Podcast appearances and mentions of eric yauch

Kate Kraus, a partner at Allen Matkins, tells Tax Notes legal reporter Eric Yauch the unexpected tax results of recent coronavirus legislation on real estate.For additional coverage, read these articles in Tax Notes:IRS Provides Distribution Relief for REITs and RICsSubstantive QIP Correction Answers Coming in Final Bonus RegsSome Taxpayers Would Rather Just Fix QIP ProspectivelyBill Would Give O-Zone Treatment to Small Businesses Hit by VirusLoss Carryback Revival Could Prompt M&A RenegotiationsO-Zone Investors Look for Additional Coronavirus ReliefIn our new segment "In the Pages Sneak Peek," Tax Notes Executive Editor for Commentary Jasper B. Smith talks with Michael Q. Cannon about his recent piece, "Double Tax Benefits in the CARES Act."All Tax Notes news coverage and analysis of the coronavirus pandemic is now free and accessible to the public: taxnotes.com/coronavirus-tax-coverage**CreditsHost: David D. StewartExecutive Producers: Jasper B. Smith, Faye McCrayShowrunner: Paige JonesAudio Engineers: Derek Squires, Jordan ParrishGuest Relations: Nicole White

Lynn Nichols Federal Tax Update Podcast October, 07 2019, Episode 49 Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law. Lack of Safe Harbor in Proposed Accounting Regs Chafes Tax Pros Practitioners are disappointed by the absence of goods sold offsets and a financial accounting percentage of completion method safe harbor in newly proposed regulations on the Tax Cuts and Jobs Act’s tax accounting provisions. [Tax Notes Today, 9/9/2019, Article by Nathan J. Richman]  Automatic Consent Procedures Issued for Accounting Rule Changes The IRS has issued procedures (Rev. Proc. 2019-37) for obtaining automatic consent to change accounting methods to comply with section 451 and recently released proposed regulations under reg. section 1.451-3 (REG-104870-18) and 1.451-8 (REG-104554-18). [Rev. Proc. 2019-37; 2019-39 IRB 1, 9.6.2019]   IRS Publishes Proposed Regs on Exempt Organization Donor Disclosures The IRS has published proposed regulations (REG-102508-16) updating the section 6033 reporting regulations for tax-exempt organizations to reflect amendments to the provision, including changes regarding donor disclosures under prior guidance. [REG-102508-16; 84 F.R. 47447-47454, 9/10/2019]   IRS Not Responsible for Paying Return Preparer’s Fee from Refund The Court of Federal Claims dismissed for lack of jurisdiction a return preparer’s suit alleging that the government must pay the tax return preparation fee his client promised to pay from his refund, because the IRS must remit tax refunds to the taxpayer, not the tax return preparer, and is not bound by the agreement with his client. [Prakash Narayan; No. 1:19-cv-00442, 9/5/2019]   IRS Built-In Gain and Loss Rules Eliminate a Safe Harbor Option Proposed regulations that limit a corporation’s losses following a change in ownership could be more restrictive for some companies by eliminating an option for computing built-in gain and loss. [Tax Notes Today, 9/10/2019, Article by Emily Foster]      IRS Publishes Proposed Regs on Built-In Gain and Loss The IRS has published proposed regulations (REG-125710-18) on the items of income and deduction that are included in the calculation of built-in gains and losses under section 382. Comments and hearing requests are due by November 12.      [REG-125710-18; 84 F.R. 47455-47473, 9/10/2019]     Audits of Partnerships That Cease to Exist Could Have Odd Results Partners who were owners of an entity just before it ceased to exist could be on the hook for adjustments related to other partners who exited the scene earlier, under the centralized audit regime. [Tax Notes Today, 9/11/2019, Article by Eric Yauch]   Student Liable for Taxes After Winning Car for Good Grades The Tax Court, in a designated order, held that the value of a car that a high school student won when she was entered in a drawing for students with good grades and attendance was includable in her income and she is liable for a tax deficiency, finding that the value of the car was not excludable as a gift under section 102 or as a prize under section 74. [Alejandra Conyers; No. 13969-18, 9/11/2019]

Tax Notes Today legal reporter Eric Yauch delves into the recent decisions by several private equity firms to convert to corporations in wake of the Tax Cuts and Jobs Act.For additional coverage, read these articles in Tax Notes:Carlyle’s ‘Full C Corp’ Conversion Differs From OthersPrivate Equity Firms Are Converting to Corps, Sort OfApollo Joins Fund Manager Bandwagon by Converting to C CorpC Corp Conversions Advance, Others Still Mulling Decision***This episode is sponsored by University of California, Irvine Law School’s Graduate Tax Program. For more information, visit law.uci.edu/gradtax.

