Show notes
Lynn Nichols Federal Tax Update Podcast
Feb. 19, 2018, edition
Listen as Lynn Nichols provides commentary on 10 Items pertaining to current developments in U.S. tax law. This week's topics include:
Partnerships pushing out adjustments to partners under the new centralized partnership audit regime must do so within 45 days of receiving a final partnership adjustment, even if they are seeking judicial review.
[Tax Notes 2/5/2018, Article by Matthew Madara]
The IRS released a practice unit on adjustments to an S corporation shareholder's debt basis in various circumstances, explaining why shareholders must track stock basis and debt basis separately.
[SCO/C/53_4_2_2-05 (2016)]
The Tax Court rejected an S corporation shareholder's argument that the section 1366 back-to-back loan rules eliminated the requirement to demonstrate an actual economic outlay, concluding that proving bona fide indebtedness is essential.
The Tax Court determined that the IRS properly reduced an S corporation owner's allowable net operating loss carryback, finding that the controlling test still requires the basis in an S corporation's debt to have "bona fide indebtedness . . . that runs directly to the shareholder"; the court held that the S corporation's debt was not bona fide.
[Meruelo, Homero F. v. Commissioner; No. 1795-13; T.C. Memo. 2018-16; 2/5/2018]
The Tax Court held that a corporation whose sole shareholder and employee was a physician can't deduct expenses for the purported rental of part of the physician's home, finding that the corporation failed to prove that it had a bona fide rental arrangement rather than an arrangement to make mortgage payments on the physician's behalf for his home.
[Christopher C.L. Ng MD Inc. APC v. Commissioner; No. 13696-16; T.C. Memo. 2018-14]
The Tax Court, in a summary opinion, sustained the IRS's determination that a couple's business expense deductions for expenses incurred to repair their commercial rental property were depreciable capital expenditures, finding that they failed to prove the disputed expenses were for deductible repairs.
[Brown, Brandon et ux. v. Commissioner; No. 2809-16S; T.C. Summ Op. 2018-6, 2/5/2018]
Treasury is prioritizing 18 guidance projects, including new rules on passthroughs and electing small business trusts, as part of its plans to implement the Tax Cuts and Jobs Act.
[Tax Notes 2/8/2018; Article by Matthew Madara and Fred Stokeld]
In a brief for the Fifth Circuit, the government argued that a district court correctly followed the Supreme Court's decision in United States v. Boyle, 469 U.S. 241 (1985), and held that a couple's reliance on their CPA to timely e-file their return did not excuse them from late-filing penalties.
A couple argued in a brief for the Fifth Circuit that they reasonably relied on their CPA to e-file their return so late-filing penalties shouldn't apply and that the holding in United States v. Boyle, 469 U.S. 241 (1985), that a taxpayer can't rely on an accountant to timely file a paper return should not be extended to e-filed returns.
[Christopher A. Haynes et ux. v. United States; No. 17-50816; 2/18/2018]
On February 8 the House Ways and Means Committee released a summary of the tax provisions in the Bipartisan Budget Act of 2018, which include tax relief for victims of hurricanes Harvey, Irma, and Maria and the California wildfires, and extensions of expiring tax provisions.
[Summary of Tax Provisions in Bipartisan Budget Act of 2018; 2/9/2018]
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