Lynn Nichols Federal Tax Update Podcast October, 07 2019, Episode 49

Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law.

1. Lack of Safe Harbor in Proposed Accounting Regs Chafes Tax Pros

Practitioners are disappointed by the absence of goods sold offsets and a financial accounting percentage of completion method safe harbor in newly proposed regulations on the Tax Cuts and Jobs Act's tax accounting provisions.

[Tax Notes Today, 9/9/2019, Article by Nathan J. Richman] 

Automatic Consent Procedures Issued for Accounting Rule Changes

The IRS has issued procedures (Rev. Proc. 2019-37) for obtaining automatic consent to change accounting methods to comply with section 451 and recently released proposed regulations under reg. section 1.451-3 (REG-104870-18) and 1.451-8 (REG-104554-18).

[Rev. Proc. 2019-37; 2019-39 IRB 1, 9.6.2019]

 

1. IRS Publishes Proposed Regs on Exempt Organization Donor Disclosures

The IRS has published proposed regulations (REG-102508-16) updating the section 6033 reporting regulations for tax-exempt organizations to reflect amendments to the provision, including changes regarding donor disclosures under prior guidance.

[REG-102508-16; 84 F.R. 47447-47454, 9/10/2019]

 

1. IRS Not Responsible for Paying Return Preparer's Fee from Refund

The Court of Federal Claims dismissed for lack of jurisdiction a return preparer's suit alleging that the government must pay the tax return preparation fee his client promised to pay from his refund, because the IRS must remit tax refunds to the taxpayer, not the tax return preparer, and is not bound by the agreement with his client.

[Prakash Narayan; No. 1:19-cv-00442, 9/5/2019]

 

1. IRS Built-In Gain and Loss Rules Eliminate a Safe Harbor Option

Proposed regulations that limit a corporation's losses following a change in ownership could be more restrictive for some companies by eliminating an option for computing built-in gain and loss.

[Tax Notes Today, 9/10/2019, Article by Emily Foster]

     IRS Publishes Proposed Regs on Built-In Gain and Loss

The IRS has published proposed regulations (REG-125710-18) on the items of income and deduction that are included in the calculation of built-in gains and losses under section 382. Comments and hearing requests are due by November 12.

     [REG-125710-18; 84 F.R. 47455-47473, 9/10/2019]

 

 

1. Audits of Partnerships That Cease to Exist Could Have Odd Results

Partners who were owners of an entity just before it ceased to exist could be on the hook for adjustments related to other partners who exited the scene earlier, under the centralized audit regime.

[Tax Notes Today, 9/11/2019, Article by Eric Yauch]

 

1. Student Liable for Taxes After Winning Car for Good Grades

The Tax Court, in a designated order, held that the value of a car that a high school student won when she was entered in a drawing for students with good grades and attendance was includable in her income and she is liable for a tax deficiency, finding that the value of the car was not excludable as a gift under section 102 or as a prize under section 74.

[Alejandra Conyers; No. 13969-18, 9/11/2019]