Lynn Nichols Federal Tax Update Podcast August, 01 2019, Episode 43 Listen as Lynn Nichols provides commentary on 8 Items pertaining to current developments in U.S. tax law. IRS Makes Few Changes in Final Rule on 501(c)(4) Notifications Final regulations explaining how organizations should notify the IRS of their intent to operate as section 501(c)(4) social welfare entities are almost unchanged from the temporary and proposed regs and generally reject recommendations from the public. [Tax Notes Today, 7/22/2019, Article by Fred Stokeld]   Deemed Distribution Requires Downward Basis Adjustment In partially redacted technical advice, the IRS concluded that a deemed distribution of a partnership interest in an assets-over merger of two partnerships is considered an exchange that requires a mandatory downward basis adjustment under section 743(b) when the resulting partnership has a substantial built-in loss. [TAM 201929019, 4/30/2019, rel., 7/19/2019]   LB&I Division Announces 6 New Compliance Campaigns The IRS Large Business and International Division has approved six new compliance initiatives that were identified through LB&I data analysis and suggestions from IRS employees. [LB&I Div. Announcement on July 19,2019]   IRS Working on Guidance for Applying SALT Cap to Passthroughs Treasury and the IRS are developing proposed rules on the application of the $10,000 cap on the state and local tax deduction to passthroughs, and practitioners fear the guidance will seek to invalidate an emerging SALT cap workaround. [Tax Notes Today, 7/23/2019, Article by Amy Hamilton] 110,000 Entities Participate in Connecticut SALT Cap Workaround  About 110,000 passthroughs are participating in Connecticut’s workaround to the $10,000 cap on the state and local tax deduction featuring an entity-level tax and offsetting state credit for members, according to Revenue Commissioner Scott Jackson. [Tax Notes Today, 7/26/2019, Article by Amy Hamilton]   IRS Reminds Tax Pros of Data Security Plan Requirement The IRS has reminded (IR-2019-131) professional tax return preparers that federal law requires them to create a written information security plan to protect their clients’ data. This release is one in a series of the "Tax Security 2.0 -- Taxes-Security Together" campaign. [IR-2019-131, 7/23/2019] Practitioners in Tight Spot on Self-Charged Interest The government punted on the treatment of self-charged interest in the proposed business interest limitation regulations, forcing practitioners to take a best guess on its treatment without authority to rely on. [Tax Notes Today, 7/26/2019, Article by Eric Yauch]   IRS Gives Eligible Partnerships Extension to File Return The IRS has issued guidance (Rev. Proc. 2019-32) granting an extension to eligible partnerships to file a superseding Form 1065, “U.S. Return of Partnership Income,” and furnish a corresponding Schedule K-1 (Form 1065), “Partner’s Share of Income, Deductions, Credits, etc.,” to each of its partners. [Rev. Proc. 2019-32; 2019-33 IRB 1, 7/25/2019] Worker Wins Damages After Employer Sends False Information to IRS A U.S. district court, in a broader breach of contract case, awarded damages under section 7434 to an employee who claimed her employer submitted false information to the IRS by classifying her as an independent contractor rather than as an employee. [Valerie Vanderbilt v. Boat Bottom LLC, et al.; USDC S FL Key West Div.,             No. 4:18-cv-10261]

Eric Yauch and Andrew Velarde highlight the major themes that came up at the American Bar Association Section of Taxation meeting in Washington, including interesting insights into recent and coming regulations. For more coverage of the ABA meeting, read these articles in Tax Notes:IRS Considering More Safe Harbors in O-Zone RulesPartnerships Can Defer Section 1231 Gain Under O-Zone RulesTreasury Carefully Considering Interest Definition in Final RulesTriple Net Lease Changes Likely in Final 199A Safe HarborIRS Won’t Be as Forgiving of TCJA Comment DeadlinesWilkins Predicts Temporary Regs Will Disappear From RulemakingTreasury, IRS Open to Suggestions on PTI SimplificationU.S. Officials Urging Delay of DSTs as Negotiations ContinueLooming Tax Court Trial Will Test Economic Substance DoctrineBridging the Guidance Enforcement Gap Is IRS Priority

