Proposed Regs Issued for Foreign Persons and Partnerships Investing in Qualified Opportunity Funds (Reg-121095-19) (April 12, 2021).

The IRS released for publication in the Federal Register proposed regulations (REG-121095-19) addressing the requirements for certain foreign persons and foreign-owned partnerships investing in qualified opportunity funds (QOFs) and also providing flexibility with regard to working capital safe harbor plans. The summary for the proposed regs is as follows: This document contains proposed regulations that … Continue reading Proposed Regs Issued for Foreign Persons and Partnerships Investing in Qualified Opportunity Funds (Reg-121095-19) (April 12, 2021).

De los Santos v. Commissioner, 156 TC No. 9 (April 12, 2021): Split-dollar Insurance Benefits Were Compensation, Not a Distribution

The U.S. Tax Court in De los Santos v. Commissioner, 156 TC No. 9 (April 12, 2021), issued a “reviewed opinion” holding that economic benefits received by the taxpayer-husband under a split-dollar arrangement were not “distributions” under Code Sec. 301, but were benefits received under a compensatory arrangement and as such were taxable as “compensation … Continue reading De los Santos v. Commissioner, 156 TC No. 9 (April 12, 2021): Split-dollar Insurance Benefits Were Compensation, Not a Distribution

Paul Graham Op Ed: How People Get Rich Now (April 2020)

Paul Graham, founder of Y Combinator, wrote an op ed on his extensive blog, How People Get Rich Now. The article begins as follows: Every year since 1982, Forbes magazine has published a list of the richest Americans. If we compare the 100 richest people in 1982 to the 100 richest in 2020, we notice some big … Continue reading Paul Graham Op Ed: How People Get Rich Now (April 2020)

IRS urges participants of abusive micro-captive insurance arrangements to exit from arrangements (Apr. 9, 2021)

Internal Revenue Service officials urged participants in abusive micro-captive insurance arrangements to exit these transactions as soon as possible. The IRS has stepped up examinations of these arrangements and has recently won yet another case in U.S. Tax Court that such arrangements are not eligible for the tax benefits claimed. On March 10, 2021, the … Continue reading IRS urges participants of abusive micro-captive insurance arrangements to exit from arrangements (Apr. 9, 2021)

CCA 202114020 (Apr. 12, 2021): Bitcoin Cash Received as a Result of Bitcoin Hard Fork Included in Gross Income

In CCA 202114020, the IRS ruled on the issue of whether a taxpayer who received Bitcoin Cash as a result of the August 1, 2017, Bitcoin hard fork has gross income under section 61 of the Internal Revenue Code (Code)? The IRS reached the conclusion that, yes, a taxpayer who received Bitcoin Cash as a … Continue reading CCA 202114020 (Apr. 12, 2021): Bitcoin Cash Received as a Result of Bitcoin Hard Fork Included in Gross Income

PLR 202114001: Married Couple Cannot Deduct Medical Expense of IVF Procedures (Apr. 12, 2021).

The IRS ruled that costs and fees relating to egg donation, IVF procedures and gestational surrogacy did not qualify as deductible medical expenses under Code Sec. 213. However, medical costs and fees directly attributable to the taxpayers were deductible within the limitations of Code Sec. 213, including sperm donation and sperm freezing. See PLR 202114001 by clicking … Continue reading PLR 202114001: Married Couple Cannot Deduct Medical Expense of IVF Procedures (Apr. 12, 2021).

PLRS 202114010-202114012 (Apr. 12, 2021): Trust Beneficiaries Treated as IRA Designated Beneficiaries

In three PLRs, PLRs 202114010-202114012 (Apr. 12, 2021), the IRS ruled that children who were beneficiaries of a trust were treated as designated beneficiaries of an IRA for purposes of determining the applicable distribution period under Code Sec. 401(a)(9). See PLR 202114010 by clicking here. See PLR 202114011 by clicking here. See PLR 202114012 by … Continue reading PLRS 202114010-202114012 (Apr. 12, 2021): Trust Beneficiaries Treated as IRA Designated Beneficiaries

IRS Updates Practice Unit on When Reasonable Cause and Good Faith Exist (April 2, 2021)

The IRS has updated its practice unit discussing when reasonable cause and good faith exist and what factors should be examined. The overview is as follows: This Practice Unit supersedes the previously published Practice Unit with the same title published on July 2, 2020. The Practice Unit was updated to provide further detailed information on … Continue reading IRS Updates Practice Unit on When Reasonable Cause and Good Faith Exist (April 2, 2021)

IRS Practice Unit Updated: Receipt of Dividends or Interest from a Related CFC (March 29, 2021)

The IRS has updated its practice unit on receipt of dividends or interest from a related controlled foreign corporation. The overview is as follows: Note: This Unit was revised to include the extension of the IRC 954(c)(6) look through rule for CFCs with tax years beginning before January 1, 2026. This extension was part of … Continue reading IRS Practice Unit Updated: Receipt of Dividends or Interest from a Related CFC (March 29, 2021)

IRS TE/GE Division Announces New Compliance Initiatives (April 5, 2021)

The IRS Tax Exempt and Government Entity (TE/GE) division issued the following news release regarding an update to its compliance program: TE/GE has updated its Compliance Program and Prioritieswebpage. This page provides information about initiatives under each of our compliance program’s six components that work together to promote compliance by tax-exempt and government entities: Compliance StrategiesData-Driven … Continue reading IRS TE/GE Division Announces New Compliance Initiatives (April 5, 2021)

IRS Updates Practice Unit on Liquidating Distributions of Partners Interest in Partnership (April 2, 2021)

