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SCACPA Podcast 022
Lynn Nichols Federal Tax Update Podcast
August 06, 2018, edition
Listen as Lynn Nichols provides commentary on 5 Items pertaining to current developments in U.S. tax law. This week's topics include:
- Commitment Fees Paid on Revolving Credit Agreement May Be Deducted
In field attorney advice, the IRS concluded that a taxpayer may deduct quarterly commitment fees it paid on its revolving credit agreement in the tax year in which they were incurred.
[Tax Notes Today; FAA 20182502F, 4/11/2018, rel.6/26/2018.]
- Widow Who Didn't Face Economic Hardship Denied Spousal Relief
The Tax Court denied a widow innocent spouse relief from joint tax liabilities with her late husband who unbeknown to her had failed to pay their taxes, finding that it was not unfair to hold her liable for the taxes because it did not cause her economic hardship and the tax payments were funded by her husband's life insurance proceeds.
[Hale, Kimberly R. v. Commissioner; No. 18664-14; No. 10262-15; T.C. Memo. 2018-93, 6/26/2018]
- IRS Revocation of ESOP Determination Was Abuse of Discretion
The Tax Court held that the IRS abused its discretion by revoking a final determination letter that said a corporation's employee stock ownership plan was qualified under section 401(a) and that the ESOP's related trust was exempt from tax under section 501(a).
[Val Lanes Recreation Center Corp. v. Commissioner; No. 24887-10R; T.C. Memo. 2018-92, 6/26/2018]
- Couple Denied Dependency, Foster Care Business Deductions
The Tax Court, in a summary opinion sustaining an accuracy-related penalty on some underpayments, held that a couple wasn't entitled to a dependency exemption deduction for the wife's father who lived in the Philippines and that they weren't entitled to deductions for their foster care activity beyond those allowed by the IRS.
[Kho, Rodrigo et ux. v. Commissioner; No. 7720-17S; T.C. Summ. Op. 2018-32, 6/27/2018]
- Lack of Economic Substance Leads to Disallowed Partnership Losses
The Tax Court, in consolidated partnership cases, sustained the IRS's disallowance of losses from transactions involving paired foreign currency options for lack of economic substance, but did not sustain accuracy-related penalties because the IRS failed to obtain written supervisory approval as required under section 6751.
[Endeavor Partners Fund LLC et al. v. Commissioner; No. 8698-12; No. 8710-12; No. 8721-12; No. 8846-12; No. 9975-12; No. 11290-12; No. 12591-12; T.C. Memo. 2018-96, 6/28/2018]
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By SCACPA Lynn NicholsLynn Nichols Federal Tax Update Podcast
August 06, 2018, edition
Listen as Lynn Nichols provides commentary on 5 Items pertaining to current developments in U.S. tax law. This week's topics include:
- Commitment Fees Paid on Revolving Credit Agreement May Be Deducted
In field attorney advice, the IRS concluded that a taxpayer may deduct quarterly commitment fees it paid on its revolving credit agreement in the tax year in which they were incurred.
[Tax Notes Today; FAA 20182502F, 4/11/2018, rel.6/26/2018.]
- Widow Who Didn't Face Economic Hardship Denied Spousal Relief
The Tax Court denied a widow innocent spouse relief from joint tax liabilities with her late husband who unbeknown to her had failed to pay their taxes, finding that it was not unfair to hold her liable for the taxes because it did not cause her economic hardship and the tax payments were funded by her husband's life insurance proceeds.
[Hale, Kimberly R. v. Commissioner; No. 18664-14; No. 10262-15; T.C. Memo. 2018-93, 6/26/2018]
- IRS Revocation of ESOP Determination Was Abuse of Discretion
The Tax Court held that the IRS abused its discretion by revoking a final determination letter that said a corporation's employee stock ownership plan was qualified under section 401(a) and that the ESOP's related trust was exempt from tax under section 501(a).
[Val Lanes Recreation Center Corp. v. Commissioner; No. 24887-10R; T.C. Memo. 2018-92, 6/26/2018]
- Couple Denied Dependency, Foster Care Business Deductions
The Tax Court, in a summary opinion sustaining an accuracy-related penalty on some underpayments, held that a couple wasn't entitled to a dependency exemption deduction for the wife's father who lived in the Philippines and that they weren't entitled to deductions for their foster care activity beyond those allowed by the IRS.
[Kho, Rodrigo et ux. v. Commissioner; No. 7720-17S; T.C. Summ. Op. 2018-32, 6/27/2018]
- Lack of Economic Substance Leads to Disallowed Partnership Losses
The Tax Court, in consolidated partnership cases, sustained the IRS's disallowance of losses from transactions involving paired foreign currency options for lack of economic substance, but did not sustain accuracy-related penalties because the IRS failed to obtain written supervisory approval as required under section 6751.
[Endeavor Partners Fund LLC et al. v. Commissioner; No. 8698-12; No. 8710-12; No. 8721-12; No. 8846-12; No. 9975-12; No. 11290-12; No. 12591-12; T.C. Memo. 2018-96, 6/28/2018]