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Federal Tax Update with Lynn Nichols #41

Federal Tax Update with Lynn Nichols #41

Update: 2019-06-04
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Lynn Nichols Federal Tax Update Podcast

June, 04 2019, Episode 41

Listen as Lynn Nichols provides commentary on 8 Items pertaining to current developments in U.S. tax law.

  1. Partnerships Can Defer Section 1231 Gain Under O-Zone Rules

Partnerships are allowed to defer capital gains under section 1231 at the entity level to take advantage of the Opportunity Zone program, according to a Treasury official.

[Tax Notes Today, 5/13/2019, Article by Eric Yauch]

  1. IRS Disciplinary Office Targets High-Risk Practitioners

The IRS Office of Professional Responsibility is focusing on practitioners deemed tax noncompliant and those assessed return preparation penalties for disciplinary action.

[Tax Notes Today, 5/13/2019, Article by Jonathan Curry]

  1. Tax Court Moves to Allow Limited Representation

The Tax Court hopes its new move to allow limited entries of appearance by practitioners will be helpful to pro se litigants.

[Tax Notes Today, 5/13/2019, Article by Andrew Velarde]

    Tax Court Issues Order, Form on Limited Appearances

The Tax Court issued an administrative order and sample form to permit admitted practitioners to enter a limited appearance at scheduled trial sessions beginning in the 2019 fall term.

     Tax Court Provides FAQ on Limited Appearance Procedures

The Tax Court released a list of frequently asked questions on procedures that permit admitted practitioners to enter an appearance on behalf of petitioners that is limited to specific dates during a scheduled trial session.

  1. Tax Court Holds IRS Notice Can’t Overturn Statute’s Plain Language

The Tax Court held that Medicaid waiver payments were not excludable from gross income under section 131 based on the plain language of the statute and an IRS notice could not reclassify the payments to deprive a couple of the earned income tax and additional child tax credits they claimed.

[Mary K. Feigh et vir v. Commissioner; No. 20163-17; 152 T.C. No. 15]

  1. Tenth Circuit Affirms ESOP Participants Were Related Persons

The Tenth Circuit affirmed a Tax Court decision that held the shareholders in an S corporation liable for deficiencies based on its finding that the S corporation and employees that participated in its employee stock ownership plan were related persons under section 267, so payroll expenses that accrued were not deductible until they were paid to employees.

[Steven M. Petersen et ux. et al. v. Commissioner; No. 17-9003; No. 17-9004]

 

  1. Sixth Circuit Affirms Estate, Widow Liable as Transferees

The Sixth Circuit affirmed a Tax Court decision that held an estate and a decedent’s widow liable as transferees for a bowling alley business’s unpaid income taxes stemming from the sale of the business in a midco transaction, finding that the Tax Court properly refused to respect several features of the form of the transaction.

[Billy F. Hawk Jr., GST Non-Exempt Marital Trust et al. v. Commissioner; No. 18-1534]

 

  1. Eleventh Circuit Upholds IRS Summonses for Attorney’s Bank Records

The Eleventh Circuit, in an unpublished per curiam opinion, affirmed a district court’s decision refusing to quash IRS summonses issued to a bank for an attorney and his law firm’s account records, finding that the arguments were rejected in a prior opinion in a related case that also sought to quash an IRS summons.

[Michael R. Presley et al. v. United States; No. 18-15091]

  1. Judge Upholds John Doe Summons on Law Firm

A Texas law firm failed to persuade a federal judge that the IRS abused the John Doe summons process by requesting information on clients who used the firm’s services to set up offshore accounts and entities.

[Tax Notes Today, 5/17/2019, Article by Kristen Parillo]

John Doe Summons Enforced for Information on Law Firm’s Clients

A U.S. district court granted the government’s petition to enforce an IRS John Doe summons issued to a law firm for information regarding clients who used the firm to set up foreign accounts and foreign entities to conceal taxable income, rejecting the firm’s abuse of process argument and its blanket assertion of the attorney-client privilege.

[Taylor Lohmeyer Law Firm PLLC v. United States; No. 5:18-cv-01161]

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Federal Tax Update with Lynn Nichols #41

Federal Tax Update with Lynn Nichols #41

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