Federal Tax Update Podcast

This week we look at:

• §199A final regulations – a pre-tax season package that had to be quickly understood
• 2019’s year end tax bills – comes in three parts, along with a good portion of the government’s full appropriations package
• The IRS’s fascination with tax basis capital, and the profession’s reaction to the same
• §199A FAQ – so we’ll have fewer sub-regulatory guidance items, but that doesn’t mean it all gets reviewed like regulations. Or, perhaps, be careful what you wish for…
• States looking to extend their tax reach, but in a case with limited application SCOTUS did find there are some limits
• Additional items beyond the top five…

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of December 23, 2019: A Tax Bill for the Holidays

• Further Consolidated Appropriations Act, 2020 signed into law on December 20, 2019
  • SECURE Act
    • The good: Delay in required beginning date for plan distributions, later plan adoption date, etc.
    • The bad: Death of the stretch IRA
  • Extenders apply retroactively - so there are some amended returns that will be needed
  • Tax-exempt version of the parking lot tax is gone, but the for profit version is still around

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of December 16, 2019: The Sound of Silence

• IRS does not have the discretion to waive repayment of advance premium credit
• Employer who reimburses employee when transit card fails to function has to include amount in wages per CCA
• IRS issues more proposed regulations on state tax issues and charitable contributions, but remains silent on passthrough tax issues
• IRS grants relief from use of tax basis capital account on partnership K-1s for one year

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of December 9, 2019: Bring in the Forms

• Final version of 2020 Form W-4 released Final versions of 2019 Forms 1040, 1040-SR, Schedules 2 and 3 released
• Shortly thereafter, final version of Schedule 1 released still containing question about virtual currency
• Relief for provision of Forms 1095-B and C
• Detailed guidance issued for IRS agents on BBA audit procedures

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Current Federal Tax Developments for the week of December 2, 2019: Horses and Hobbies

• Commissioner rules that insurance payments for pyrrohite damage does not require Forms 1099
• Horse business found not to be a hobby, losses allowed
• IRS updates per diem rules for TCJA, following similar update for auto mileage rules

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of December 2, 2019: Horses and Hobbies

• Commissioner rules that insurance payments for pyrrohite damage does not require Forms 1099
• Horse business found not to be a hobby, losses allowed
• IRS updates per diem rules for TCJA, following similar update for auto mileage rules

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of November 25, 2019: Back to the FAQ

• IRS discusses information security responsibilities and risks for tax professionals
• Rental section added to IRS’s §199A FAQ page on website
• Final regulations issued on anti-clawback estate/gift tax provisions
• Only one penalty applied to taxpayer that was both the owner and beneficiary of a foreign trust

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of November 18, 2019: Upcoming Features

• Significant TCJA guidance to be issued by end of January 2020
• PLR allows advisory fees to be paid out of an annuity without trigger taxable income to owner
• IRS announces enforcement program for syndicated conservation easement programs
• IRS updates auto mileage rulings for changes made by TCJA
• IRS found to have attempted to assess tax on Son of BOSS after all statutes had expired

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Current Federal Tax Developments for the week of November 11, 2019: Indexing Week

• Federal Circuit shoots down previously successful taxpayer argument that limited maximum FBAR penalty
• IRS publishes the 2020 inflation adjusted numbers
• Proposed regulations issued to revise the life expectancy tables for required minimum distributions
• Retirement plan numbers for 2020 issued by IRS

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of November 4, 2019 Both a Home and an Investment

• Wisconsin fails in attempt to look to sublease to tax software sales based on computers sold to be used in the state

• IRS agrees that taxpayer qualifies for both §121 and §1031 for the sale of a former home destroyed by fire

• Draft Form 1065 and K-1 instructions released by the IRS

Copyright 2019 Kaplan, Inc.

