See "Assets Transferred to Family Limited Partnership Not Includable in Gross Estate" 2010 TNT 23-6, February 3, 2010.

Posted by Evan L. Abrams, Esq., Associate Editor, Wealth Strategies Journal 

....

Anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read the 80-page document, The Truth about Frivolous Tax Arguments.

.... It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.

Congress in 2006 increased the amount of the penalty for frivolous tax returns from $500 to $5,000. The increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.

IRS highlighted in the document about 40 new cases adjudicated in 2009. Highlights include cases involving injunctions against preparers and promoters of Form 1099-Original Issue Discount schemes and injunctions against preparers and promoters of false fuel tax credit schemes.

To view the original press release, please click here. 

Posted by Joshua Hock, Associate Editor, Wealth Strategies Journal

WASHINGTON -- A Certified Public Accountant has been suspended for twelve months from practice before the Internal Revenue Service by the Office of Professional Responsibility for providing false or misleading information in connection with the preparation of his clients' tax returns. 

"Practitioners have a duty both to their clients and to the system to insure taxpayers are complying with tax laws and filing complete and accurate tax returns," Karen L. Hawkins, Director of the Office of Professional Responsibility said.

Robert A. Loeser, a certified public accountant from Houston, Texas, assisted his clients to lower their tax bills by claiming false business expenses on tax returns he prepared.

For no legitimate business purpose, Loeser's clients were advised to forward funds from their businesses to two corporations Loeser controlled. The corporations then rebated the funds to his clients.  Loeser prepared the clients' books and business tax returns expensing and deducting the entire amounts that were paid to the corporations.

... 

The settlement agreement included a disclosure authorization that allowed the Office of Professional Responsibility to issue this release.

...

To view the entire press release, please click here. 

Posted by Joshua Hock, Associate Editor, Wealth Strategies Journal

Tax Tip 2010-26 lists eight important facts about this deduction:

1. State and local sales and excise taxes paid on up to $49,500 of the purchase price of each qualifying vehicle are deductible.

2. Qualified motor vehicles generally include new cars, light trucks, motor homes and motorcycles.

3. To qualify for the deduction, the new cars, light trucks and motorcycles must weigh 8,500 pounds or less. New motor homes are not subject to the weight limit.

4. Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.

5. Purchases made in states without a sales tax -- such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon -- may also qualify for the deduction. Taxpayers in these states may be entitled to deduct other qualifying fees or taxes imposed by the state or local government. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle's sales price or as a per unit fee.

6. This deduction can be taken regardless of whether the buyers itemize their deductions or choose the standard deduction. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.

7. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

8. Taxpayers who do not itemize must complete Schedule L, Standard Deduction for Certain Filers to claim the deduction.

For more information about these rules and other eligibility requirements visit IRS.gov/recovery.

YouTube Video:

Vehicle Tax Deduction-Claim It: English | Spanish | ASL

Posted by Joshua Hock, Associate Editor, Wealth Strategies Journal

"This outline covers significant developments involving federal income taxation along with a few other related topics that the author finds interesting, curious, or worthy of comment. It is not intended to provide exhaustive coverage, but it offers a selective treatment of developments likely to interest practitioners and advisors with a broad range of professional practices. Information presented is current as of November 25, 2009. A prior version of this outline was prepared for the Great Plains Tax Institute in Omaha, Nebraska (December 3, 2009)."

Posted by Patrick Siegfried, Associate Editor, Wealth Strategies Journal.

Posted by Patrick Siegfried, Associate Editor, Wealth Strategies Journal.

"This paper is intended to add to the understanding of the ways in which income from various sources changes with age for the very wealthy. It makes use of a special longitudinal panel of U.S. income tax data linked to wealth data reported on U.S. estate tax returns fi led for wealthy decedents. The relatively high estate tax fi ling threshold places these individuals at the top of the U.S. wealth distribution. Combined income and wealth data in the Statistics of Income Family Panel Decedent Dataset (FPDD) allow investigation of changes in the composition of realized income over time and also provide insights into asset management strategies employed by this elite group. In addition, this paper investigates the relationship between income and end-of-life wealth through the use of the portfolio data reported on the estate tax returns. Due to the limitations of the tax data, it incorporates data from the U.S. Survey of Consumer Finances to estimate these panel members' place in the overall U.S. distributions of income and wealth."

Posted by Patrick Siegfried, Associate Editor, Wealth Strategies Journal.

See "IRS Issues Guidance Clarifying Treatment of Transfers in Trust" 2010 TNT 22-7, February 2, 2010.

Posted by Evan L. Abrams, Esq., Associate Editor, Wealth Strategies Journal 

See Linda Levine, "CRS Report Reviews Qualified Tuition Programs," 2010 TNT 22-21, January 28, 2010.

Posted by Evan L. Abrams, Esq, Associate Editor, Wealth Strategies Journal.

At the hearing, Senator Max Baucus supported the President's 2011 budget proposal for creating incentives for hiring new employees and incentivizing small business investment.   

See "Geithner Defends Bank Tax, Jobs Plan at Senate Finance Hearing" 2010 TNT 22-2, February 2, 2010; "Baucus Endorses Obama's Budget For Estate Tax Certainty Hiring Credit" 2010 TNT 22-27, February 2, 2010.

Posted by Evan L. Abrams, Esq., Associate Editor, Wealth Strategies Journal 

Part II of this Note will briefly discuss common methods of assisted reproductive technology (hereinafter ART). Part III will introduce the ideas of Professor Chester, who was asked by Professor Lawrence Waggoner, Reporter for the Uniform Probate Code, to revise section 2-108 of the Revised Uniform Probate Code. This Note will explain why the drafters of the UPC were right to reject the 'consent in a record' requirement. Primarily, the analysis will focus on the incompatibility of requiring decedent's intent in an intestacy statute, as well as the incompatibility of requiring decedent's consent to conception in a legal context where it is irrelevant. It will also focus on Equal Protection analysis, including the argument set forth by Julie Goodwin in her 2005 article.

Part IV will argue that Chester's 'consent in a record' requirement is inferior to the concept of a presumption of intent, rebuttable by clear and convincing evidence, for decedents who have voluntarily deposited genetic samples for use by their spouses. This Note will explain in detail that; first, a rebuttable presumption of intent is more consistent with the likely actions of a reasonable person; second, a rebuttable presumption of intent does not present any Constitutional issues; and third, a rebuttable presumption of intent will help to alleviate the burden on society's resources. Finally, in Part V, this Note will conclude by agreeing with the drafters of the UPC that the rebuttable presumption of intent should apply only in the cases of married decedents who have voluntarily deposited genetic material for the use of their spouses."

Contrary predictions of experts, the estate tax has been repealed. There is currently no Federal estate tax. Has this changed estate planning? Should wills be reviewed, to all rational expectations and the and how should they be modified? What if the estate tax returns, as so many experts continue to expect? How can plans remain flexible enough to cover the many potential scenarios that lie ahead? Let's look at the rules and COLA adjustments for 2010."