Lynn Nichols Federal Tax Update Podcast April, 18 2019, Episode 37 Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law.  IRS Explains Negative Tax Basis Capital Reporting Requirement The IRS has responded to taxpayer concerns about a new partnership reporting requirement by providing definitions and real-world examples of what’s required to be handed over to partners, but some practitioners are surprised by the clarifications. [Tax Notes Today; 4/8/2019, article by Eric Yauch]   IRS Denies Exemption to Organization Formed to Support Accident Victim The IRS denied tax-exempt status to an organization established to raise funds for an accident victim and his family because the organization is serving private rather than public purposes. [LTR 201911008, 12/20/2018, rel. 3/15/2019]   (a) IRS Revises Practice Unit on Tax Home Determination The IRS has revised a prior international practice unit on tax homes for purposes of section 911 to provide its staff with explanations of general international tax concepts and information about specific types of transactions.   (b) Practice Unit on Interest Capitalization Revised for TCJA Changes The IRS has revised a prior practice unit to reflect changes made by the Tax Cuts and Jobs Act on the section 263A(f) requirement to capitalize interest if a taxpayer produces designated property, identifying taxpayers subject to section 263A(f) and the steps for determining how much interest must be capitalized to the basis of designated property.   Practice Unit on Construction Industry Accounting Methods Revised The IRS has revised a prior practice unit, incorporating changes made by the Tax Cuts and Jobs Act, on land developers’ and subcontractors’ use of the completed contract method of accounting or the percentage of completion method for long-term contracts in the construction industry.   Business Consultant’s Travel Expense Deductions Denied The Tax Court, sustaining accuracy-related penalties, held that a consultant who operated a concierge chief financial officer business wasn’t entitled to claim travel expense deductions under section 162, finding that his tax home was in New Jersey, where he had a three-year contract with a client, and not Atlanta where he and his family had a home. [Michael E. Brown; No. 21096-15; T.C. Memo. 2019-30, 4/8/2019]   Tax Court Lacks Jurisdiction to Hear Suspended Corporations’ Cases The Tax Court held that it lacked jurisdiction to hear deficiency challenges by two corporations because the state of California had suspended their corporate rights prior to the filing of the petitions and that the revival of their corporate rights was beyond the time allotted to file a petition once a deficiency notice is received. [Timbron International Corp. et al. T.C. Memo. 2019-31, 4/8/2019]   Fact Sheet Outlines Section 199A Deduction The IRS has released a fact sheet (FS-2019-8) outlining the new section 199A deduction, which allows varying deduction amounts for qualified business income, qualified real estate investment trust dividends, and qualified publicly traded partnership income. [FS-2019-8; 4/11/2019]

Lynn Nichols Federal Tax Update Podcast March, 20 2019, Episode 35 Listen as Lynn Nichols provides commentary on 10 Items pertaining to current developments in U.S. tax law.  IRS Open to Additional Guidance on Portions of 199A Nothing about the proposed real estate rental property safe harbor is set in stone, and further guidance on other one-off issues related to the passthrough deduction is a possibility, IRS officials said March 8. [Tax Notes Today; 3/11/2019, Article by Eric Yauch] Practitioners Call for 199A Soft Guidance, Safe Harbor Fix Practitioners are welcoming IRS signals that it may reconsider its positions on the passthrough deduction rental safe harbor, saying the safe harbor isn't helpful. [Tax Notes Today; 3/15/2019, Article  by Eric Yauch]   Court Dismisses Challenge to IRS Levy on Social Security Benefits A U.S. district court dismissed an individual’s challenge to the IRS’s levy on 100 percent of his Social Security benefits to collect his $20 million tax debt, finding that the suit is barred by the Anti-Injunction Act and the individual didn’t show that any exception to the act applies; the court denied as futile his request to amend the complaint. [Edward J. Holland Jr.; No. 2:17-cv-13926, 3/7/2019]   Fact Sheet Outlines TCJA Changes for Businesses The IRS has released a fact sheet (FS-2019-3) summarizing tax law changes under the Tax Cuts and Jobs Act that affect businesses and provides resources to help business owners track down details specific to their concerns, noting that most of the changes took effect in 2018 and will affect returns filed in 2019. [FS-2019-3, 3/8/2019]   Insurance Agents Group Denied Exemption The IRS denied tax-exempt status to a group of insurance agents seeking exemption as a business league because the organization operates to benefit a specific insurance company rather than to improve the business conditions of insurance agents in general. [LTR 201906014; 11/16/2018, rel. 2/8/2019]   Retroactive Social Security Benefits Stymie ACA Credit Claim A lump-sum payment of retroactive Social Security benefits must be included in income for purposes of determining eligibility for the Affordable Care Act’s premium tax credit, the Tax Court has held. [Tax Notes Today; 3/12/2019, Article by Kristen Parillo] Election Doesn’t Protect Against Liability for Excess ACA Credits The Tax Court, sustaining an IRS determination, held that an individual’s modified adjusted gross income under section 36B to determine his eligibility for advance premium tax credits under the Affordable Care Act included all the Social Security benefits he received in that year despite a section 86(e) election to exclude a lump sum payment for the prior year. [Levon Johnson; 152 T.C. No. 6, 3/11/2019]   Entity-Level Taxes Likely a Safer Bet for SALT Workarounds Entity-level taxes used as state and local tax deduction cap workarounds are likely better able to withstand scrutiny than the creation of charitable funds, according to a practitioner. [Tax Notes Today; 3/13/2019, Article by Andrea Muse]   Ninth Circuit Affirms Reduction of Estate's Charitable Deduction The Ninth Circuit affirmed a Tax Court decision that sustained a tax deficiency and accuracy-related penalty against an estate, finding that the Tax Court properly upheld the IRS’s reduction of a charitable deduction from the value of the property at the time of death because post-death events decreased the value of property actually given to the charity. [Victoria E. Dieringer et al.; CA 9, No. 16-72640, 3/12/2019]   Power of Attorney, Extension Forms Fail to Update Address With IRS The Tax Court, dismissing a deficiency case for lack of jurisdiction, held that forms a couple sent to the IRS with their new address after they had filed a return with their old address didn’t provide clear and concise notification of a different address. [Damian K. Gregory et ux.; 152 T.C. No. 7, 3/13/2019]   Court Won’t Dismiss Former S Corp Shareholder’s Suit for Breach A U.S. district court refused to dismiss a former S corporation shareholder’s suit against the remaining shareholders for breaching an agreement by refusing to agree to a section 1377 election to split the S corporation’s tax year into two years according to the date his interest was terminated, which resulted in his owing additional taxes. [Thomas S. Manfre v. David G. May et al.; USDC N Ill E Div., No. 1:18-cv-02184, 3/12/2019]   IRS Removes Reporting Requirement for Audit Regime Reps The IRS has scaled back the amount of information individuals serving as partnership representatives under the audit regime must disclose on partnership returns. [Tax Notes Today; 3/15/2019, Article by Eric Yauch]

