Posts Tagged ‘Keith Fogg.’

Tax Roundup, 3/8/16: Getting robbed, and again. And: IRS allows retroactive WOTC certification for 2015.

Tuesday, March 8th, 2016 by Joe Kristan

walnutstreet20160308It’s not enough to get robbed; you have to time it right. A “pump-and-dump” securities fraud victim claimed a theft loss deduction. The IRS said “yep, you were robbed.” But they also said that they didn’t time their robbery deduction properly, and therefore were out of luck. And, it turns out, they were.

Court of Federal Claims Judge Sweeney explains (my emphasis, citations and footnotes omitted):

There is no dispute that plaintiffs discovered the theft loss in 2002.31 And, neither plaintiffs nor defendant disputes that in 2002, there existed “a claim for reimbursement with respect to which there [was] a reasonable prospect of recovery Plaintiffs filed their arbitration claim against Donald & Co., Mr. Stetson, Mr. Volman, and Mr. Ingrassia in February 2002, and by the end of that year, they had neither sought to adjourn the proceedings nor withdrawn their claim. Accordingly, in light of the ongoing arbitration proceedings, plaintiffs could not claim a theft loss deduction in 2002. Instead, they were required to delay their deduction until the “year in which it [could] be ascertained with reasonable certainty whether or not” they would receive reimbursement of their losses from their arbitration claim. Plaintiffs determined that the proper year to claim their theft loss was 2004, and filed amended federal income tax returns reflecting the deduction. The IRS disallowed plaintiffs’ refund claim, and takes the position in this litigation that 2004 was not the proper year for plaintiffs to claim their theft loss deduction.

The court said the victims didn’t prove that they were entitled to the deduction:

Plaintiffs claim that they sustained the loss in 2004 because by the end of that year, they had no reasonable prospect of recovering on their arbitration claim. However, under the factual circumstances presented in this case, the test is not whether plaintiffs had a reasonable prospect of recovering on their arbitration claim in 2004, but is instead whether, in 2004, plaintiffs could have ascertained with reasonable certainty that they would not recover on their arbitration claim. To satisfy their burden under the latter test, plaintiffs were required to produce objective evidence that they abandoned their arbitration claim in 2004. They failed to do so. In the absence of such evidence, plaintiffs are not entitled to a theft loss deduction for the 2004 tax year.

The opinion doesn’t say whether the victims filed protective refund claims for subsequent years to preserve their refund rights. It would be another robbery if they were unable to get their theft loss deduction because they got the year right. The statute in such cases should allow taxpayers to recover in the proper year if the IRS successfully second-guesses the timing of a theft loss.

The Moral? If you are a fraud or theft victim, the timing of the loss deduction is very important. If the IRS disputes the loss on examination, be sure to file protective refund claims for open years to protect your rights.

Cite: Adkins, Ct. Fed. Claims No. 10-851T.

 

Speaking of getting robbed twice: IRS shuts down ID-thief assistance portal. A week after The Tax Foundation pointed out that the IRS IP-PIN online portal made identity theft victims vulnerable to being victimized a second time, the IRS has temporarily shut it down:

As part of its ongoing security review, the Internal Revenue Service temporarily suspended the Identity Protection PIN tool on IRS.gov. The IRS is conducting a further review of the application that allows taxpayers to retrieve their IP PINs online and is looking at further strengthening the security features on the tool.

Nothing to see here, move along.

 

Work Opportunity Credit guidance updated for retroactive 2015 credits. Congress re-enacted the expired Work Opportunity Tax Credit retroactively for 2015. To claim the credit for hiring certain classes of hard to employ workers, employers have to get the employee eligibility verified within 28 days. As this was impossible for an expired credit, the IRS yesterday gave employers until June 29 of this year to get the certification for 2015 hires (Notice 2016-22)

 

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Russ Fox, What Part of “Permanent Injunction” Didn’t You Understand? “Mr. Herrera is being held at ClubFed until he closes his business and complies with the injunction.” That should do it.

TaxGrrrl, Understanding Your Tax Forms 2016: 1099-B, Proceeds From Broker & Barter Exchange Transactions

William Perez, How to Mail Tax Returns to the Internal Revenue Service

Keith Fogg, Making Claims and Spending Refunds in Bankruptcy. “The 9th Circuit recently affirmed the district court opinion granting summary judgment to the IRS in a case brought by Mr. Stanley Burrell aka M C Hammer seeking to equitably estop the IRS from collecting on taxes for two years which it failed to include on the proof of claim in his bankruptcy case.”

Jack Townsend, Proposed FinCEN Rulemaking for Rules on FBAR Reporting for Financial Professionals

 

Tony Nitti, Would Hillary Clinton’s Tax Plan Kill The Incentive Stock Option?. Actually, AMT has done that pretty well already.

Robert Wood, President Hillary Won’t Cut Tax Deductions To Charities Like Clinton Foundation. Of course not.

Peter Reilly, Chasm Of Class And Privilege – Clinton Tax Plan Hits Top 1% – Sanders Plan Hits Top 5%. “What I find really interesting is the way in which the proposals reflect the difference in the Sanders and Clinton constituencies.”

Kay Bell, Trump is last holdout as Kasich releases tax returns

 

Jason Dinesen, 6 Things You Might Not Know About Enrolled Agents. “2. We Don’t Work for the IRS

 

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Renu Zaretsky, Budget Chaos, Tax Breaks, Loopholes, and Incentives. Today’s TaxVox headline roundup covers EU tax investigations of multinationals, IRS tax investigations of multinationals, and scoundrels “patriotic millionaires” against carried interests.

TaxProf, The IRS Scandal, Day 1034

Stuart Gibson, Competition Policy and Tax Policy in The Twilight Zone (Tax Analysts Blog). “From a tax perspective in the U.S. (and probably Europe), this is simply a garden-variety case of a taxpayer negotiating a good deal with a foreign tax authority. From a European competition perspective, the answer is a bit more complicated.”

 

News from the Profession. Why Accountants Suck at Marketing (Blake Oliver, Going Concern)

 

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Tax Roundup, 3/1/16: Iowa-only preparer regulation dies unmourned.

Tuesday, March 1st, 2016 by Joe Kristan

20151124-1Bwahahaha! Tax pros across Iowa can continue to pillage their poor unsuspecting clients, and there’s nothing you can do about it!