This week we look at the following:

• California rules on tax issues for directors that have meeting in California

• Chief Counsel’s office gives guidance on use of secured email exchanges

• §280E found not to represent an excessive fine even if the Tax Court doesn’t completely agree on why

• Interim guidance issued to Appeals employees on BBA partnership regime

• Whistleblower cannot force IRS to reopen an audit that he claimed was woefully inadequate

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of October 21, 2019: The Details are in Forms (and Instructions)

• Agents directed to grant relief in certain WOTC situations
• Form 1120-S instructions disclose 3 new statements to be required on K-1s for 2019
• Social security inflation adjusted 2019 numbers officially released
• Second draft of Form 1065 Schedule K-1 asks for additional information about disregarded entity partners
• TAS’s request for a delay while taxpayers facing loss of passport seek assistance denied by IRS

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of October 7, 2019: Virtual Currency and Taxes

• IRS expands IP PIN program to 10 more states

• Question on virtual currency transactions will be on Schedule 1, Form 1040 and 1040SR, along with release of more draft instructions

• Hard forks of virtual currencies are taxable events per IRS and the rule appears to apply retroactively

• Additional set of FAQs added for taxation of virtual currencies to IRS website

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of October 7, 2019

• Pennsylvania cites Wayfair in providing for sales only based income tax nexus
• Taxes on investment real estate under IRC §164 - no $10,000 limit?
• Drafts of 2019 Forms 1065, 1120-S and related K-1s released by IRS
• Proposed regulations for ALEs using individual coverage HRAs released

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of September 30, 2019: Rentals and the Safe Harbor

• IRS releases final version of §199A rental safe harbor
• Special per diem rates that take effect on October 1, 2019 released
• Tax Court does not accept imprisonment and lack of access to what might be deductible expense documentation as reasonable cause for late filing.

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of September 23, 2019: Zombie Power of Attorney

• IRS releases final and new proposed regulations on §168(k) bonus depreciation
• Settlement offer to be sent to 200 taxpayers under exam for microcaptive structures
• Government shutdown causes IRS to lose ability to extend statute taxpayer had already agreed to extend
• Power of attorney not used by son nevertheless left him authorized to act for father, barring claim for extended statute
• CPA ordered to turn over tax returns of client based on two factor test

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Current Federal Tax Developments for the week of September 16, 2019: §451 Week

• Students learns real life lesson on taxation of prizes, and we get a tax history lesson
• Proposed regulations issued for advance payments under TCJA §451(c)
• Proposed regulations issued for §451(b) revenue conformity added by TCJA

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of September 9, 2019: But I Promise, Really!

• IRS release instructions to 2019 §199A simple deduction form with additional informal guidance
• Memorandum discusses what does and does not qualify as having made a payment to a retirement plan
• Relief granted to file the second copy of the Form 3115 late for an automatic method change, but at a cost
• Activities failed to count as rentals, could not be combined into rental activity by real estate professional
• A flawed S election uncovered during due diligence for sale of the corporation

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of September 3, 2019: No Horse, No Business

• Tax Court finds that taxpayer did not have a trade or business of raising/showing horses since she didn’t have a horse
• Tax Court rejects IRS’s “step in the shoes” theory for gifted partnership interest with interest from debt-financed distribution received by donor
• IRS accepts court’s revision of IRA beneficiary, surviving spouse allowed to treat IRA as her own
• Coffeehouse was not a §501(c)(3) charitable organization
• Notice of deficiency sent to addresses used on returns found to be sent to last known address

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of August 26, 2019: Watching Paint Dry Doesn’t Count

• Taxpayer found both to have chosen the accrual method and to be required to use it as well
• §451 proposed regulations exit OIRA review
• Taxpayers records found to overstate hours by 150 hours, not qualified as a real estate professional
• IRS issues formal memo changing position on ability to claim foreign tax credit on certain French taxes

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of August 19, 2019: George M Would Be Proud...

• Taxpayer “wins” on a Cohan style case, but things don’t really go well

• Qualified plan distribution is part of taxable income for the taxpayer even if the taxpayer doesn’t cash the check

• An estate cannot avail itself of the economic disability tolling of the statute of limitations (and it wouldn’t have mattered anyway).

• IRS to send out estimated tax penalty refund checks to 400,000 taxpayers

Copyright 2019 Kaplan, Inc.

This week we look at:

• Kansas releases out of state seller rules that have no de minimis levels
• Memorandum holds that partial denial of earned income tax credit can lead to loss of all credit for following two years
• Tennessee court finds that Boyle rule still applies, taxpayer cannot rely on preparer to efile extension
• New online tax withholding estimator released by IRS, second revised Form W-4 follows shortly after
• Revised third-party contact rules released prior to Taxpayer First Rule change that takes effect August 15, 2019

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of August 5, 2019: About that Bitcoin...