Eric Yauch discusses the final rules on the centralized partnership audit regime.For additional coverage, read these articles in Tax Notes:Audit Regime Raises Need for Appeals GuidancePractitioners Suggest Options for Debt Issues in Audit RegimeFinal Audit Regs Put Focus on Debt MischaracterizationFinal Audit Regs Clarify What’s In, What's Out of New RegimeNew Final Partnership Audit Rules Provide Several Clarifications

Emily Foster and Eric Yauch discuss some of the key elements of the recently proposed regulations on the business interest deduction limitation.For more extensive coverage, read these articles in Tax Notes:Interest Rule Leaves Securities Traders in a JamInterest Regs Muddy Partnership Debt-Equity DecisionsInterest Deduction Regs’ Antiavoidance Rule Causes ReassessmentsInterest Allocation Rules Could Wreak Havoc on GroupsInterest Regs Require Taxpayers to Decide on ‘Early Adoption’Interest Regs Raise Same Real Estate Issues as 199A RulesInterest Deduction Regs Cover More Than Just InterestInterest Regs Tackle Some Passthrough Issues, Leave Others Open

Eric Yauch discusses a provision of the Tax Cuts and Jobs Act that hasn't received a lot of attention: section 461(l), which caps excess business losses at $250,000 for individuals and $500,000 for joint filers.For more coverage in Tax Notes, see:New Loss Limitation Is on Government’s RadarNew Loss Limitation Hard to Calculate, Interpret With Other Rules

