The IRS has issued proposed regulations under Code Sec. 2801 to implement a new tax on transfers of property from individuals who abandon U.S. citizenship or residency (a “covered expatriate”) and who later make a gift or bequest to a U.S. taxpayer (individual or U.S. trust). The tax applies to transfers of property on or after June 17, 2008 from an individual who expatriated on or after that same date. (more…)
Following the lead of the U.S. Department of Health and Human Services (HHS), the IRS has announced that employer-sponsored plans that fail to provide substantial coverage for inpatient hospitalization or physician services do not provide minimum value under the Affordable Care Act (ACA). The guidance from the IRS includes transition relief for eligible employer-sponsored plans. (more…)
The IRS has released proposed regulations intended to help taxpayers claim the Code Sec. 199 domestic production activities deduction. The IRS provided guidance on materials manufactured, produced, grown, or extracted (MPGE) for purposes of the deduction. (more…)
The IRS has issued more guidance about the Multiemployer Pension Reform Act (MPRA), which allows, in certain circumstances, the suspension of benefits. At the same time, opponents of the MPRA are trying to persuade Congress to repeal the law. (more…)
The IRS has announced the simplified per diem rates that taxpayers can use to reimburse employees for expenses incurred during travel after September 30, 2015. The high-cost area per diem increases to $275 and the low-cost area per diem increases to $185, the IRS reported. (more…)
In two recent cases, whistleblowers have had success before the Tax Court. In one case, Tax Court granted motions to compel production of documents filed by three whistleblowers — individuals who informed the government about a tax evasion scheme-whose reward claims the IRS had denied. In another case, the Tax Court found that the whistleblower statute does not require that a whistleblower first bring his or her information to the IRS Whistleblower Office to be eligible for an award. (more…)
Gross income is taxed to the person who earns it by performing services, or who owns the property that generates the income. Under the assignment of income doctrine, a taxpayer cannot avoid tax liability by assigning a right to income to someone else. The doctrine is invoked, for example, for assignments to creditors, family members, charities, and controlled entities. Thus, the income is taxable to the person who earned it, even if the person assigns the income to another and never personally receives the income. The doctrine can apply to both individuals and corporations. (more…)
Foreign travel expenses may be subject to allocation if the taxpayer engages in personal activities while traveling on business. A portion of the foreign travel expenses may be nondeductible if the individual engages in substantial non-business activity. The allocation rules apply where the individual engages in substantial non-business activity at, near, or beyond the business destination; or, when the personal destination is en route to and from the business destination. (more…)
The approach of year-end 2015 makes it tax planning season. Tax law developments in 2015 can affect, for example, the deduction of costs and expenses, the treatment of contributions to tax-favored accounts, and the inclusion of certain benefits in income. Traditional year-end planning techniques for investments and retirement are also important. Small businesses also have some tools for year-end tax planning. Although it may seem early to contemplate year-end planning, the remaining weeks of 2015 will pass quickly and taxpayers need to be proactive. (more…)
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