• IRS sends out 10,000 letters on cryptocurrency, including some demanding a response
• Relief granted on three bonus depreciation elections for year that includes September 28, 2017
• Draft Schedule K-1 for Form 1120S revised to change §199A information reporting
• Letter ruling holds a partial deduction allowed for DNA tests requested by an individual
• Organization not operated exclusively for charitable purpose, §501(c)(3) status revoked retroactively
  
  

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of July 29, 2019: 1982 Tax Form Nostalgia

• IRS releases final regulations on §501(c)(4) notice
• Taxpayers who paid certain French taxes may have refund opportunities
• Six new compliance initiatives announced by IRS
• Minor relief granted to file superseding returns to some CPAR covered partnerships
• IRS releases a new draft version of Form 1099-NEC for the first time in 38 years

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of July 22, 2019: The Short-Lived 1040 Postcard

• Taxpayer who failed to file a signed Form 8332 with his return was denied the dependency exemption even though he eventually got a signed form
• IRS updates list of allowed preventive care for high deductible health plans
• IRS debuts new Form 1040-SR and revises Form 1040 to get rid of the postcard on draft 2019 forms the agency released

Copyright 2019 Kaplan, Inc.

This week we look at:

• Taxes-Security-Together Checklist for tax professionals issued by the IRS

• Tax Court found that taxpayer was victim of a bookkeeping error and had sent IRA rollover contribution to custodian, late rollover allowed

• IRS discovers 31 years after the fact that a typo fix never was picked up in the Code of Federal Regulations

• Frequently asked questions page issued to explain TCJA change to §704(d) partner basis limits on charitable deductions and foreign taxes

Copyright 2019, Kaplan, Inc.

Update for the week of July 8, 2019. This week we look at:

• The Taxpayer First Act of 2019, signed into law on July 1, 2019

• The Supreme Court decides one trust due process case is enough for a single term

• IRS proposed a change in MEP to allow a solution to the one bad apple problem

• IRS goes back to issuing guidance via website FAQs, this time for QOFs

• Employers will be able to truncate SSNs on W-2s given to employees--but not right away

• IRS finalizes regulations barring partnerships from using disregarded entities to put partners on the payroll

Copyright 2019 Kaplan Professional Education

Current Federal Tax Developments for the week of July 1, 2019:

• IRS issues notice to advisers regarding what to do in the event of a data breach
• IRS official confirms a §199A trade or business can include both commercial and residential rental
• Taxpayer found Tax Court didn't believe his vehicle logs
• Transaction found to be substantially similar to a listed transaction

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of June 24, 2019: SCOTUS Just Says No

• Proposed regulations issued on qualified agricultural cooperatives

• US Supreme Court rules mere residence of beneficiary not enough to all state to tax entire income of trust

• Taxpayer had a proper claim of right situation when she paid ½ of wages paid back by ex-spouse

• IRS finalizes non-resident alien ESBT regulations

Copyright 2019, Kaplan, Inc.

This week we look at:

• IRS to stop faxing transcripts, only mail them to taxpayer’s address of record

• Final regulations issued for state tax credit donations and new way to report credit as tax paid

• IRS finalizes regulations creating two new HRAs

Copyright 2019, Kaplan, Inc.

This week we look at

• S corporation status lost when SMLLC shareholder adds a new interest holder

• Tax Court does not accept author’s attempt to treat a portion of her income as not self-employment income

• IRS releases employer tables and worksheets for TCJA-aware draft Form W-4

• TIGTA finds that LB&I imposes accuracy-related penalties at lower rate than does SE/SE

• Envelope used to file Tax Court petition lacked postmark, taxpayer could not explain delivery much later than would be expected for timely mailed document

This week we look at

• Evangelizing did not give rise to charitable deduction for most expenses

• DC Circuit agrees with Tax Court that failure to disclose basis of asset doomed $33 million contribution

• Taxpayers lose nearly $1 million of basis due to lack of old documents

• IRS tries one more time to develop a W-4 for the TCJA era

Copyright 2019, Kaplan, Inc.

This week we look at:

• Virtual currency guidance promised by IRS Commissioner

• HSA numbers for 2020 released by IRS

• Auto depreciation limits for 2019 released by IRS

• House passes retirement reform bill, would drastically cut back on the use of stretch IRAs

• Assistant US Attorney warns preparers about criminal exposure when they don’t raise enough issues about loans

Copyright 2019, Kaplan, Inc.