Lynn Nichols Federal Tax Update Podcast October 08, 2018, edition Listen as Lynn Nichols provides commentary on 9 Items pertaining to current developments in U.S. tax law. This week’s topics include: Measly Offer in Compromise Doesn’t Prevent Approval of Levy on Home The Eighth Circuit affirmed a district court decision that upheld an IRS levy on an individual’s home to satisfy her half million-dollar tax liability, finding that the individual was incorrect in her belief that reg. section 301.6334-1(d)(1) provided that the court couldn’t approve the levy until the IRS responded to her $1,000 offer in compromise. [ Brabant-Scribner, Debora; CA 8; No. 17-2825; 8/17/2018]   Non-Grantor Trusts Still Useful in TCJA Planning Although Treasury effectively shut down tax avoidance strategies that used multiple trusts to take advantage of the new passthrough deduction, setting up at least one non-grantor trust is likely allowed and could still have numerous benefits. [Tax Notes Today; 8/21/2018; Article by Eric Yauch]   Fees Paid to Shareholder-Employees Were Disguised Distributions The Tax Court held that purported factoring fees and most of the management fees paid to five individual shareholder-employees of C corporations were not deductible expenses of the C corporations but instead were disguised distributions of corporate profits, finding that the factoring fees lacked economic substance and the management fees constituted unreasonable compensation for services. [Pacific Management Group et al. v. Commissioner; No. 6411-07; No. 6412-07; No. 6413-07; No. 6414-07; No. 6494-07; No. 6498-07; No. 6499-07; No. 6592-07; No. 6593-07; No. 6594-07; No. 6596-07; T.C. Memo. 2018-131; 8/20/2018]   [See also attached article by Kristen A. Parillo . . . DOC 2018-33960]   IRS Open to Change of Partnership Treatment in Bonus Rules The IRS and Treasury Department addressed the outstanding partnership issues in the proposed bonus deprecation regulations, but that doesn’t mean they can’t be persuaded to change positions in the final rules. [Tax Notes Today; 8/22/2018; Article by Eric Yauch]   IRS Issues TCJA Guidance on UBTI for Separate Trades or Businesses The IRS has requested comments and provided interim guidance and transition rules regarding section 512(a)(6), which requires an exempt organization with more than one unrelated trade or business to calculate unrelated business taxable income separately for each trade or business. [ Notice 2018-67; 2018-36 IRB 409; 8/21/2018]   Basis Limitation in 199A Regs Creates Compliance Conundrums Taxpayers with property that is no longer depreciable could face headaches in navigating the basis limits on passthrough deductions in the proposed section 199A regulations. [Tax Notes Today; 8/23/2018; Article by Eric Yauch]   Accounting Method Guidance Modified for Some Terminated S Corps The IRS has modified the automatic changes list for accounting methods to reflect the addition of section 481(d) by the Tax Cuts and Jobs Act (P.L. 115-97), which provides rules on adjustments required by section 481(a)(2) that are attributable to some revocations of S corporation elections under section 1362(a). [Rev. Proc. 2018-44; 2018-37 IRB 426; 8/22/2018]   S Corp Termination Guidance Offers Clarity on Method Changes Some terminated S corporations that change from a cash method to an accrual method of accounting may take into account positive or negative adjustments ratably over a six-year period under a new IRS revenue procedure. [Tax Notes Today; 8/23/20`18; Article by Marie Sapirie]   IRS Clarifies Interplay of SALT Credits, Federal Tax Rules The IRS has announced the release of proposed regulations (REG-112176-18) that clarify the relationship between state and local tax credits and the federal tax rules for charitable contribution deductions. [IR-2018-172; 8/23/2018] Proposed SALT Regs Require Reductions to Charitable Deductions The IRS has published proposed regulations providing that a taxpayer who makes payments or transfers property to an entity listed in section 170(c) must reduce their charitable contribution deduction by the amount of any state or local tax credit the taxpayer receives or expects to receive. [REG-112176-18; 83 F.R. 43563-43571; 2018-37 IRB 430; 8/27/2018]     Tax Court Reins In Couple Using Horse-Breeding to Create Losses   The Tax Court held that a couple that tried to offset all their income with horse-leasing expenses prepaid with sham loans was not entitled to loss deductions as part of a horse-breeding operation. The court found their purported horse-breeding activity was not a trade or business and sustained section 6662(a) penalties for two of the three tax years at issue. [Householder, Scott A.; No. 19150-10; No. 6541-12; T.C. Memo. 2018-136; 8/23/2018]

