DiscoverSCACPA's Weekly Federal Tax UpdateFederal Tax Update with Lynn Nichols #35
Federal Tax Update with Lynn Nichols #35

Federal Tax Update with Lynn Nichols #35

Update: 2019-03-20


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. 

  1. 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]


  1. 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]


  1. 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]


  1. 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]


  1. 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]


  1. 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]


  1. 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]


  1. 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]


  1. 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]


  1. 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]









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Federal Tax Update with Lynn Nichols #35

Federal Tax Update with Lynn Nichols #35