What? You aren’t being pillaged? You are free to hire and fire a tax preparer or consultant who is incompetent, or who charges more than you want to pay? Then maybe it’s not such a tragedy that a bill to license and regulate tax preparers in Iowa, SSB 3135, died in the Iowa legislature at the “funnel week” deadline. The bill, sponsored by the Chairperson of the Iowa Senate State Government committee, “requires the Iowa accountancy examining board to license all persons who wish to practice as tax consultants or tax preparers.” As Russ Fox and Jason Dinesen note, it would exempt attorneys and CPAs while covering enrolled agents.

The proposal has all of the bad features of the abortive federal tax practice regulation, plus the additional flaw of making tax preparation in Iowa more expensive than in other states.

Occupational licensing is a crony capitalist job killer, and observers across the spectrum, from The Des Moines Register to the Koch Brothers have figured this out. SSB 3135 dies unmourned.

 

Russ Fox, Frivolity Has a Price: $19,837.50. In case you’re wondering why your attorney won’t help you argue that you don’t have to pay taxes because the judge has gold fringe on his flag, Russ can help you.

TaxGrrrlFiguring Out Taxes, Pay And More On Leap Day: Are You Working For Free Today?

Peter Reilly, Colorado Can Force Vendors To Rat Out Residents On Use Tax. Oh, boy.

Keith Fogg, Judge Paige Marvel Will Become New Chief Judge of the Tax Court on June 1 (Procedurally Taxing).

Robert Wood, 9 IRS Audit Tips From The Trump Tax Flap. I’m not sure how universal these tips are.

Kay Bell, Cruz & Rubio release taxes, challenge Trump to do same

Jim Maule, Should Candidates Be Required to Release Tax Returns?  I think they should be required to prepare them by hand on a live webcast.

 

Scott GreenbergThe Most Popular Itemized Deductions (Tax Policy Blog):

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“Out of the 44 million households that itemize deductions, almost 43 million deduct the taxes they pay to state and local governments.”

 

TaxProf, The IRS Scandal, Day 1027

David Henderson, Henderson on the Case Against a VAT (Econlog).

Greg Mankiw, Misunderstanding Marco. “The Rubio plan is essentially the X-tax designed by the late Princeton economist David Bradford.  It is a progressive consumption tax.”

Tyler Cowen, The regulatory state and the importance of a non-vindictive President. That ship sailed seven years ago, and its return isn’t on the horizon, given the polls.

Renu Zaretsky, Disputes, Development, Filing, and FuelToday’s TaxVox roundup covers ground from Google’s international tax issues to lax security protocols from IRS “free file” providers.

 

Career Corner. Crackin’ Under Pressure: Making Mistakes During Busy Season (Caleb Newquist, Going Concern). “Regardless, mistakes are always mortifying to those who make them and, regardless of what you think, EVERYONE MAKES THEM.”

 

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Tax Roundup, 2/29/16: Governor wants to couple Sec. 179 for 2015 only. And: Iowa Farm 1040s due April 30.

Monday, February 29th, 2016 by Joe Kristan

20120906-1One year for you, forever for them. It turns out there’s a catch to Governor Branstad’s change of heart on conforming with the $500,000 federal Section 179 deduction. He only wants it for one year.

O. Kay Henderson reports:

Branstad did not include this recommendation in the plans he submitted to legislators in January. Republicans in the House have voted to make this tax break available to about 177,000 Iowa small business owners and farmers who’re filing their taxes right now and the Republicans in the legislature would like to make it permanent, but Branstad says he’ll only accept a one-year extension.

“We’d lose too much revenue,” Branstad says, “and it would put us in a financial position that we couldn’t sustain it for the long term.”

The Section 179 deduction allows taxpayers to deduct the cost of up to $500,000 of equipment that would otherwise have to be capitalized and depreciated. It is reduced dollar-for-dollar as purchases exceed $2 million, so it only benefits smaller businesses. The Governor would limit the deduction to $25,000, with the phase-out starting at $200,000. With the cost of a combine often in excess of $200,000, the Governor’s plan would increase taxes for many farmers.

The $500,000 has been passed a year or two at a time by Congress, and Iowa has gone along each year since 2010. Congress enacted the $500,000 limit permanently late last year, effective starting in 2015. Many practitioners were surprised when the Governor announced at the beginning of this legislative session that he opposed conforming to the federal limit. The Iowa House overwhelmingly voted for conformity anyway, and it would likely pass in the Senate if Majority Leader Gronstal would allow a vote.

While the Governor says the state can’t afford the $90-95 million cost of Section 179 for smaller businesses, he has plenty of money for tax credits for big companies. Here is what his 2017 budget provides for incentive and economic development tax credits:

Iowa credits fy 2017

So, according to the Governor, while the state can’t afford $90 million for small businesses buying equipment, except maybe for one year, it can afford three times that for big companies and well connected insiders, forever and ever.

People are starting to figure it out, including The Des Moines Register, which ran an editorial yesterday, End subsidy for big companies:

Last year, the state sent checks for $42.1 million to 186 companies under the research activities program, the Iowa Department of Revenue reported.

80% of that went to just eight companies.

Research and development is essential for corporations to compete in a high-tech world. Should taxpayers give big corporations a subsidy for doing this basic business function?

No, concluded a Special Tax Credit Review panel in 2010. Gov. Chet Culver appointed the panel after the film tax credit scandal. The panel recommended eliminating the refundability of the research activities credit for companies with more than $20 million in gross receipts.

“It seems unreasonable for the state to be providing successful, larger corporations refund checks for amounts of the Research Activities Tax Credit over its tax due to the state,” the panel concluded.

Unreasonable, indeed. The panel made other recommendations, including capping tax credits to businesses and providing a five-year sunset on all tax credits, requiring the Legislature to vote to continue them. Lawmakers largely ignored the recommendations.

It’s nice to see someone else remembers the Culver review panel. It found no clear benefit to any tax credit program. But while politicians can issue a press release when a big company gets a $14 million tax credit, nobody gets to cut a ribbon when a farmer buys a new tractor.

Related: Iowa extends Farmer 1040 due date to April 30.

 

Remember when the film credit repeal was going to kill the Iowa film industry? Film, Television Production Thriving in Iowa (KCRG.com). Whenever someone suggests that we kill film credit programs, the economic development people warn that nobody will stay in Iowa if we don’t pay them to.

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Laura Saunders, IRS Says Cyberattacks on Taxpayer Accounts More Extensive Than Previously Reported; Tax data for about 700,000 households might have been stolen (Wall Street Journal). When this first came out, the IRS said 114,000 taxpayers were affected. Then it was 334,000. Are they done yet? The TaxProf has more.

Related: 

Math Is Hard, IRS Edition (Russ Fox). The actual number was more than 700,000. And the unsuccessful attempts didn’t total 10,000; they totaled 500,000!”

