S Corporations

This PodCast concerns guidance for Preparers of tax returns. The IRS celebrated the end of 2007 by releasing three Notices late on December 31 that provide guidance on the application of the revised preparer penalties contained in the Small Business and Work Opportunity Tax Act of 2007 that was passed last May.  The IRS had previously released interim relief in Notice 2007-54, but that relief was set to expire as 2007 did.The centerpiece of this guidance is Notice 2008-13, which provides interim guidance on applying the "6694 preparer penalty standards.  The interim rules are not nearly as onerous as many had feared they would be, and need to be incorporated rapidly into our practices as tax season approaches.  Note, as well, that this guidance applies only until the IRS releases revised regulations, something the notice indicates they plan to do during 2008.The materials for this podcast can be downloaded at http://www.edzollars.com/2008-01-01_6694.pdf .  Those materials include the full

.This PodCast is about end of 2007 tax bills. We look at highlights of three of the five bills affecting taxation that Congress passed prior to leaving town, specifically the Tax Increase Prevention Act of 2007, Mortgage Forgiveness Debt Relief Act of 2007 and Tax Technical Corrections Act of 2007, all three of which have provisions that should be of interest to many of your clients. The written materials for the podcast can be downloaded from http://www.edzollars.com/2007-12-29_New_Laws.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast is about the Self-Employed Health Insurance Deduction for S corporation owners. The IRS has issued Notice 2008-1 that details how an S corporation shareholder can qualify for the self-employed health insurance deduction under "162(l) even if the policy is in the name of the shareholder. The notice is at odds with the implication contained in IRS Headliner 163 issued in May of 2006 that seemed to many to strongly suggest that personal ownership of the policy was fatal to the deduction. We had previously discussed why, perhaps, that wasn't the case in a podcast back in June of 2006 that suggested listeners look at Revenue Ruling 61-146 and consider whether a similar program would not solve the problem the Headliner pointed out with individual policies. What the IRS has now done is, effectively, adopted that solution with official blessing. The materials can be downloaded from http://www.edzollars.com/2007-12-26_S_Corporation.pdf. >. This Podcast is sponsored by Leimberg Information Services, I

This PodCast is about changes to Circular 230.  Two days, two revisions:  the IRS on September 25 issued proposed regulations to revise Circular 230 "10.34, and the very next day finalized regulations that also made changes to the same provision (among others).  We take a look at both sets of changes, and their impact on tax practice. The materials can be downloaded from http://www.edzollars.com/2007-09-26_Circular_230.pdf .   This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast pertains to both the changes to Circular 230 paragraph 10.35 back in 2005 and the recent revisions to Section 6694. We review the penalties that can be imposed on a taxpayer.  We specifically examine  6662(b)(1)'s negligence and disregard of rules and regulations penalty and will later focus on the substantial understatement provisions of 6662(b)(2). The materials for this podcast can be found at http://www.edzollars.com/2007-06-29_Client_Side_Penalties.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast pertains to IRS Notice 2007-54 which grants partial relief from some of the changes made to the preparer penalties under Section 6694(a), delaying full implementation of the provisions until next year.  We discuss the extent of the relief granted, as well as some of the reactions to this change noticed in online discussion groups. The materials for this podcast, including the above notice, can be found at www.edzollars.com/2007-06-15_Delay_of_Game.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast is a follow-up to our last.  Kaye Thomas noted that though prior drafts of the bill and the Joint Committee's report on the bill indicated expanding the general rule on the Kiddie Tax one more year, that provision is not included in the final bill.  Rather, only the "student" provision is added to the bill. The materials have now been updated, and can be downloaded from the original link at http://edzollars.com/2007-05-25_New_Law.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This Podcast covers the first major tax bill of the 2007 Congress with changes that are meant to grant relief to small businesses, but which also have revenue raisers that will impact a number of clients.  The President has indicated he will sign the bill, so over the Memorial Day weekend we can all read up on the new law to start our summer.The materials are available for download at http://edzollars.com/2007-05-25_New_Law.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast examines Pediatric Affililates, P.A., (2007-1 USTC 50,477) where the Third Circuit Court of Appeals upheld the U.S. District Court of New Jersey's determination that the taxpayers were liable for unpaid payroll taxes that their payroll service had walked off with.  The case is instructive for the types of responsibilities under the tax law a taxpayer is unable to delegate to a third party.The materials can be downloaded at www.edzollars.com/2007-05-18_Payroll_taxes.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This Podcast is Part II in a discussion on Insurable Interest between Steve Leimberg and Randy Zipse of the John Hancock. This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This Podcast is the first in a 3 part series on Insurable Interest.  In this Podcast, Steve Leimberg and Randy Zipse of the John Hancock discuss the underlying philosophy and legal background.  In the following Podcasts, Steve and Randy will cover more specific situations such as the insurable interest between spouses, unmarried couples, parents and children, partners and their partnerships, and employers and employees. This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast pertains to what must be done to otain certain income tax benefits for Code Sections 469, 179, 1362/1375 and 1402.  Congress doesn't necessarily make the law work as consistently as practitioners would like it to work.  This PodCast examines these four different Code provisions and their somewhat different view on whether "enough" is being done to get a tax benefit.The materials for the podcast can be found at http://edzollars.com/2007-02-17_Passive.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast is about the simplified method that businesses can elect to use to compute the amount of their refund for the federal long distance excise tax that the IRS finally agreed the law did not allow them to collect.  The simplified method is elective, and uses April and September 2006 phone invoices to compute a percentage that is applied to all telephone expense throughout the relevant period.Materials, including the IRS notice and questions and answers, can be downloaded at http://edzollars.com/2006-11-18_Telephone_Tax_Refund.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast examines a provision buried in the Pension Protection Act of 2006 that involves "employer" owned life insurnace.  The provision in question renders the death benefit taxable to the extent it is greater than the premiums paid unless the policy both falls into certain excepted categories and the policy owner takes specific steps before the policy is issued to assure that the insured both gets proper notice and gives a proper consent.The materials are found at http://edzollars.com/2006-08-12_Life_Insurance.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This PodCast is about taxpayer advice and its reliability and its credibility in court.  Taxpayers get their advice from a lot of sources, and we often end up having to defend our own advice against other sources.  This week we have two cases that show that all advice is not created equal.  In the case of Lehrer v. Commissioner (TC Memo 2006-156) a taxpayer learned the hard way that selecting a preparer predominantly on which one computes the lowest tax is not necessarily the best way to end up well advised.And the case of Diem v. Commissioner (TC Summary 2006-121) is useful for those clients that will try and check your advice by calling the IRS for an answer and then reporting the IRS's answer to you (so, you know, you don't have to do any work on that one).  Mr. Diem was clobbered when it turned out an IRS employee's assurance that the program offered by his employer would be treated just like the workers compensation style claim he was giving up for tax purposes turned out not to be so

