IRS Will Again Rule on Debt Issuances Prior to a Spin-off
Posted by Kim Chen on May 21st, 2017
In an attempt to expand its private letter ruling policy, the IRS has removed certain debt issuance transactions from its list of “no rule” areas. On and after 5/9/17, the IRS will rule on whether the tax-favorable rules of IRC Secs. 355 and 361 apply to spin-off transactions in which debt issued in anticipation of […]
Procedure—Innocent Spouse Relief Granted
Posted by Kim Chen on May 18th, 2017
Before their divorce, the taxpayer and her husband filed a joint return with two Schedule C’s (Profit or Loss from Business): one reporting a net profit of $95,686 for the taxpayer’s realtor income, and one reporting a net loss of $133,277 for her husband’s cattle ranching activity, in which the taxpayer was never involved. The […]
IRS AGREES IN RESULT ONLY RE CORP. PAYMENTS OF SHAREHOLDER/EMPLOYEE’S PERSONAL EXPENSES
Posted by Kim Chen on May 15th, 2017
IRS has acquiesced in result only with a Tax Court holding that an S corporation’s payment of personal expenses on behalf of its sole shareholder/officer should not be characterized as wages subject to federal employment taxes. The Tax Court found that they were repayments of loans made to the S corporation, and IRS was critical […]
No Dependency Exemption for Grandmother Who Supported Grandchildren
Posted by Kim Chen on March 3rd, 2017
The taxpayer provided financial and household support to her grandchildren because their father (her son) was an unemployed drug addict. She claimed the grandchildren as dependents on her tax return after being assured by her son that he wouldn’t claim them. On audit, the taxpayer’s dependency exemptions for the grandchildren were disallowed because they had […]
Taxpayers Must Validate Identities When Calling the IRS:
Posted by Kim Chen on February 28th, 2017
In a news release, the IRS reminds taxpayers that they will be required to validate their identities when contacting IRS call centers. If the matter involves a personal tax account, the taxpayer must have the following ready: (1) Social Security numbers and birth dates for those listed on the tax return; (2) an Individual Taxpayer […]