IRS: Efforts To Access Taxpayer Accounts Twice As Bad As Originally Thought (TaxGrrrl)

 

Kristine Tidgren, Gifted Assets and Divorce: Nothing is Certain (Ag Docket)

Paul Neiffer, Iowa Farmers Have Until April 30 to File Iowa Tax Returns

Jason Dinesen, Glossary: Iowa Form 126

William Perez, Served Time and Later Found Not Guilty? You Could Be Due a Refund

Annette Nellen, Trailing Nexus – Extra Complexity. “As if it isn’t already difficult enough for a business to know if it has income or sales tax nexus in a state, it might have ‘trailing nexus.'”

Keith Fogg, Private Debt Collection. “Adding non-IRS employees who will contact taxpayers will further confuse taxpayers already receiving calls from scam artist trying to shake them down in the name of the IRS and create other problems as well.”

 

Joseph Thorndike, Forget the Audit: Trump Should Release His Tax Returns Today (Tax Analysts Blog)

Kay Bell, IRS audit doesn’t prevent Trump from releasing taxes

Alan Cole, Why Marco Rubio and Ted Cruz’s Tax Plans Generate More Growth than Donald Trump’s (Tax Policy Blog)

Peter Reilly, Sanders Tax Plan Harder On Millionaires Than Billionaires

TaxProf, The IRS Scandal, Day 1024Day 1025Day 1026.

 

Robert Wood, Oscar Academy Sues Over Racy $230,000 Gift Bags. They want more?

 

 

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Tax Roundup, 2/26/16: Gronstal hints at approach to Section 179 coupling deal. And: Yes he can! (Release his returns)

Friday, February 26th, 2016 by Joe Kristan

couplingInteresting, if true. In opening hostage negotiations over the fate of Section 179 coupling, Iowa Senate Majority Leader Gronstal may have hinted at a “Main Street vs. Walnut Street” approach. From wcfcourier.com:

If the choice is between offering tax relief to a limited number of manufacturers “or taking care of 30,000 farmers, 25,000 small businesses,” Gronstal said he would “gravitate more toward the 50,000 or 60,000 effort to help those folks (rather) than something that is much more narrow in terms of its impact.”

I say “may have” because I think he is hinting at trying to get the Governor to reverse its regulatory change to sales tax rules on manufacturing supplies.

By “Walnut Street,” I refer to downtown Des Moines, where several of the big law/lobbying firms in town have their offices (Nothing against Walnut Street — that’s where Tax Update World Headquarters is located, too).  Whether or not Sen. Gronstal realizes it, the coupling issue is ultimately about whether to benefit a handful of insiders and big companies benefitting from special tax benefits, or whether to further the interests of the rest of the taxpayers who pay for any special deals.

The revenue cost from adopting the $500,000 Section 179 limit for Iowa is estimated around $90 million. Eight taxpayers by themselves claimed $35 million in research credits in 2015, of which around $30 million were paid to the companies in cash because they exceed the claimants income tax bills. Just last week the state promised $15 million to DuPont as a location incentive. The potential loss of Section 179 deduction is making its many beneficiaries suspicious of the multi-million dollar “economic development” tax credits that benefit relatively few insiders with lobbyists.

Walnut Street back in the day.

Walnut Street back in the day.

While Senator Gronstal will insist on concessions for passing the bill, I expect he will reach a deal without insisting on his full pound of flesh. More than anything else, he wants to remain Majority Leader, with control over whether legislation lives or dies. He has only 26-24 control of the Senate. If he is perceived as blocking coupling, it may be just enough to tip a close race or two against his party. I think his reference to the “50,000 or 60,000” shows he’s aware of this. That’s why I think an agreement to couple with the federal limit is now likely in the next two or three weeks. I have no insider information to confirm this guess.

Related: Me, Tax season impasse: why your 2015 Iowa tax return may be on hold. My new post at IowaBiz.com, the Des Moines Business Record Business Professional’s Blog.

Other coverage: Des Moines Register, Gronstal opens door to Iowa tax-coupling deal

 

Yes he can! Trump says he can’t release tax returns because he’s being audited (marketwatch.com). That’s not true, of course. While it’s illegal to release someone else’s returns without their permission, you can make your own returns public any time. The IRS doesn’t make you sign some sort of confidentiality agreement when they audit you.

Like every other silly thing he says, this probably will probably increase his standing in the polls.

Related: TaxGrrrl, Trump Won’t Release Tax Returns, Citing IRS Audit: Is It A Legitimate Excuse? “Trump could absolutely release those returns now – even in the middle of an audit.”

 

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Tony Nitti, Beachbody Coach? Rodan & Fields Consultant? At Tax Time, Beware The Hobby Loss Rules. “If your Facebook feed is anything like mine, videos of clumsy toddlers and unlikely animal pals have recently given way to a relentless string of friends pushing side businesses.”

Kay Bell, Penalty for late tax filing increases in 2017. “Starting in 2017, if you send in your Form 1040 (and additional forms and schedules) more than two months after the return is due, you’ll be slapped with a penalty of $205 or 100 percent of your due tax, whichever amount is smaller.” Another example of the ugly practice of funding the government through penalties instead of taxes.

Keith Fogg, Discharging the Failure to File Penalty in Bankruptcy (Procedurally Taxing).

Somehow I missed this: WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ – SPECIAL TAX SEASON EDITION (Robert D. Flach). “An unprecedented tax season BUZZ!  Some good stuff that needs to be spread around now – and could not wait until April.”

Andrew Mitchel, Charts of Examples in Rev. Proc. 91-55: Form 5472 & Direct and Ultimate Indirect 25% Shareholders. A big issue when you have foreign owners of a U.S. corporation.

Robert Wood, Kanye West Could Still Get $1 Billion Tax Free. Why?

Jim Maule, Section 280A and the Tree House. “The reader asked, ‘Can a tree house qualify under the Section 280A rules? Can a tree house be depreciated?’ Though there’s no direct authority, careful reading of the applicable statute provides an answer.”

Party on Walnut Street.

Party on Walnut Street.

 

TaxProf, The IRS Scandal, Day 1023

Renu Zaretsky, Times get taxing for candidates… Today’s TaxVox headline roundup covers last night’s debate, candidate tax returns, and the lost credibility of the IRS under Shulman and Koskinen.

 

News from the Profession. Password Inundation: Password Policies We Love to Hate (Megan Lewczyk, Going Concern).

 

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Tax Roundup, 2/19/16: Sen. Bolkcom says Iowa coupling won’t happen. And: An expat writes the First Lady.

