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Federal Tax Update with Lynn Nichols #32

Federal Tax Update with Lynn Nichols #32

Update: 2019-02-20
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Lynn Nichols Federal Tax Update Podcast

February, 20 2019, Episode 32

Listen as Lynn Nichols provides commentary on 7 Items pertaining to current developments in U.S. tax law. This week’s topics include:

  1. Split Circuit Court Affirms Partnership’s Fee Awards

The government can be ordered to pay attorney fees under the qualified offer rule in a partnership proceeding under the 1982 Tax Equity and Fiscal Responsibility Act, the Federal Circuit held.

[Tax Notes Today; 2/11/2019, Article by Stephanie Cummings]

 

Federal Circuit Affirms Award of Litigation Costs to Partnership

The Federal Circuit affirmed a Court of Federal Claims decision that awarded a partnership litigation costs under section 7430 in its challenge to an untimely notice of final partnership administrative adjustment, holding that the partnership qualified as the prevailing party, that the amount of tax liability was in issue, and that the partnership incurred litigation costs.

[BASR Partnership et al. v. U.S.; Fed Cir, No. 17-1925, 2/8/2019]

 

DOJ Alerts Federal Circuit to Tax Court Order Related to Appeal

The government, in its appeal of a Court of Federal Claims decision that awarded litigation costs to a partnership, alerted the Federal Circuit to a recent Tax Court order that disagreed with the Court of Federal Claims and held that the qualified offer rule in section 7430 did not apply in a partnership proceeding because the amount of tax liability was not in issue.

[HURFORD INVESTMENTS NO. 2, LTD., HURFORD MANAGEMENT NO. 2, LLC,

 

 

 

  1. Eleventh Circuit Affirms Conviction for Making False Claim to IRS

The Eleventh Circuit, in an unpublished per curiam opinion, upheld an individual’s conviction for making a false claim to the IRS and corruptly impeding the administration of the internal revenue laws, finding that there was sufficient evidence that she fraudulently obtained a refund and moved the proceeds to evade detection and recovery by the IRS.

[U. S. v. Ingrid McBride Rich; CA 11, No. 17-15767, 2/12/2019]

 

  1. Florida Tribe Seeks Review of Decision Holding Distributions Taxable

The Miccosukee Tribe of Indians of Florida petitioned the Supreme Court for review of an Eleventh Circuit decision that held that distribution payments a tribe member received from the tribe’s gaming activities are not exempt from taxation, arguing that the payments were exempt as Indian general welfare benefits.

[Miccosukee Tribe of Indians of Florida v. United States;   CA 11, No. 18-395, 1/7/2019]

 

  1. IRS Addresses Bonus Depreciation Anomaly for Luxury Autos

The IRS has outlined procedures that will allow passenger car owners eligible for bonus depreciation to deduct depreciation during the recovery period that they wouldn’t otherwise have been able to.

[Tax Notes Today; 2/14/2019, Article by Emily Foster]

 

IRS Provides Safe Harbor for Autos Eligible for Bonus Depreciation

The IRS has issued guidance (Rev. Proc. 2019-13) providing a safe harbor accounting method for determining depreciation deductions for passenger automobiles that qualify for the 100 percent additional first-year depreciation deduction under section 168(k) and that are subject to the depreciation limitations under section 280F(a).

[Rev. Proc. 2019-13; 2019-9 IRB 1, 2/13/2019]

 

  1. AICPA Seeks Small Business Relief From Tax Shelter Definition

The American Institute of CPAs has asked that small businesses meeting specified conditions be excluded from the definition of a tax shelter so that they can obtain the benefits of the simplifying provisions of the Tax Cuts and Jobs Act.

[Letter Re: Small Business Relief from Definition of Tax Shelter, AICPA 2/13/2019]

 

  1. IRS Now Asking About Negative Partnership Tax Capital Accounts

The IRS’s ongoing interest in partners with negative tax basis capital accounts in partnerships has resulted in new instructions for filling out partnership tax returns.

[Tax Notes Today; 2/15/2019, Article by Nathan Richman]

 

  1. Individual Entitled to Alimony Deduction for Arrearages Paid

The Tax Court held that an individual was entitled to an alimony deduction for alimony arrearages he paid to his former wife after a state court ordered him to do so or go to jail, finding that the arrearages maintained their character as alimony and were paid under a contempt order, not a money judgment as the IRS claimed.

[Jeffrey Siegel; No. 27572-16; T.C. Memo. 2019-11]

 

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Federal Tax Update with Lynn Nichols #32

Federal Tax Update with Lynn Nichols #32

SCACPA