David R. Baldwin et al., Current developments in individual taxation, The AICPA Tax Advisor (Sept. 1, 2019)

The AICPA Tax Advisor has published its semiannual review of recent developments in the area of individual federal taxation. The executive summary is as follows:

  • The Tax Court held that settlement payments for “emotional distress” are not excludable from income as payments for injuries or sickness.
  • Reversing a district court, the Seventh Circuit held that the Sec. 107 exclusion for payments for the rental value of parsonages does not violate the Establishment Clause or the Free Exercise Clause of the First Amendment to the U.S. Constitution.
  • In technical advice, the IRS explained when meals and snacks provided to employees and/or the general public could be excluded from income under Sec. 119.
  • In a chief counsel advice, the IRS addressed when a taxpayer could deduct the cost of health insurance premiums under Sec. 162(l).
  • Two cases held that the taxpayers could not take deductions for expenses under Sec. 162 because they were not trade or business expenses, but they could deduct the expenses under Sec. 212 as expenses necessary to produce income.
  • The Tax Court reached opposite results in two innocent spouse cases. In the first, the taxpayer was not granted relief even though his spouse had embezzled income from his medical practice, but in the second, the taxpayer was granted equitable relief despite her knowledge of the income at issue in the case.
  • This article is a semiannual review of recent developments in the area of individual federal taxation. It covers cases, rulings, and guidance on a variety of topics. The items are arranged in Code section order.

To see full article, click: Current developments in individual taxation

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.

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