Friday, February 19th, 2016 by Joe Kristan

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Accounting Today visitors: Click here for the Presidents Day post.

The Fix is in. Small businesses fighting to retain the full $500,000 Section 179 deduction in Iowa got more bad news yesterday. Senator Joe Bolckom, Chairman of the Iowa Senate Ways and Means Committee, yesterday issued a statement saying it won’t happen:

Statement by Sen. Joe Bolkcom
Chair of the Senate’s Ways & Means Committee

“Based on a recommendation from Governor Terry Branstad and David Roederer, Director of the Iowa Department of Management, the Iowa Senate will not couple Iowa’s tax law with the federal changes for tax year 2015.

“We simply cannot afford to couple with federal changes this year and responsibly balance the state budget.”

I don’t recall Democratic Sen. Bolckom ever being so eager to accept Republican Governor Branstad’s recommendations. It appears that the fix is in. You might recall that the House passed a broad “coupling” bill overwhelmingly last month. I suspect the Senate would also, if it got a chance. Arrangements are apparently in place to ensure that vote never happens.

The Governor proposes (SSB 3107) to follow Congress only with respect to the research credit. Like Section 179 and the other provisions that the Governor proposes to not couple with, the research credit had expired at the end of 2014. Iowa law defines qualified research eligible for the credit with respect to the federal definition.  There may be no such thing as qualified research, and no research credit, for Iowa without retroactive coupling.

capitol burning 10904This means the Governor is proposing to continue big cash subsidies to some of Iowa’s largest corporations with retroactive coupling to the federal research credit renewal, while increasing taxes on Main Street taxpayers by not coupling the the Section 179 renewal.

The Des Moines Register reports on the controversy in today’s edition:

Sen. Randy Feenstra, R-Hull, criticized Senate Democrats on Thursday, saying they have failed Iowa farmers and small-business owners by choosing not to couple state law with federal tax depreciation changes. That will cost Iowans millions of dollars in additional taxes, he said.

“This is shameful,” Feenstra said. “This affects every small business and farmer in this state. Senate Democrats failing to move this bill will create significant hardships for many Iowans who anticipated we would pass this coupling legislation like we have in past years.”

The Register article closes:

Ben Hammes, Branstad’s spokesman, said late Thursday that the governor is working with the House and Senate to resolve their differences.

As the Senate and the Governor seem to be on the same side, resolution may be elusive.

The Department of Revenue has not issued guidance on how to deal on 2015 filings with non-coupled provisions, which include:

Exclusion for IRA contributions to charity
Exclusion of gain from qualified small business stock
Basis adjustment for S corporation charitable contributions
Built-in gain tax five-year recognition period
Educator expense deduction
Exclusion of home mortgage debt forgiveness
Qualified tuition deduction
Conservation easement deductions
Deduction for food inventory contributions

What to do? While efforts continue to prevent the unexpected tax increase caused by the Governor’s decision, that’s not the way to bet. If you have a big refund coming, or if you are a farmer who must file by March 1, file assuming that coupling won’t happen. But otherwise it may wise to wait for further guidance, especially for issues where the proper Iowa non-coupled treatment isn’t entirely clear — such as for IRA charitable distributions. And who knows – maybe the legislature will change its mind yet.

Related: Paul Neiffer, Why Won’t Iowa Couple Section 179?!

 

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Robert Wood, Dear Mrs. Obama, Why I Gave Up My U.S. Citizenship:

I have lived abroad most of my life. This is my 46th year in Canada. I married Canadian, my kids are Canadian, not American, I have worked my entire life in Canada. I invest here, and will retire here. I am Canadian, but as you are likely aware, giving up that USA brand is not easy. I have many relatives living in the 50. I used to love to visit them. At the moment, I couldn’t care less if I ever cross that border again.

This brings me to my main reason for handing in my passport: you are still taxing me.

Mrs. Obama couldn’t care less.

Kay Bell, IRS issues an extra tax phishing alert on the heels of its annual Dirty Dozen tax scams list

TaxGrrrl, IRS Issues ‘Dirty Dozen’ List Of Tax Schemes & Scams For 2016

Jack Townsend, IRS Issues Publication Warning of Abusive Tax Shelters and Scams

Keith Fogg, Trustee Personally Liable Based on Application of Insolvency Statute (Procedurally Taxing). “It can trace its roots back further into English common law and the statement ‘the King’s debtor dying, the King comes first.'”

 

Joseph Henchman, Letter to IRS Commissioner Re IRS Website Data Vulnerability

Howard Gleckman, How The GOP Candidate’s Tax Plans Stack Up Against One Another (TaxVox)

Jeremy Scott, Obama’s Oil Barrel Tax Would Be Extremely Regressive (Tax Analysts Blog)

TaxProf, The IRS Scandal, Day 1016

Robert Goulder, Revenue Losses From Profit Shifting: The Numbers Tell a Story (Tax Analysts Blog)

 

Career Corner: L’Affaire Denim: Accounting Firm Dress Code Debates Span Borders, Decades (Jim Peterson, Going Concern).

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Tax Roundup, 2/17/16: Nationwide ‘unregulated’ tax practice regulated out of business. And: Where’s Roger?

Wednesday, February 17th, 2016 by Joe Kristan

20150921-1The Wild West of Unregulated Tax Practice. Well, not entirely: Federal Court Shuts Down Nationwide Tax Preparation Business (Department of Justice):

A federal court in Chicago has ordered Servicios Latinos Inc. to close its nationwide tax preparation business, the Justice Department announced today.  The order comes after the Justice Department filed a civil lawsuit against the business and its owners, Georgina Lopez, Pamela Miranda and Jorge A. Miranda, alleging that the defendants falsely understated their customers’ tax liabilities or overstated their customers’ entitlement to a tax refund.  The injunction also prohibits Lopez, Pamela Miranda and Jorge Miranda from acting as federal tax preparers, owning or operating tax preparation businesses and employing tax preparers.  The defendants agreed to entry of the injunction, but did not admit the allegations in the complaint.

The abortive IRS preparer program had an ethics component. I’m sure that this would never have happened if the barred preparers had attended a one-hour ethics CPE course.

They were successful, until now:

According to the complaint, Servicios Latinos operated out of approximately 84 stores in as many as 30 states, with locations including Kennet Square, Pennsylvania; Kansas City, Missouri; and Las Vegas, Nevada. 

They probably had many clients who were delighted at the big refunds that the stodgy preparers down the street were too timid to claim. The press release says the now-closed firm’s alleged stock in trade included phony child tax credits and earned income tax credits. Sometimes a big refund can turn out to be expensive. Now their satisfied clients can look forward to their “Dear Taxpayer” letters.