The IRS has updated its practice unit on liquidating distributions of a partners interest in a partnership. The overview is as follows: All partnership distributions are either current or liquidating. A liquidating distribution terminates a partner’s entire interest in the partnership. A current distribution reduces a partner’s capital accounts and basis in his interest in … Continue reading IRS Updates Practice Unit on Liquidating Distributions of Partners Interest in Partnership (April 2, 2021)

Senate Finance Committee Releases Framework Proposing Changes to US International Tax System

Senate Finance Committee Chair Ron Wyden, D-Ore., Senator Sherrod Brown, D-Ohio, and Senator Mark Warner, D-Va., unveiled their framework to overhaul international taxation and invest in America by ensuring mega-corporations pay their fair share. The framework details an overhaul of three taxes Republicans created in their 2017 bill: Global Intangible Low-Taxed Income (GILTI), Foreign Derived Intangible Income … Continue reading Senate Finance Committee Releases Framework Proposing Changes to US International Tax System

President Biden Announces The Made in America Tax Plan proposing corporate tax changes; the American Families Plan with individual tax changes coming soon (April 1, 2021)

On March 31, 2021, President Biden announced The American Jobs Plan portion of his Build Back Better program, which contains corporate tax changes in The Made in America Tax Plan. He also announced that The American Families Plan, which will propose individual tax changes will be coming soon. See the details at the following links: … Continue reading President Biden Announces The Made in America Tax Plan proposing corporate tax changes; the American Families Plan with individual tax changes coming soon (April 1, 2021)

Senator Bernie Sanders introduces two pieces of legislation: The 99.5% Act and The Corporate Tax Dodging Prevention Act; Practitioners View These as The Vehicles Congress + Biden Admin Will Use for Ultimate EGT and Corporate Tax Increases (Mar. 29, 2021)

On Thursday, March 25, 2021, Senator Bernie Sanders co-sponsored two pieces of legislation, which many view as the vehicles for ultimate tax increases: The the 99.5% Act and The Corporate Tax Dodging Prevention Act. The effective date provision of the 99.% Act with EGT provisions provides that it applies to transfers made after December 31, … Continue reading Senator Bernie Sanders introduces two pieces of legislation: The 99.5% Act and The Corporate Tax Dodging Prevention Act; Practitioners View These as The Vehicles Congress + Biden Admin Will Use for Ultimate EGT and Corporate Tax Increases (Mar. 29, 2021)

IRS Criminal Investigation pledges continued commitment to investigating COVID-19 fraud as CARES Act reaches one-year anniversary (March 25, 2021)

The Internal Revenue Service’s Criminal Investigation Division (IRS-CI) marks the one-year anniversary of the Coronavirus Aid, Relief and Economic Security (CARES) Act by pledging its continued commitment to investigating COVID-19 fraud. Over the last year, IRS-CI has been combatting COVID-19 fraud related to the Economic Impact Payments, Paycheck Protection Program (PPP) and Employee Retention Credit. … Continue reading IRS Criminal Investigation pledges continued commitment to investigating COVID-19 fraud as CARES Act reaches one-year anniversary (March 25, 2021)

Kimble v. United States, 2019-1590 (US Fed Cir. 2019): Willful Failure to File FBAR – 50 Percent Penalty Applies

The Court of Federal Claims, in Kimble v. United States, 2019-1590 (US Fed Cir. 2019), held that an individual’s failure to disclose a foreign bank account was willful.  The Court noted that, contrary to the individual’s argument that a taxpayer cannot commit a willful violation without actual knowledge of the obligation to file an Report … Continue reading Kimble v. United States, 2019-1590 (US Fed Cir. 2019): Willful Failure to File FBAR – 50 Percent Penalty Applies

US v. Boyd, No. 19-55585 (9th Cir. Mar. 24, 2021): Only one penalty applies for untimely filing of FBAR reporting multiple foreign accounts

In United States v. Boyd, No. 19-55585 (9th Cir. Mar. 24, 2021), the U.S. Court of Appeals for the Ninth Circuit, in a case of first impression for the circuit, held that the IRS is limited to imposing one penalty for the untimely filing of a single accurate “Report of Foreign Bank and Financial Accounts” … Continue reading US v. Boyd, No. 19-55585 (9th Cir. Mar. 24, 2021): Only one penalty applies for untimely filing of FBAR reporting multiple foreign accounts

KPMG: Advance notice of proposed rulemaking pending OIRA review: Beneficial ownership reporting requirements (Mar. 23, 2021)

KPMG is reporting that OMB’s Office of Information and Regulatory Affairs (OIRA) reported that it has received for review from the U.S. Treasury Department an advance notice of proposed rulemaking concerning section 6403 and provisions for implementing the Corporate Transparency Act. Section 6403 is the main Code section relating to the new beneficial ownership information reporting requirements. … Continue reading KPMG: Advance notice of proposed rulemaking pending OIRA review: Beneficial ownership reporting requirements (Mar. 23, 2021)

IRS Practice Unit on Code Sec. 965 Transition Tax Updated (Mar. 23, 2021)

The IRS has updated its practice unit on the Code Sec. 965 Transition Tax. The summary is as follows: On December 22, 2017, IRC 965 was amended by “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” P.L. 115-97 (Tax Cuts … Continue reading IRS Practice Unit on Code Sec. 965 Transition Tax Updated (Mar. 23, 2021)

Bloomberg: Biden Determined to Tax Rich After Windfalls From Covid Crisis (Mar. 22, 2021)

Bloomberg News is reporting that President Biden is determined to increase taxes on the wealthy, with that determination being reinforced by reported windfalls experienced by the wealthy during the pandemic during the "K-shaped" recovery. The Bloomberg article begins as follows: President Joe Biden’s economic team at the White House is determined to make good on … Continue reading Bloomberg: Biden Determined to Tax Rich After Windfalls From Covid Crisis (Mar. 22, 2021)