Lynn Nichols Federal Tax Update Podcast August 20, 2018, edition Listen as Lynn Nichols provides commentary on 8 Items pertaining to current developments in U.S. tax law. This week’s topics include: Final Regs Provide Substantiation Rules for Charitable Contributions The IRS has issued final regulations on the substantiation and reporting rules for charitable contributions at various monetary thresholds and for donated clothing and household items. The final regs also address the new definitions of qualified appraisal and qualified appraiser for noncash contributions and recordkeeping requirements for all cash contributions. [T.D. 9836; 7/27/2018]    Tax Court Correctly Dismissed Employment Tax Liability Challenge The Eighth Circuit held that the Tax Court properly dismissed on jurisdictional grounds an attorney’s claim that he did not owe additional employment tax on payments he received as the sole owner and officer of an S corporation, finding that because there was no actual controversy involving a determination that he was an employee for FICA purposes, the Tax Court was deprived of jurisdiction. [Azarian, Martin S. P.A. v. Commissioner; CA 8; No. 17-2134; 7/27/2018]     Eighth Circuit Sides With IRS in Employment Tax Dispute Challenges to reasonable compensation determinations for S corporations must allege taxpayer employment issues for the Tax Court to have jurisdiction. [Tax Notes Today; 7/31/2018; Article by Eric Yauch]     Horse Breeding Organization Is Denied Exemption The IRS denied an organization's application for tax-exempt status because its primary activity, conducting a horse breeding program, does not further exempt purposes and the organization serves the private interests of horse breeders. [LTR 201830023; 5/1/2018; rel. 7/27/2018]   IRS Revokes Exempt Status of Social Horse Club The IRS revoked the tax-exempt status of a social club organized to promote interests in horses and horsemanship because its investment and non-member income exceeded the 35 percent threshold, and its non-member income exceeded the 15 percent threshold on a regular basis. [LTR 201830018; 1/11/2018; rel. 7/27/2018]      IRS Isn't Exercising Its Authority Over Unregulated Preparers The IRS failed to assess more than $121 million in preparer tax identification number penalties, despite evidence of “incompetent and unscrupulous” conduct by unregulated return preparers. [Tax Notes Today; 7/31/2018; Article by William Hoffman]   Tax Court Finds Individual’s Mary Kay Activity Wasn’t for Profit The Tax Court, sustaining accuracy-related penalties, held that an individual didn’t engage in her Mary Kay consulting activity for profit but attempted to shelter her taxable wage income by deducting otherwise nondeductible personal expenses, such as trips to Disney World and Europe, as business expenses. [Nix, Kimberly S. v. Commissioner; No. 4000-16; T.C. Memo. 2018-116; 7/30/2018]   Debate Over Parsonage Allowance Continues in Dueling Briefs Supporters of a 64-year-old tax break for clergy housing are continuing their fight to preserve it after a court declared it unconstitutional last fall. [Tax Notes Today; 8/1/2018; Article by Fred Stokeld]   Clergy Urge Court to Hold Rental Allowance Constitutional In a reply brief for the Seventh Circuit, a group of ministers and churches argued that section 107, which allows ministers to exclude from income a rental allowance paid as part of their compensation, is constitutional because it is an exemption and not a transfer of funds and because it applies the convenience-of-the-employer doctrine to ministers. [Annie L. Gaylor et al. v. Steven T. Mnuchin et al.; No. 18-1277; No. 18-1280; 7/30/2018]         Yacht Deductions Disallowed, but Penalties Deep-Sixed The Tax Court jettisoned a taxpayer’s claim that his sport fishing yacht deductions were marketing expenses but chose not to weigh him down with accuracy penalties. [Tax Notes Today; 8/3/2018; Article by Kristen Parillo]   Property Developer Fishing for Yacht Deductions Comes up Empty-Handed The Tax Court held that a Florida property developer wasn’t entitled to deduct expenses for a fishing yacht that he claimed was a marketing tool, finding that the expenses were for entertainment and he failed to provide substantiation. The court didn't impose accuracy-related penalties because the IRS failed to show supervisory approval. [Becnel, Damon R. v. Commissioner; No. 14707-14; T.C. Memo 2018-120; 8/2/2018]

David Stewart and Eric Yauch delve into the details of the proposed regulations on the passthrough deduction under section 199A.