This shows that the government has powerful tools to shut down bad actors. Regulation would not improve the conduct of good preparers, but it would saddle them with useless expense and paperwork. It’s just another form of occupational licensing, this time to the benefit of the national tax prep franchise outfits.

 

RMceowenPaul Neiffer, Welcome Aboard Roger McEowen:

Roger just recently left the Center For Agricultural Law and Taxation (CALT) at Iowa State University and I am pleased to let everyone know that he has agreed to join CliftonLarsonAllen as a tax director for our Agribusiness and Cooperative group.  He will be based out of Des Moines and will continue to do his normal seminars around the country and provide additional advice for our clients on income and estate tax and succession planning (along with other advice).

Roger recruited me as a speaker for the CALT Farm Tax Schools for the past several years. Congratulations, Roger, on your move to the private sector!

 

186 companies get refunds under Iowa R&D tax credit (Des Moines Register):

Critics of the program have questioned why so few companies claim such a large part of the tax credits. They’ve also questioned why the state is providing companies with money when it faces tight budgets.

Supporters of the research activities tax credit, however, have said the tax credit helps the businesses decide where to locate and where to conduct their research. Providing the tax credit helps spur investment in Iowa, some have said.

People who get free money always have good reasons why it should keep coming.

Related: What Iowa considers more important than Sec. 179. 

 

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Jason Dinesen. Glossary: Form 8332. “Form 8332 is a tax form signed by a custodial parent to release their claim to a dependency exemption for a child and give it to the non-custodial parent.” It’s a wonderful way to enable parents to continue fighting long after the divorce is final.

TaxGrrrl, Understanding Your Tax Forms 2016: Form 1099-INT, Interest Income. “The ‘FATCA filing requirement’ box is ticked if the information reported on this form is required by rule or statute to comply with the Foreign Account Tax Compliance Act (FATCA). If this box is checked, you may have your own FATCA related reporting requirements, including the filing of a Report of Foreign Bank and Financial Accounts (FBAR).”

Russ Fox, Board of Equalization Excoriated for Ignoring the Law and Binding Precedents, “This is just another reason why the business climate in California is so dreadful.”

Kay Bell, Louisiana budget gap could shut down LSU football. The most important function of the state university system, apparently.

Jack Townsend, The Revenue Rule: Is It Relevant Any More? Should It Be? “Historically, the ‘Revenue Rule’ has been a barrier to one country seeking to collect taxes in another country.”

Keith Fogg, Why is the IRS Collecting Taxes for Denmark? ({rocedurally Taxing)

Peter Reilly, How Valid Is Tax Foundation Dynamic Scoring? It’s all modeling, which is always questionable. Still, taxes do matter. The same people who insist 70% tax rates won’t be ruinous insist soda taxes affect behavior. They’re half right that way.

Robert Wood, Kim Kardashian + Kanye West File Taxes Separately. Maybe You Should Too. If I were married to Kim Kardashian, I absolutely would.

 

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Ajay Gupta, Justice Scalia’s Tax Law Jurisprudence—Just as Acerbic and Prophetic (Tax Analysts Blog). “In cases involving the interpretation of federal tax statutes, Scalia brought to bear his general disdain of legislative history.” And he was not a friend of commerce clause challenges to state taxes.

Michael Schuyler, What Would The Administration’s $10 Oil Tax Do To The Economy And Federal Revenue? (Tax Policy Blog). It would go into, among other things, “high-speed rail.

Howard Gleckman, Cruz’s Flat Tax + VAT Would Cut Revenues By $8.6 Trillion. If only there were a candidate with a plan that would improve the tax system and not increase the deficit

TaxProf, The IRS Scandal, Day 1014

Tax Justice Blog, Tax Justice Digest: Voodoo Economics — Corporate Tax Watch — Social Contract. Check out what the left side of the tax conversation is up to. Oddly, the words “social contract” don’t show up in the post. Maybe because I never signed it?

 

News from the Profession. Would an Accountant Ever Fall for a Phony IRS Call? “And if a CPA did get duped, it’s not like he or she could tell anyone about it. If they did, they’d literally die from the embarrassment.”

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Tax Roundup, 2/4/16. Confirmed: Governor opposes coupling to ALL 2015 changes. And: Are hipsters really flocking downtown?

Thursday, February 4th, 2016 by Joe Kristan

coupling20160129Worst Iowa tax policy decision ever. Governor Branstad doesn’t want to conform Iowa’s tax law to any of the extender provisions passed in December for 2015. A reliable source has confirmed our earlier report that the Governor wants to skip coupling entirely for 2015, and then conform to everything except Section 179 and bonus depreciation in 2016 and beyond.

It’s bad enough that he doesn’t want to conform with the $500,000 federal Section 179 for the first time in years — imposing a big tax increase on small businesses and farmers in every county. But conforming to nothing means a whole host of separate Iowa computations for 2015 returns — and 2015 only. Without spending a lot of time, I come up with these:

Exclusion for IRA contributions to charity
Exclusion of gain from qualified small business stock
Basis adjustment for S corporation charitable contributions
Built-in gain tax five-year recognition period
Educator expense deduction
Exclusion of home mortgage debt forgiveness
Qualified tuition deduction
Conservation easement deductions
Deduction for food inventory contributions

I have asked the Department of Revenue for a complete list of affected provisions, and I will provide it if they send one.

These will have effects on thousands of taxpayers ranging from minor annoyance and more expensive tax compliance to major unexpected Iowa tax expense. To take a common example, the exclusion fo IRA contributions to charity allows taxpayers aged 70 1/2 or older to have their IRAs make contributions to charity directly. This means the contributions bypass their federal 1040s altogether. But for Iowa, the Governor would have the IRA holder include the contribution in taxable income and then, presumably, add it to their itemized deductions — if the taxpayer itemizes in the first place.

Some of these can be very costly. For example, the exclusion of gain for qualifying C corporation stock sales can apply to up to $10 million of capital gain. The exclusion benefits start-up businesses, which Iowa allegedly supports with at least four separate tax credits. Failure to couple would clobber a $10 million 2015 gain with an unexpected $898,000 tax bill.

There is bipartisan support for coupling with all federal provisions other than bonus depreciation for 2015. The Iowa House of Representatives has already passed such a bill on a bipartisan 82-14 vote. But Governor Branstad and Senate Majority Leader Gronstal have apparently reached a little bipartisan deal of their own to keep the Senate from ever voting on 2015 conformity. The Senate tax committee meeting yesterday was cancelled, which I hope means the Senate leadership is getting pressure to back off this stupid policy.