This week we look at:

• Review Wolters Kluwer IRS response and other issues

• IRS releases a new worksheet for computing tax when there are 25% or 28% gains

• Tax Court finds IRS did not have authority to find Medicare difficulty payments nontaxable in Notice 2014-7

• CA10 agrees with Tax Court that S corporation cannot accrue wages on participants

• Taxpayer materially participated in activity under facts and circumstances test

Copyright 2019, Kaplan, Inc.

This week we look at:

• Wolters Kluwer CCH systems suddenly taken offline due to malware issue

• GAO criticizes security of e-file providers and software developers

• IRS updates maximum vehicle values for cents-per-mile and FAVR

• IRS clarifies redemptions treated as dividends taxation when paid during post-termination transition period

• Deduction for Connecticut estate taxes must be reduced by portion allocable to state’s gift taxes added back paid in 3 prior years

• My boss ordered me to do it doesn’t work for trust fund penalty even when the boss is an agent of a federal agency

Current Federal Tax Developments for the week of May 6, 2019: Fragile: Handle with Care - S Corporations

• Taxpayer’s marriage forces repayment of advance PTC, unfairness is not a defense

• State tax refundable credit in excess of taxes is taxable income to taxpayer

• IRS expands determination letter to cover a limited number of existing plans

• LLC operating agreement adoption terminates S election

Copyright 2019, Kaplan, Inc.

This week we look at:

• Taxpayer finds expense can’t be assigned to business based on best result

• IRS greatly expands the FAQ on Section 199A, including a major surprise to many on handling S corporation shareholders

• IRS updates the EPCRS program to add more self-correction options

• Chief Counsel Email holds that using a PEO does not allow a partner to be treated as the employee of partnership

Copyright 2019, Kaplan, Inc.

This week we look at the following

• Draft forms issued to be used to report §199A deduction on 2019 returns

• Proposed regulations address NRA potential current beneficiaries of ESBTs that are also grantor trusts

• Memorandum address impact of §318 attribution rules on §1372 and self-employed health insurance deduction

• Second (and maybe final) set of proposed regulations on opportunity zone issues

• Ninth Circuit decides IRS regulations did remove the ability to use common law mailbox rule to prove timely filing

Copyright 2019, Kaplan, Inc.

This week we review where we stand on TCJA guidance at the end of the first TCJA tax season.

• §199A - Mainly Post-Final Regulation Issues
• §163(j) - Proposed Regulations Out, Awaiting Final Regulations
• Depreciation - Will the Retail Glitch Get Fixed? And When?
• SALT - Soon to be released final regulations on state tax credits and then what
• §461(j) - Limit on business losses - where’s the guidance
• Other areas

Copyright 2019, Kaplan, Inc.

Current Federal Tax Developments for the week of April 8, 2019: SALT and the Home Office

• IRS sends proposed regulations on §199A for cooperatives to OIRA for review

• PMTA outlines intereaction of home office and SALT cap

• Trade or business definition for instructions in Form 461 issue identified by IRS

• Second Circuit reverses Tax Court decision that found a tax “black hole”

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of April 1, 2019: Tax Benefit Rules and Refunds

• Electric vehicle credits for GM vehicles to begin one year phase out

• IRS gives formal guidance on treatment of state income tax refunds following the TCJA $10,000 cap

• SALT workaround regulations and related notice sent to OIRA

• IRS changes requirements to obtain EIN, requires responsible person to have SSN or ITIN

• Final regulations published on reportable transaction law modifications from 2010

Copyright 2019 Kaplan, Inc.

This week we look at:

• QBI and disallowed passive losses

• Minister’s housing allowance ruled to be acceptable under the U.S. Constitution

• Pilot had no profit motive for business related to vintage World War II aircraft

• IRS suspends two Revenue Rulings related to active trade or business issues under §355

• Relief from underpayment of estimated tax penalty expanded by IRS

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of March 18, 2019: Technicalities and Glitches

• Software glitches in the first years under TCJA

• Lump sum social security benefits are part of MAGI for the premium tax credit

• Safe harbor statements have to be signed and then attached to electronically filed returns as a PDF

• Taxpayer’s mistake in listing old address on tax return proves costly

• Tax Court rejects no harm, no foul view with regard to penalties for filing an S corporation return late

Copyright 2019 Kaplan, Inc.

