Wealth Strategies Journal

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Author: dstaggs (page 1 of 2)

Tax Court Rules Home Purchase Price Doesn’t Include Necessary Repairs

The Tax Court recently upheld the IRS’ disallowance of a portion of a taxpayer’s first-time homebuyer credit.  Because repairs and replacement of appliances, though necessary to make the home habitable, do not amount to construction of the home, the purchase date is the day the taxpayer took title rather than … Continue reading

IRS Withdraws Portion of Regulation on Limitation of IRA Rollovers

The IRS has withdrawn a portion of a 1981 proposed regulation that would apply the IRS rollover limitation on an IRA-by-IRA basis.  The Tax Court recently held that the rollover limitation, limiting rolling distributions from one IRA to another, applies on an aggregate basis.  The withdrawal shows the IRS’s intent … Continue reading

Notice and Comment for Form 1041-A

To reduce paperwork and the burden on taxpayers, the IRS has issued notice and asked for comments on Form 1041-A, the information return for trust accumulation of charitable amounts.  All comments must be received by September 8, 2014.

See “Proposed Collection; Comment Request for Form 1041-A,” 79 Fed. Reg. … Continue reading

Citizens for Tax Justice Eye Revenue-Raising Options

Citizens for Tax Justice has outlined why an increase in federal revenue collection is appropriate and necessary, and suggested several tax policies to aid that goal.   These changes would mostly affect high-income persons, businesses, and multinational corporations.  Some of the larger revenue-increasing proposed changes include:

  • Taxing capital gains and
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New Regulations and Procedures for Small 501(c)(3) Organizations

The IRS has announced new temporary and proposed regulations providing a quicker process for eligible entities applying for 501(c)(3) tax-exempt status.  The temporary regulations, whose text mirrors the proposed regulations, relax the requirement that an organization filing for tax-exempt status must provide a statement supporting its claim.  Under the new … Continue reading

District Court Finds Former Wife Does Not Hold Property as Nominee

A U.S. District Court refused to find that a judgment lien from unpaid taxes  attached to property transferred by a taxpayer to his former spouse.  The court found she did not hold the property as nominee even though he continued to occupy the residence because, when the property was transferred … Continue reading

Tax Court Unable to Reduce Deficiency by Prior Years’ Overpayments

The Tax Court recently found itself without jurisdiction to reduce a deficiency by alleged overpayments of tax and uncashed refund checks from prior years not before the court.  Taxpayer was thus held liable for the deficiency and additions to tax for failure to timely file, failure to timely pay, and failure … Continue reading

Avoid Mixing Money and Family when Possible

A recent Washington Post article by Michelle Singletary answers questions on what to do when family and finances are  in jeopardy of being combined.  Her advice is to try your best not to mix them.  Help your family member find alternative housing or encourage them to save for secondary education rather … Continue reading

Tax Court Reconsiders Old Case on Trust’s Liability

The Tax Court reconsidered a previous opinion holding a trust liable as tranferee of the stock of four corporations.  The parties agreed that the trust should be liable for interest only after the date of liability notices.  The court held that a credit should reduce the tax liability where an … Continue reading

IRS Announces New Filing Season Program for Return Preparers

Following the D.C. Circuit Court of Appeals’ decision invalidating the IRS’ recent return preparer regulations, the IRS has announced a new filing season program for 2015.  Unenrolled return preparers will receive a record of completion when they complete various CE courses.  Those in compliance will be posted on an IRS … Continue reading

Tax Court Sustains Accuracy-Related Penalty in Summary Opinion

In a summary opinion, the Tax Court upheld an accuracy-related penalty against a taxpayer who claimed to have submitted information concerning cancellation of indebtedness income to his accountant, who then failed to include it on his return.  The Tax Court found nothing in the record, other than the taxpayer’s self-serving … Continue reading

IRS Determines Loan to ESOP is a Prohibited Transaction

The IRS ruled, in technical advice, that a loan to an ESOP was a prohibited transaction because it failed the requirements that would entitle it to an exemption from those rules.  The Department of Labor determined that using the principal-only method, rather than the principal and interest method, to determine … Continue reading

DC Circuit Court Rules Tax Court is Part of the Executive Branch

The D.C. Circuit recently held that the president’s removal power over Tax Court judges does not violate the constitutional principle of separation of powers because the Tax Court is part of the executive branch.  The ruling seems to conflict with the Supreme Court’s decision in Freytag v. Commissioner, 501 U.S. … Continue reading

IRS Issues Fact Sheet Concerning Offshore Account Reporting

The IRS has released Fact Sheet 2014-7 with detailed information on reporting laws for taxpayers with foreign accounts.  It advises taxpayers with foreign accounts to answer Part III of Schedule B.  Those whose account values exceed certain thresholds are required to attach Form 8938 to their tax returns. Taxpayers are … Continue reading

Regulations on the Political Activity of 501(c)(4) Organizations to Come in 2015

The Commissioner of the IRS, John Koskinen, has announced that new regulations concerning the political activity of 501(c)(4) organizations are forthcoming – by early 2015.  The new regulations should more clearly define political activity, determine to whom it applies, and answer the question of how much political activity is required … Continue reading

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