If you are affected, or if your clients are (they are), I encourage you to let your Iowa Senator know how you feel.

Related Coverage:

Iowa House passes $500,000 Section 179, but prospects bleak in Senate.

Iowa Governor reportedly opposes 2015 coupling for anything.

Branstad budget omits $500,000 Section 179 deduction for Iowa; no 2015 conformity.

 

20130218-1What do you mean, IBM doesn’t stock the vacuum tubes anymore? IRS Systems Outage Shuts Down Tax Processing (Accounting Today):

The Internal Revenue Service said Wednesday evening its tax-processing systems have suffered a hardware failure and that tax processing could be affected into Thursday.

“The IRS experienced a hardware failure this afternoon affecting a number of tax processing systems, which are currently unavailable,” said the IRS. “Several of our systems are not currently operating, including our modernized e-file system and a number of other related systems. The IRS is currently in the process of making repairs and working to restore normal operations as soon as possible. We anticipate some of the systems will remain unavailable until tomorrow.”

The IRS says it’s confident that it will have the system restored by the weekend and that any refund delays will be minor.

Related: IRS Having One of Those Days (Caleb Newquist, Going Concern); TaxGrrrl, IRS Website Hit With Hardware Failure, Some Refund & Payment Tools Unavailable.

 

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Jason Dinesen, The Iowa Trust Fund Tax Credit is $0 for 2015

Robert Wood, Perfectly Legal Tax Write-off? Lawyer Fees — Even $1,200 An Hour

Russ Fox, A Tale of Three States. “Hawaii, Indiana, and Mississippi are three states where daily fantasy sports (DFS) is being debated. The three states are representative of what is likely to occur in every state.”

Keith Fogg, Verification of Bankruptcy Action in a Collection Due Process Case (Procedurally Taxing). “Because Appeals employees often have very little knowledge of bankruptcy, this case points out the need to pay careful attention in CDP cases that follow bankruptcy actions and challenge verifications where the Appeals employee fails to acknowledge the impact of the bankruptcy case.”

Bob Vineyard, Aetna Not Pulling Plug on Obamacare …. Yet (InsureBlog). Many Iowans get coverage through Aetna’s Coventry unit. But as the company expects to lose $1 billion over two years on Exchange policies, their willingness to continue to provide ACA – compliant policies on the exchange will be sorely tried.

Jack Townsend, Another Taxpayer Guilty Plea for Offshore Account Misbehavior

Peter Reilly, Tax Dependency Exemptions For Noncustodial Parents – It Is All About Form 8332. It really is. Form 8332 provides a way for couples to continue fighting long after the divorce is final.

Jim Maule, “Can a Clone Qualify as a Qualifying Child or Qualifying Relative?”

 

Scott Greenberg, The Tax Benefits of Having an Additional Child (Tax Policy Blog). In case your decision hinges on this.

Renu Zaretsky, Debates, Energy, Credits and PrepToday’s TaxVox roundup covers tonight’s Democratic Debate, energy tax policy, and a shutdown of 26 Liberty Tax franchise operations in Maryland.

TaxProf, The IRS Scandal, Day 1,001

 

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Is Hip, Cool Des Moines Really Attracting Migrants? (Lyman Stone). I haven’t seen any local media pick this up, but this is a fascinating look at migration and population patterns Downtown and across Polk County. It is inspired by the recent Politico piece on how hip and all we are (emphasis in original):

In fact, throughout the article, there’s an interesting claim made that the population of downtown Des Moines has risen from 1,000 at some unspecified time in the 1990s, to at least over 10,000 as of 2016. In fact, throughout the article, there’s an interesting claim made that the population of downtown Des Moines has risen from 1,000 at some unspecified time in the 1990s, to at least over 10,000 as of 2016.

The claim turns out to be exaggerated, but only a little:

Downtown Des Moines probably did not gain 10,000 residents from the late 1990s to 2016, nor does it seem likely that it had just 1,000 residents at any time in the last few decades. However, that doesn’t mean the essential claims of Woodard’s story are wrong. Au contraire, Des Moines has gained about 10,000 people since 2000, and has about 9,000 more people than we would expect had 1987 growth rates continued. That’s a meaningful acceleration in urban growth, and a significant number have been headed to the very center of the city.

It’s a great read with some surprising observations about how suburban and downtown growth complement each other.

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Tax Roundup, 1/12/16: IRS wants to shoot more jaywalkers. And: the benefits of IRS ethics training.

Tuesday, January 12th, 2016 by Joe Kristan

20120912-1They think it’s expensive because it is. Tax Analysts reports ($link) on a speech given by an IRS international tax deputy commissioner that shows how little the IRS cares about wreaking havoc on the lives of taxpayers who inadvertently fail to comply with the weird and obscure foreign account reporting rules. The talk by David Horton shows that the IRS continues to assume anybody who has failed to file FBAR forms is a bad actor. For example:

The IRS’s 2014 OVDP (Offshore Voluntary Disclosure Program) guidance provides transitional rules for non-willful taxpayers who entered the OVDP earlier, but could have been eligible for the streamlined program. [Robert] Panoff wondered why they were incurring lower penalties than similarly situated taxpayers who completed the OVDP. 

Horton explained that these taxpayers are still in the OVDP, so they will get criminal clearance and a closing agreement, while streamlined participants get neither. Criminal clearance and a closing agreement are worth paying for, the thinking goes. A streamlined participant could later get a notice of deficiency for penalties that are assessed as taxes.

So a non-willful failure to file still benefits from “criminal clearance?” That’s a funny thing to need for a non-willful violation, and it shows an “it’s all criminal” mindset. Shoot all the jaywalkers!

The article has this:

Every practitioner hopes to shoehorn his offshore-account-holder clients into the streamlined program. Indeed, the only taxpayers who don’t welcome the streamlined program are recent immigrants who think that 5 percent of a home-country bank balance is a stiff price to pay for a green card.

That’s because it is ridiculously expensive.

Nowhere in the piece is any evidence that they (or the author) are aware that accidental Americans and compliant taxpayers can be financially ruined for failing to meet a requirement unknown to 95% of the populace. There’s certainly no awareness of the fundamental injustice of hitting taxpayers with 5-figure fines for committing personal finance abroad without an FBAR.