Lynn Nichols Federal Tax Update Podcast August 13, 2018, edition Listen as Lynn Nichols provides commentary on 8 Items pertaining to current developments in U.S. tax law. This week’s topics include: IRS Likely to Trounce 199A Trust Planning Strategy Wealth planning advisers eager to help their clients take advantage of the new passthrough deduction by setting up multiple non-grantor trusts to claim multiple deductions may soon have to undo all that effort. [Tax Notes Today; 7/23/2018; Article by Jonathan Curry]   Group Fails to Meet Operational Test; Exempt Status Revoked The IRS revoked the tax-exempt status of a group that promoted tourism and improved the conditions of the tourism business environment of a particular area, finding that the group wasn't operated exclusively for charitable purposes. [LTR 201829015; 1/16/2018; rel. 7/20/2018]     IRS May Rely On, but Not Adopt, Grouping Rules in 199A Regs The IRS may look to the passive activity loss grouping and material participation rules when drafting the passthrough deduction regulations, but it isn’t likely to completely adopt them. [Tax Notes Today; 7/24/2018; Article by Eric Yauch]     Partners Agreed to Extension of Limitations Period for Assessment The Tax Court, in a Son-of-BOSS case, held that Forms 872-I signed by two partners extended the limitations period for the IRS to assess taxes against them attributable to partnership items, noting that the IRS forms didn’t extend the statute for returns but for the assessment of income tax due on those returns. [Inman Partners et al. v. Commissioner; No. 15953-06; T.C. Memo 2018-114; 7/23/2018]      Shareholders Liable for Transaction Lacking Economic Substance The Ninth Circuit reversed a Tax Court decision involving an asset and stock sale and a third party that was designed as a tax avoidance scheme.  [Tax Notes Today;7/25/2018; Article by Emily Foster]         Former Shareholders Liable for Taxes on Asset Sale as Transferees The Ninth Circuit, reversing a Tax Court decision, held the former shareholders of a closely held corporation liable as transferees for the taxes owed on the proceeds from an asset sale, finding that a stock sale transaction lacked economic substance beyond tax avoidance and the former shareholders are liable for the taxes under applicable state law. [Slone, Norma L. et al. v. Commissioner; No. 16-73349; No. 16-73351; No. 16-73354; No. 16-73356; 7/24/2018]     IRS Argues $33 Million Charitable Deduction Decision Was Correct The IRS’s denial of a $33 million charitable deduction was intended to halt a scheme in which multiple taxpayers claimed a deduction for the same property. [Tax Notes Today; 7/25/2018; Article by Eric Yauch]        Government Argues Tax Court Properly Denied Charitable Deduction In a brief for the D.C. Circuit, the government argued that the Tax Court correctly held that a partnership wasn’t entitled to a $33 million charitable contribution deduction because it failed to comply with substantiation requirements and the Tax Court correctly held that accuracy-related penalties apply to any resulting underpayment.         [Jeff Blau v. Commissioner; USDC DC; Gov. Brief; No. 17-1266; 7/23/2018]       (a)OPR Reaches Settlement Agreement With Enrolled Agent The IRS has announced that the Office of Professional Responsibility and a tax practitioner who violated rules of conduct under Circular 230 have reached a settlement agreement that includes a monetary penalty. [IR-2018-155; 7/25/2018]   (b) OPR Censures Practitioner for Providing Misleading Information The IRS has announced that a tax practitioner was censured by the Office of Professional Responsibility for violating conflict of interest rules under Circular 230. [IR-2018-154; 7/25/2018]   Husband Relieved From Tax on Some of Wife's Embezzlement Income The Tax Court held that an individual is entitled to innocent spouse relief from taxes attributable to income his wife embezzled during one of two tax years, finding that although he lacked actual knowledge of the embezzlement when they filed their return that year, he learned of it when she was arrested before they filed the following year. [Jacobsen, Rick E. v. Commissioner; No. 25348-15; T.C. Memo. 2018-115; 7/25/2018]

Lynn Nichols Federal Tax Update Podcast June 12, 2018, edition   Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law. This week’s topics include: OUR PROGRAM THIS WEEK INCLUDES . . . . . .   Standard Mileage Rates Guidance Reflects TCJA Changes The IRS has issued guidance on the optional 2018 standard mileage rates to reflect amendments to sections 67 and 217 made by the Tax Cuts and Jobs Act. [Notice 2018-42; 2018-24 IRB 1; 5/25/2018]   Rollover of Plan Distribution From Estate Is Tax-Free The IRS ruled that a distribution from a decedent’s estate to the surviving spouse will be treated as having come directly from the decedent's retirement plan and that the spouse, who was eligible to roll over the amount to her own IRA, won’t have to include the funds in her gross income. [LTR 201821008, 2/2/2018, rel.5/25/2018     Unclaimed IRAs Handed Over to States Subject to Withholding Interests in a retirement account paid to a state unclaimed property fund are subject to federal income tax withholding and must be reported to the IRS. [Tax Notes Today; 5/30/2018, article by Eric Yauch]     Fourth Circuit Affirms Restitution Order in Tax Obstruction Case The Fourth Circuit, in an unpublished per curiam opinion, affirmed a district court's order of restitution as a condition of a probation sentence for an individual who pleaded guilty to interference with the administration of internal revenue laws, finding that there was no abuse of discretion by the district court. [United States v. Lawrence Singleton; CA 4, No. 17-4699, 5/29/2018]   TROUBLESOME PROVISIONS OF TAX CUTS AND JOBS ACT Section 199A 100% bonus depreciation Section 179 deduction Alimony ‘cutoff’ OTHER SUBJECTS GENERATING LOTS OF DISCUSION ‘New’ partnership audit rules Selection and appointment of authorized representative

