroneous $9,000+ penalty reversed on an extended partnership return just in the last year.  (Why didn’t they e-file? The partnership had a short year because of a technical termination, and the IRS rejected the e-filed extension.)

Third quarter estimated payments are also due today.



TaxProf, Crawford: Sumner Redstone’s 40-Year-Old Gift.  A crazy case where the IRS is asserting taxes on an alleged gift from the 1970s.  The taxpayer denies that there was a gift in the first place.

Filing a gift tax return starts the three-year statute of limitations, even when there is no tax due, and it is worth the minimal hassle and expense, especially any time gifts other than cash or publicly traded securities are made, to make sure you aren’t fighting some stupid battle over a 2013 filing in 2050.



Wall Street Journal, Booster Clubs Attract Scrutiny, (Laura Saunders):

To be tax-exempt, booster clubs and similar groups have to meet the same requirements as other charities. That means a group must serve the public interest, and its earnings can’t benefit only a few people. That second requirement—known in tax law as “private inurement”—is where the Capital Gymnastics Booster Club tripped up.

I think people may be reading too much into this decision.  The club involved had bad facts.  From the Tax Court summary of the decision (my emphasis):

Membership in P was mandatory for the parents of athletes who wanted to participate on the teams that were operated out of that private gym, and each family paid to P an annual assessment to cover the athlete’s entry fees to compete in the meets and to offset the estimated expenditures for the coaches’ travel.  The assessment ranged from $600 to $1,400 per athlete for FY 2003, depending on the athlete’s competitive level.

A typical high school athletic or band program might encourage booster club membership, but they don’t normally require it.  Here it looks like they went too far by running all parent expenses through the club.  That’s not the way I have seen it done with my kids’ activities.   Given this decision, though, it would be helpful for the IRS to tell the zillions of parent-run booster clubs out there what is and isn’t allowed.  Right now volunteer parents are just winging it as best they can.

Related: Peter Reilly, Does Tax Court Booster Decision Threaten Scouting ?


William Perez, Solo 401(k) Contributions Due by October 15th

Kay Bell, Estimated tax payment #3 for 2013 is due Monday, Sept. 16

Paul Neiffer, Monday is Final Due Date for Business Returns

Russ Fox, Business and Trust Tax Filing Deadline is Monday

TaxGrrrl, Back To School: 10 Smart Tax Lessons To Move You To The Head Of The Class   

Robert D. Flach:  ADVICE FOR NEW EMPLOYEES.  Short version: save as much as you can in tax-deferred retirement accounts, and start now.  The numbers Robert shows are compelling.


William McBride,  Opposite the Headlines, Income Inequality has Gone Down over the Last Two Decades (Tax Policy Blog)

Jack Townsend,  Ninth Circuit Affirms Barry Bonds Conviction for Obstruction 

Russ Fox,  California Is #1…For Highest Marginal Tax Rates for S-Corps


Phil Hodgen, Tax law is considered harmful:

Tax law is written by 10,000 authors of wildly varying intelligence and intention. Different pieces were written at different times — sometimes decades apart.

Sometimes I tell people that The Tax Update Blog has 535 comedy writers.  I’m better off than I realized.


News from the professon.  PwC Partner Offers Perfectly Good Explanation for Driving Like a Maniac (Going Concern)





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