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1. Proposed regs. would eliminate 36-month testing period from COD reporting requirements   WebExclusive

BY Sally P. Schreiber, J.D.
Because the IRS believes that requiring the filing of Form 1099-C, Cancellation of Debt, at the expiration of a 36-month nonpayment of debt testing period “creates confusion for taxpayers” and does not increase tax compliance, the Service released proposed regulations to eliminate the rule (REG-136676-13).Under Sec. 6050P and its regulations, cancellation-of-debt (COD) income of $600 or more must be reported on Form 1099-C when any of eight identifiable events occur.

2. Certain FATCA deadlines are postponed   WebExclusive

BY Sally P. Schreiber, J.D.
The IRS announced its intention in Notice 2014-59 to amend temporary regulations it issued under the Foreign Account Tax Compliance Act (FATCA) on March 6, 2014, to modify the effective dates of (1) the standards of knowledge that apply to a withholding certificate or documentary evidence to document a payee that is an entity under Regs.

3. Changes made to IRS streamlined offshore compliance procedures   WebExclusive

BY Sally P. Schreiber, J.D.
The IRS updated its streamlined offshore compliance program to provide procedures taxpayers residing both inside and outside the United States should use to participate in the program. The streamlined offshore compliance program is for taxpayers whose failure to comply with requirements to report offshore assets is nonwillful. It is designed to allow U.S.

4. Notice defines terms for economic substance doctrine   WebExclusive

BY Sally P. Schreiber, J.D.
On Thursday, the IRS provided guidance defining "transaction" for purposes of applying the Sec. 7701(o) economic substance doctrine and "similar rule of law" for purposes of the Sec. 6662(b)(6) accuracy-related penalty (Notice 2014-58). The economic substance doctrine is a common law judicial doctrine that disallows tax benefits of a transaction if the transaction lacks economic substance or a business purpose.

5. AICPA asks for raise in repair regulations’ de minimis safe harbor threshold   WebExclusive

BY Alistair M. Nevius, J.D.
Jeffery Porter, CPA, chair of the AICPA’s Tax Executive Committee, wrote to Andrew Keyso, IRS associate chief counsel, on Wednesday, raising the AICPA’s concerns about the low amount of the de minimis safe harbor threshold in the tangible property regulations (T.D. 9636) that were issued in September 2013, and about the retrospective application of the new rules.

6. Asset protection of retirement funds after Clark   CPEDirect

BY Daniel S. Rubin, Esq.
What’s in a name? According to the U.S. Supreme Court, nothing.In June, the Supreme Court in Clark v. Rameker, No. 13-299 (U.S. 6/12/14), said that just because funds are held in an account called an individual retirement account (IRA), it doesn’t necessarily mean that they are retirement funds.

7. Federal courts disagree on premium tax credits through federal exchanges  

BY Sally P. Schreiber, J.D.
The IRS will continue processing credit claims despite one circuit’s decision overruling a key Affordable Care Act provision.The appellate courts for the D.C. Circuit and the Fourth Circuit issued conflicting decisions on July 22 regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health insurance on exchanges set up by the federal government.

8. Goodwill not distributed to sole shareholder  

BY Matthew Schippers, CPA, CGMA
The Tax Court finds that a family trucking business did not distribute appreciated intangible assets under Sec. 311(b).The Tax Court held that a trucking company’s alleged goodwill was personally owned by its sole shareholder, and therefore the trucking company had no goodwill asset to transfer. Because goodwill was not distributed to the shareholder, he did not transfer it to his sons and therefore was not required to have filed a gift tax return.Facts: Bross Trucking Inc.

9. Giant Eagle’s advance deductions grounded  

BY Karen M. Cooley, CPA, MBA and Darlene Pulliam, CPA, Ph.D.
No deduction or gross profit offset is allowed for discounts offered on future fuel purchases by customers under a customer loyalty program.The Tax Court held that a taxpayer was not entitled to deduct the estimated future cost of fuel discounts earned by its customers until those discounts were redeemed.

10. Qualified lessee construction allowances  

BY Alistair M. Nevius
Under Sec. 110, certain businesses that are tenants of a retail space may exclude from gross income amounts received from the lessor of the space to construct or improve real property used in the taxpayer’s trade or business. This safe harbor applies where the lease is for 15 years or less (including options to renew) and the property improved or constructed is nonresidential real property that is not Sec.
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