This week we talk about the following:

• Look at some items causing confusion over §199A on discussion forums as returns are prepared

• Treasury announces changes in temporary regulations and subregulatory guidance

• Recipients of sexual harassment and sexual abuse settlements with confidentiality clause allowed to deduct legal fees

• Gambling loss triggered by impulse control problem side effect of prescribed drug not a casualty loss

• Proposed regulations issued for FDII and GILTI

• IRS no longer plans to issue regulations to bar post-retirement lump-sum distributions from defined benefit plans

• Partnerships required to add tax basis disclosures given until March 15, 2020 to provide information to IRS

Copyright 2019 Kaplan, Inc.

Current Federal Tax Developments for the week of March 4, 2019: Tax Refunds and the 2019 Tax Returns

• A look at the special rules under §111 for tax benefit and how it impacts state tax refunds from 2018 returns

• No Fifth Amendment defense against assertion that taxpayer is trafficking under §280E

• IRS grants extension of time to file returns for farmers and fishermen

• Tax Court looks at the application of the penalty review process to automated exams

• IRS gave insufficient notice that a third party would be contacted for information

Copyright 2019 Kaplan, Inc.

This week we look at:

• State found to illegally discriminate against federal law enforcement retirees due to tax break for state law enforcement retirees

• IRS decides expanded availability of meal delivery means fewer meals are truly for the convenience of the employer

• IRS acquiesces in case regarding meals for hockey teams

• Politico points out loophole that may exist for owners of co-op shares with regard to $10,000 tax limitations

• Looking at options beyond the safe harbor for rentals under §199A

Copyright 2019 Kaplan, Inc.

This week we look at:

• Fix for auto depreciation quirk added by TCJA released by IRS

• A subtrust qualified as a conduit trust for IRA distribution purposes

• AICPA asks for relief from potential impact of syndicate rules on small business tax relief

• Form 1065 instructions add a requirement for certain partnerships to disclose negative tax basis

• Checkbox added for when basis calculation required with Form 1040 and situations where it is required expanded by IRS

Copyright 2019 Kaplan, Inc.

This week we look at:

• Situations where an employer can recover HSA funds from employee accounts

• IRS decides taxpayers can use Rev. Proc. 2018-60 even if currently using an impermissible method of accounting

• Taxpayer reasonably relied on CPA's advice and escapes penalties

• Airline passenger discovers he can't sue the TSA for his lost tax paperwork

Copyright 2019 Kaplan, Inc.

This week we look at:

• IRS delays end of faxing transcripts after Chair and ranking minority member of Senate Finance Committee send a joint letter requesting a delay

• Taxpayers could not avoid NOL carryforward election they claimed they were unaware of

• IRS publishes corrected version of §199A regulations, changes one word some see as potentially important

• Article discusses risks to marijuana businesses from electing small business inventory relief added by TCJA

Copyright 2019, Kaplan, Inc.

This week we look at:

• Reported IRS backlog of unanswered letters that arrived during the shutdown

• IRS publishes information on impact of shutdown on matters before the Tax Court

• W-2 wages Revenue Procedure made final at same time §199A final regulations come out

• More thoughts on the §199A final regulations

Copyright 2019, Kaplan, Inc.

This week we look at:

• New York State Publishes Its Wayfair Guidance, Demanding Immediate Compliance
• Trust Case Going to US Supreme Court
• Sequestration Does Not Apply to Minimum Tax Credit
• Proposed Safe Harbor for Rental as a Trade or Business Under §199A
• Final Regulations Are Out - §965 and, the Big One, §199A
• IRS Grants Limited Waiver of Underpayment Penalties

Copyright 2019 Kaplan Professional Education

This week we look at:

• IRS reopens IVES and user-fees based programs

• Advisers need to be sure to check syndicate rules to assure entity not subject to §163(j) rules

• Treat of realtors revised in second draft version of portion of Publication 535

• Filing season to start January 28, refunds are going to be issued

• Address to file gift tax returns has changed, estate tax return address to change in July

Copyright 2019, Kaplan, Inc.

This week's developments:

• IRS Notice gives guidance to tax-exempt organizations on excess compensation tax

• Outgoing W&M Chairman publishes discussion paper on TCJA technical corrections

• §199A final regulations still sitting at OIRA

Copyright 2019, Kaplan, Inc.