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)
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
Pallav Raghuvanshi, of Greenberg Traurig LLP, has have made available for download his article, "Corporate Tax Hikes for Biden’s Infrastructure Plan," published in a Greenberg Traurig Alert. The abstract is as follows: On March 11, 2021, two tax reform Bills (the Stop Tax Haven Abuse Act and the No Tax Breaks for Outsourcing Act) were introduced in both the House and the Senate … Continue reading Pallav Raghuvanshi (Greenberg Traurig LLP): Corporate Tax Hikes for Biden’s Infrastructure Plan (April 2, 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)
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)
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)
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)
The IRS has updated its Practice Unit on the sale of a partnership interest. The overview is as follows: When a sale of a partnership interest occurs, the entity theory is the underlying concept, not the aggregate theory. This means the ownership interest a partner has in a partnership is treated as a separate … Continue reading IRS Practice Unit on Sale of Partnership Interest Updated (March 12, 2021).
Caylor Land & Dev. v. Commissioner, T.C. Memo 2021-30 (Mar. 10, 2021), the IRS determined that a captive insurance company failed to distribute risk and was not selling insurance in the commonly accepted sense. In Caylor Land & Dev., the family that owned a construction business satisfied it's need for insurance with a micro-captive insurer. … Continue reading Caylor Land & Dev. v. Commissioner, T.C. Memo 2021-30 (Mar. 10, 2021): Captive Insurance Company Did Not Distribute Risk
Treasury and the IRS issued corrections to final regs on withholding of tax and information reporting for certain dispositions of interests in partnerships engaged in a US trade or business. To see corrected final regs, click TD 9926: Corrected Final Regs Re Tax Withholding for Foreign Persons Disposing of US Partnership Interests (Mar. 8, 2021).
The Wall Street Journal has published an article, "Some Democratic Lawmakers Push for Wealth Tax on New York Billionaires," which discusses New York state lawmakers' new income tax collection plan. The article begins as follows: New York state lawmakers are considering an unprecedented form of wealth tax as they search for revenues to plug a budget … Continue reading The Wall Street Journal: Some Democratic Lawmakers Push for Wealth Tax on New York Billionaires (February 18, 2021)
Ashish Agarwal, Shannon Chen, and Lillian F. Mills, of University of Texas at Austin - Red McCombs School of Business; University of Arizona - Department of Accounting; and University of Texas at Austin - McCombs School of Business, have made available for download their article, "Entity Structure and Taxes: An Analysis of Embedded Pass-Through Entities," … Continue reading Ashish Agarwal, Shannon Chen, and Lillian F. Mills: Entity Structure and Taxes: An Analysis of Embedded Pass-Through Entities (August 16, 2020)
Forbes has published an article, "Is A Major IRS Crackdown On Partnerships Looming?" which discusses the important change in partnership returns in the draft 2020 Instructions for Form 1065. The summary of the article is as follows: A partnership is considered to be a “taxpayer” even though it will generally not be paying federal income tax. … Continue reading Forbes: Is A Major IRS Crackdown On Partnerships Looming?
Sally P. Schreiber, of the Journal of Accountancy, has published her article, titled "Rules govern withholding on transfers of partnership interests and ECI." The article begins as follows: The IRS finalized regulations on the operation of Sec. 1446(f), which requires withholding on the transfer of a partnership interest described in Sec. 864(c)(8) (gain or loss of foreign persons from … Continue reading Sally P. Schreiber: Rules govern withholding on transfers of partnership interests and ECI (October 8, 2020)
Ithi Joshi, of Dunlap Bennett & Ludwig PLLC, has made available for download her article, Does my Company Lose its S-Corp Election if a Shareholder Dies?, published in JDSUPRA. The abstract is as follows: S-Corp tax treatment continues to be a popular choice for many business corporations as they seek favorable tax treatment of business income. The S-Corp status … Continue reading Ithi Joshi (Dunlap Bennett & Ludwig PLLC): Does my Company Lose its S-Corp Election if a Shareholder Dies? (September 24, 2020)
The IRS has issued final regulations (T.D. 9914) as guidance on the definition of an eligible terminated S corporation and rules relating to distributions of money by such a corporation after the post-termination transition period. To see final regs, click Final Regs - T.D. 9914: Eligible Terminated S Corps (Sept. 15, 2020).
The IRS Large Business and International (LB&I) division has released a series of practice units for IRS agents, which are a resource on substantive topics for agents, on S corp distributions of accumulated earnings and profits. See the IRS Practice Units Below: Distributions with accumulated earnings & profitsGeneral overview of accumulated earnings & profits
The Treasury Department and the IRS are proposing updates to the partnership form for tax year 2021 (filing season 2022). The updates will provide greater clarity for partners on how to compute their U.S. income tax liability with respect to international tax matters, including how to compute deductions and credits. The redesigned form and instructions … Continue reading IRS News: Proposed International Changes to Form 1065, U.S. Return of Partnership Income for Tax Year 2021
Edward A. Morse has made available for download his paper, Important Developments in Federal Income Taxation. The Abstract is as follows: This outline covers significant developments in federal income taxation along with a few other interesting or noteworthy tax topics arising during the preceding calendar year. It offers a selective treatment focusing on items likely … Continue reading Edward A. Morse, Important Developments in Federal Income Taxation (Dec. 5, 2019)
BDO Seidman has published an article on its website about CARES Act relief for partnership filings. Its article begins as follows: General Rules for Amending Partnership ReturnsPrior to 2018, partnerships were generally subject to unified partnership audit and litigation rules enacted by the Tax Equity and Fiscal Responsibility Act of 1982, commonly referred to as … Continue reading BDO Seidman: IRS Provides Welcome Relief for Partnership Filings to Obtain CARES Act Benefits