This PodCast concerns reasonable cause for late filing.  The logic of the application of the IRC to specific situations at times seems to defy common logic. Here, we look at a specific example of such.  In this case, the Tax Court decided that a reasonable cause for late filing that allowed a taxpayer to avoid the late filing penalty was that the court believed the taxpayer in reality had mailed the return on time, even if as a matter of law the return was late filed.  This is an extension of the issue discussed in the October 2005 podcast on proving timely filing.The case in question is Gregorian v. Commissioner, TC Summary 2006-99.The materials can be downloaded from http://edzollars.com/2006-07-15_Late_Filing.pdf .Apologies for some of the audio glitches.  For various reasons, this week I used my Windows laptop to record the podcast--and, as should be clear, the machine proved "suboptimal" even though it used the same tools (hardware and software) as the old Mac iBook I normally us

This PodCast is about the tax implications of a prepaid purchase discount that may need to be refunded if purchase goals are not met.  The issue has resurfaced as the Ninth Circuit Court of Appeals reversed the Tax Court in the case of Westpac Pacific Foods v. Commissioner.  The Ninth Circuit's views on this topic differ both from those of the Tax Court and the IRS, each of which has it own views on this topic.In the podcast, the question to be addressed is what do we tell our clients who are faced with this issue?  The materials for this podcast can be downloaded from http://edzollars.com/2006-07-08_Westpac_Advances.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This Podcast is about construction costs.  We take a look at the regulations under Section 199 as they define construction found at Regulation 1.199-3(m).  These definitions are key for anyone who works with clients in construction related entities.  The materials for this podcast can be downloaded at http://edzollars.com/2006-07-01_Construction.pdf . This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com

This Podcast is about the importance of following proper form in corporate debt situations.  A few weeks ago (back in April) we looked at the case of Ruckreigel where a taxpayer lost an IRS challenge on whether a debt was truly from the shareholders to the corporation due to a failure to follow the necessary formalities.  This week, the taxpayers strike back with a taxpayer victory in the case of Miller v. Commissioner (TC Memo 2006-125) where the IRS fails in its attempt to reclassify debt that followed the proper form but which the IRS attempted to claim was really debt from the bank to the corporation.The taxpayer achieved victory on this point and the issue of whether the taxpayer was truly at risk as defined in Section 465, even though when all was said and done the taxpayer got out of all liability as the debt was actually paid by other investors who had guaranteed the entire loan structure.  This is an interesting case in showing the extreme importance of following proper form because, f

The IRS on May 15 issued a "Headliner" on their website directed at tax professionals that attempted to explain the treatment of policies purchased by a single employee shareholder of an S corporation in the shareholder's own name.In this podcast we look at the headliner, and consider whether Revenue Ruling 61-146 offers an option that solves the problem this ruling points out.The materials can be downloaded at http://edzollars.com/2006-06-10_Medical_S_Corporation.pdf. This Podcast is sponsored by Leimberg Information Services, Inc. at http://www.leimbergservices.com Please visit our software, books, and PowerPoint Presentations site at http://www.leimberg.com