Lynn Nichols Federal Tax Update Podcast May 24, 2018, edition   Listen as Lynn Nichols provides commentary on 7 Items pertaining to current developments in U.S. tax law. This week’s topics include: OUR PROGRAM THIS WEEK INCLUDES . . . . . .   IRS Denies Tax-Exempt Status to Natural Gas Promoter The IRS denied tax-exempt status to an organization established to support the natural gas industry after concluding the organization operates in a commercial manner and benefits its founder and other insiders. [LTR 201818018; 2/6/2018, rel. 5/4/2018]     IRS Denies Exemption to Farmers Market The IRS denied tax-exempt status to an organization that operates a farmers market because it provides services for the convenience of vendors instead of improving the business conditions of its farmers market community. [LTR 201818017; 2/7/2018, rel. 5/4/2018]     Tax Court Says Burden Is on Partnership in Penalty Challenge It’s up to partnerships to prove they don’t owe penalties in legal challenges, even though the individual partners would likely be the ones to pay. [Tax Notes Today; May 8. 2018, Article by Eric Yauch]   IRS Doesn’t Have Burden to Show Penalty Approval in Partnership Case The Tax Court held for the first time that the IRS doesn’t bear the burden of production regarding penalties in partnership-level proceedings and, therefore, refused to reopen the record in a partnership case to let the IRS provide evidence of supervisory approval of penalties under section 6751(b). [Dynamo Holdings LP et al. v. Commissioner; No. 2685-11; No. 8393-12; 150 T.C. No. 10, 5/7/2018] Safe Harbors Modified for Determining Built-In Gain, Loss The IRS has issued guidance that modifies two approaches under Notice 2003-65 for determining recognized built-in gain or loss under section 382(h), providing that the hypothetical cost recovery deductions that would have been allowable had an election under section 338 been made or had the asset been purchased at fair market value are determined without regard to the additional first-year depreciation deduction in section 168(k). [Notice 2018-30; 2018-21 IRB 1, 5/8/2018]   Couple Wasn’t Insolvent, Must Include Discharged Debt in Income The Tax Court, sustaining a late-filing addition to tax, held that funds a couple transferred to their son’s savings account should be considered in determining their insolvency status, that they were not insolvent for the tax year at issue, and that discharged student loan debt was not excludable from their income under section 108(a)(1)(B). [Hamilton, Vincent C. et ux. v. Commissioner; No. 8037-16; T.C. Memo. 2018-62, 5/8/2018]   Tax Obstruction Conviction Vacated in Light of Marinello Decision The Second Circuit, in an unpublished per curiam opinion, vacated the section 7212 tax obstruction conviction of an individual who prepared false income tax returns, finding that the obstruction conviction could not stand in light of the Supreme Court’s recent decision in Marinello v. United States, 138 S. Ct. 1101 (2018). [United States v. Samuel Gentle; CA 2, No. 16-4020, 5/9/2018]   [copy of Supreme Court decision follows]   New Automatic Method Change to Conform With New Accounting Standards The IRS has provided a new automatic accounting method change for taxpayers to use to conform with new accounting standards on the recognition of revenue from contracts with customers. [Rev. Proc. 2018-29; 2018-21 IRB 1, 5/10/2018]  

Lynn Nichols Federal Tax Update Podcast April 16, 2018, edition   Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law. This week’s topics include: OUR PROGRAM THIS WEEK INCLUDES . . . . . . IRS Fact Sheet Outlines Options for Taxpayers Who Can't Pay What's Owed The IRS has advised individuals who can't pay all of their tax bill to file their return on time and pay as much as possible, which will help reduce penalties and interest, and to seek options provided by the IRS if they can't pay at all. [FS-2018-8; 4/13/2018]                                                                                                                                                                                                        Student Loan Repayments to Doctors Are Excludable From Income In a legal memorandum, the IRS concluded that cash awards made under a state’s student loan repayment program are excludable from the recipients’ gross income under section 108(f)(4) and that the state isn’t required to file or provide any information returns regarding those payments. [ ILM 201815016; 1/8/2018, rel. 4/16/2018] Extension Granted to Adjust Basis of Partnership Property The IRS granted a partnership an extension of time to file an election under section 754 to adjust the basis of partnership property. [LTR 201815002; 11/30/2017; rel/ 4/13/2018     PRACTITONER ALERT ! ! ! Questions Loom Over Repeal of Alimony Tax Provisions Upcoming IRS guidance on the repeal of alimony tax provisions is unlikely to answer some of the more pressing questions in the area that practitioners are wrestling with. [Tax Notes Today Article; 4/17/2018; by Eric Yauch     Individual Fails to Establish Entitlement to Innocent Spouse Relief The Tax Court, in a summary opinion, denied an individual innocent spouse relief from joint tax liabilities with her former husband, finding that there was no evidence that she would suffer economic hardship if held liable, that she had reason to know the tax liability wouldn’t be paid, and that she benefited from the underpayment. [ Suwareh, Chinelo Nwankwo et al. v. Commissioner; No. 7233-16S; T.C. Summ. Op. 2018-23; 4/16/2018]     Engineer Can’t Deduct Many Expenses He Claimed for Music Activities The Tax Court, in a summary opinion sustaining accuracy-related penalties, held that an engineer wasn’t entitled to many of the loss deductions he claimed for his music activities, finding that, while he substantiated most of his expenses, many of them were nondeductible personal, living, or family expenses under section 262(a). [Nicholson, Aaron Keith v. Commissioner; No. 17625-16S; T.C. Summ. Op. 2018-24; 4/18/2018]