There is a crying need for foreign financial reporting reform. Two good first steps:

  1. Increase the FBAR foreign account thresholds to the amounts that apply for reporting foreign financial assets on Form 8938. These don’t begin to apply until the assets exceed $50,000, or $200,000 for taxpayers abroad. Using this threshold for foreign financial account filing would eliminate the vast majority of filings, leaving them only for taxpayers who actually have enough income to justify the hassle.
  2. Provide an automatic and penalty-free option to enable taxpayers to come in out of the cold, as long as they file before they are contacted by the IRS and any unreported tax required is relatively small. This would work much like the programs states have for businesses who want to come into compliance. The states benefit from getting the taxpayers in the system, and the taxpayers get in from the cold without financial ruin.

Unfortunately, the IRS apparently wants to go the other way: “Horton reported that while the IRS is still getting a steady flow of offshore voluntary disclosure program filings every month, that program has to end eventually.” Then it will be a choice to either stay out of compliance and risk financial disaster, or come into compliance and guarantee it.

 

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But preparer regulation will help prevent preparer fraud! From a U.S. Attorney press release:

Yolanda Castro, 48, an employee of the U.S. Internal Revenue Service in Fresno, pleaded guilty today to aiding and assisting in the preparation of a false tax return, United States Attorney Benjamin B. Wagner announced.

According to court documents, Castro was employed by the IRS for approximately 20 years, including as a tax examiner and contact representative. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. For instance, on her own 2008 tax return, Castro claimed a credit for education expenses that she did not incur, and provided the IRS phony textbook receipts to support the claim. Likewise, in tax returns she prepared for herself and others, Castro claimed child care expenses that had not been incurred.

Surely some ethics continuing education would have saved her.

 

Robert D. Flach has a little Buzz for your Tuesday. “Not much BUZZ today – but, as I always say, some BUZZ is better than no BUZZ.”

Russ Fox reminds us that it’s 1099 Time for 2016. “The best way to check whether or not you need to send a 1099 to a vendor is to know this before you pay a vendor’s invoice.”

William Perez, What You Need to Know about Reporting Payments Using Form 1099-MISC

TaxGrrrl, No, You Can’t Actually File Your Tax Return Early (And More Info About Tax Refunds). “Some tax preparers are suggesting in ads and on social media that they can somehow help you skip the line and get you a refund before anyone else. Don’t be fooled.”

Robert Wood, 12 Surprising Items IRS Says You Must Report On Your Taxes. You won’t believe number 2!

Jason Dinesen, Glossary: Social Security Wage Base. “The term Social Security Wage Base refers to the maximum amount of wages or self-employment income on which the 6.2% Social Security tax is based.”

Paul Neiffer, Relief for Older Farmers with IRAs. And not just farmers.

 

Keith Fogg, Improving Payroll Tax Compliance (Procedurally Taxing). “From my perspective working on these cases within the IRS, the failure of employers to pay over the collected taxes usually resulted from poor cash management.”

Renu Zaretsky, New Taxes, Excess Profits, and a Windfall. Lots of cynical posturing by desperate politicians in today’s TaxVox headline roundup.

 


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TaxProf, The IRS Scandal, Day 978. The process of running out the clock continues.

Scott Greenberg, Which Tax Extenders are Left? (Tax Policy Blog):

Looking over the list below of remaining tax extenders, none of them seem like “must-pass” policies. As a result, the pressure is off of Congress to renew all of the tax extenders as a package. Instead, Congress should take the time to evaluate the remaining tax extenders one by one, making the good provisions permanent and letting the bad ones expire. Temporary tax policy is bad tax policy, and it’s about time that Congress laid the ritual of tax extenders to rest once and for all.

Let’s hope so.

 

The Critical Question. Would a cuddly mascot make the IRS lovable? (Kay Bell). That would look like a stuffed Cthulhu

The Critical Question II: Accounting Firms Allowing Side Gigs: Good Idea or Independence Mine Field? (Caleb Newquist, Going Concern).

 

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Tax Roundup, 12/4/15: Keeping inmates busy, Keeping CPAs fit.

Friday, December 4th, 2015 by Joe Kristan

20150916-3It’s important that our inmates feel they have a purpose. A few years ago Edward Hugh Okun was sentenced to 100 years in federal prison after being convicted on charges of buying and looting Section 1031 exchange intermediaries, stealing $126 million earmarked to close tax-free swaps, spending it on yachts and other rich-man toys.

Mr. Okun apparently tried to make the best of his situation. Tax Analysts reports ($link) that David Chityal, a Canadian national, has pleaded guilty to helping Mr. Okun divert $2.3 million in tax refunds from a fund set up to pay restitution to Mr. Okun’s fraud victims. From the report:

Following Chityal’s release in March 2010 and his deportation to Canada, the men maintained regular contact and developed plans to obtain $2.3 million in tax refunds intended for the bankruptcy estate handling Okun’s businesses. The indictment said the two men planned to put $500,000 of the tax refunds toward hiring a specific “prestigious New York lawyer” to handle Okun’s appeal and use the remainder for personal enrichment.

Chityal hired a Canadian lawyer to complete a process to grab the tax refund checks, travel to the Beaumont prison to have Okun endorse the checks, and then fly to the Turks and Caicos Islands to deposit the checks in a trust controlled by Okun. However, an attorney for the bankruptcy estate discovered the scheme, tracked the Canadian lawyer to the islands, and had the checks sent back to the United States hours before they were to be deposited.

The Bureau of Prisons inmate locator says Mr. Okun has a projected release date of April 30, 2095. This sort of thing could roll that back a bit.

Related:

A 10-year sentence is plenty, assuming fire ants are involved

WHEN A LIKE-KIND EXCHANGE IS TOO TAX FREE

Department of Justice Press release

 

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Kyle Pomerleau, Deficit Worries Over a Permanent Extenders Package? (Tax Policy Blog). The post addresses the lie underlying the nature of “temporary tax breaks”:

The extenders are a perfect example of what the current law baseline can miss. Under current law, extenders have already expired. So current law estimates assume that the federal government will collect revenue as if the extenders are no longer there.

However, this does not reflect our recent experiences with the extenders. Every year, for the past several years, Congress has retroactively extended the extenders and reduced actual revenues that the CBO believes the Treasury will collect. And there is no reason to believe that this would not keep happening. However, CBO’s current law baseline will still assume that the government will collect revenue over the next decade as if the extenders didn’t exist. In other words, the CBO current law baseline likely overstates the amount of revenue that the federal government will actually collect over the next decade.

Any “temporary” tax break that is extended once should be considered permanent for budget purposes. Maybe we should even remove the four words of the preceding sentence starting with “that.”

 

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It’s Friday! Get ready for your weekend with fresh Buzz from Robert D. Flach. Today’s roundup from Robert runs from musical theater to fraudulent earned income tax credit claims.

Speaking of musical theater, I have a son playing bass in the house band for a run of Ain’t Misbehaving in Chicago right now. Go if you can, because it’s a great show and because I want to stay in a nice nursing home someday.

Robert Wood, When Foreign Banks Ask For U.S. Taxpayer ID, How Should You Respond? “FATCA letters are everywhere, and foreign banks want you to certify that you’re complaint with the IRS.”

Jim Maule, Rubbing Tax Penalty Salt Into the Tax Liability Wound:

There are two lessons here. First, if using a preparer, be certain to provide the preparer with all necessary information, even if that means providing the preparer with more information than is needed. It is better to over-include than to under-include. Second, review the return.

A preparer signature isn’t a magic charm that makes any tax problems go away.

Keith Fogg, Who Can/Must Sign the Power of Attorney Form (Procedurally Taxing)

Jack Townsend, IRS Use of Cell-Site Simulators (Also called Stingray) to Retrieve Information About and From Cell Phones

Me, Estimated tax payments: who needs to file quarterly. My new post at IowaBiz.com, the Des Moines Business Record’s Business Professionals’ Blog.

 

Howard Gleckman, The Highway Bill Takes Congress on a FAST Track to More Debt (TaxVox). Fiscal gimmickry lives.

TaxProf, The IRS Scandal, Day 938. Today’s post links to a voice for the “no scandal here” crowd.

They lack a lot more than that. Illinois Needs Budget, but Leaders Lack Urgency (Sebastian Johnson, Tax Justice Blog).

 

News from the Profession. Here Are Some Health Iniatives Accounting Firms Should Consider for the Upcoming Busy Season (Leona May, Going Concern). I’m not sure “treadmill desks” send the right message.

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Tax Roundup, 11/6/15: Time to invade rural Iowa! And: IRS backs off valuation discount limits.

Friday, November 6th, 2015 by Joe Kristan

Tax School Rampage! In the pre-dawn hours Monday I will rendezvous with Roger McEowen, Director of the Iowa State University Center for Agricultural Law and Taxation, for the drive to Waterloo and the first 2015 session of the Iowa Farm and Urban Tax Schools. We will rampage through four Iowa towns this week. The complete schedule:

Nov. 9-10 – Waterloo
Nov. 10-11 – Sheldon
Nov. 11-12 – Red Oak
Nov. 12-13 – Ottumwa
Nov. 16-17 – Mason City
Nov. 23-24 – Maquoketa
Dec. 7-8 – Denison
Dec. 14-15 – Ames

For those of you unfortunate enough to not be in Iowa, or who prefer to study from the comfort of your computer, the Ames session is also available in a live webinar.

I am on the Day 1 schedule for all eight sessions, along with Roger and Kristy Maitre, the former Iowa IRS stakeholder liaison. There are two Day 2 teams. Waterloo, Mason City, Maquoketa and Denison get Dave Bibler, Jim Goodman, and Daniel Fretheim. Sheldon, Red Oak, Ottumwa and Ames get Dave Repp and Paul Neiffer of FarmCPA Today blog fame.

We have lots to cover this year. Details of topics here, and registration information here. Say you heard about it at the Tax Update Blog and get free coffee at any session!

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Valuation power grab inoperative. Tax Analysts reports that Treasury officials have disavowed any intention of using forthcoming regulations to crack down on valuation discounts in estate planning. From the Tax Analysts report ($link):

Coming regulations on estate valuation for interests held by family members will follow not the Obama administration’s prior budget proposals, but the statute, an IRS official said November 4, signaling a welcome about-face for practitioners from earlier comments made by Treasury officials.

“There seems to be some confusion as to exactly what the guidance will rely on,” Finlow said. “We are looking to the statute as it is now. . . . We are not looking at the green book,” she said, referring to Treasury’s green book explanation of the president’s proposal on valuation discounts in his fiscal 2013 budget plan.

How do such crazy rumors get started?

In May Catherine Hughes, attorney-adviser, Treasury Office of Tax Legislative Counsel, said practitioners should look to that fiscal 2013 proposal for hints on what would be in store in the regs. The Obama administration asked Congress to amend section 2704(b) to disregard some provisions, such as some transfer and liquidation restrictions, in the valuation of intrafamily transfers of interests in family entities.

This would take the urgency out of some gift tax planning that is going on in anticipation of a crackdown on discounts for minority interests that seemed to be telegraphed by the Hughes comments.

 

buzz20150804Friday is a good day for so many reasons. Not least of which is that it’s the day Robert D. Flach posts his Friday Buzz roundup. Today his links included his year-end planning guide and bad news about the level of IRS service we can look forward to this coming filing season.

 

Robert Wood, Surgeon Hid Money In Divorce, Is Convicted Of Tax Evasion, Faces Up To 95 Years Prison:

He left the country without telling friends, family or his workplace, and secretly drove to Costa Rica He opened two bank accounts there, depositing more than $350,000 in cash. He also hid a thousand ounces of gold in a Costa Rican safe deposit box. Crossing into Panama, he opened another account there under the name of a sham corporation, Dakota Investments. By 2008, he had moved $4.6 million into that account.

He was hiding the money from an estranged wife and the IRS. With the benefit of hindsight he may wish he had instead invested in good divorce and tax counsel.

 

Roger Russell, Taxes in the Sharing Economy (Accounting Today). Includes a discussion of local lodging taxes for AirBNB renters.

William Perez explains Itemized Tax Deductions.

Kay Bell, New Ways and Means chairman Rep. Kevin Brady wants to move tax extenders ‘sooner rather than later’. “Like House Speaker Paul D. Ryan before him, Brady favors making the tax extenders permanent pieces of legislation.”

Paul Neiffer, Does 7 Equal 5? “For most farmers, Section 179 (at the $500,000 level) is much more important than a five-year life for equipment depreciation.”

Keith Fogg, How Does Indexing Federal Tax Lien Impact Its Effectiveness (Procedurally Taxing). “The purchasers in this case did not realize they were purchasing property encumbered by a federal tax lien because the title search did not turn up a lien against a prior owner.”

TaxGrrrl, IRS Announces Lower Fees For 2016 As PTIN Registration Opens

 

harvest

 

TaxProf, The IRS Scandal, Day 911. Today’s link discusses the scandal’s context in the larger effort of “campaign finance reform” advocates to silence their opposition by government power.

Richard Auxier, 2015 Ballot Measure Results: Tax cuts, yes; marijuana, sometimes (TaxVox).

Career Corner. CPA Exam Score Release Anxiety Is the Best Anxiety (Caleb Newquist, Going Concern).

 

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