IRS targets U.S. source income paid to foreign persons IRM 4.10.21, U.S. Withholding Agent Examinations – Form 1042 Mike Habib, EA IRS has issued a new Internal Revenue Manual () section, IRM 4.10.21, U.S. Withholding Agent Examinations – Form 1042, on reporting and withholding requirements for U.S. source income that’s…
Court rebuffs IRS and allows policyholder to escape gain on demutualization Eugene A. Fisher et al. v. U.S. (Ct Cl 8/6/2008) 102 AFTR 2d ¶ 2008-5150 The Court of Federal Claims has applied a variation of the open transaction doctrine with the result that a policyholder had no gain to…
New IRS settlement initiative for LILO and SILO transactions Mike Habib, EA IRS recently announced a settlement initiative for Lease-In/Lease-Out (LILO) and Sale-in/Lease-Out (SILO) transactions. Under this initiative, more than 45 of the nation’s largest corporations that participated in these shelters will receive a letter with an offer. Shelter participants…
Proposed regs explain strict charitable contribution substantiation & appraisal rules Preamble to Prop Reg 08/06/2008; Prop Reg § 1.170A-15, Prop Reg § 1.170A-16, Prop Reg § 1.170A-17, Prop Reg § 1.170A-18 Mike Habib, EA IRS has issued proposed regs explaining the charitable contribution substantiation changes made by the American Jobs…
Finance Chairman Baucus wants more action and details on IRS strategy to combat identity fraud [Press release dated Aug. 5]: A recent IRS update on its Identity Protection Strategy has failed to satisfy the concerns of Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee. The report, submitted to…
IRS issues new version of Central Withholding Agreement form Mike Habib, EA The IRS has issued a June 2008 version of Form 13930, Application for Central Withholding Agreement. Under IRC §1441(a), nonresident alien (NRA) individuals are subject to 30% withholding on the gross amount of interest, dividends, rent, salaries, wages,…
IRS may require reporting of PAL activity groupings Mike Habib, EA Notice 2008-64, 2008-31 IRB 268 A new notice requests comments regarding a proposal to require taxpayers to report to IRS their groupings and regroupings of activities and the addition and disposition of specific activities within their existing groupings of…
Presidential candidates discuss merits of increasing the Social Security tax: Mike Habib, EA With less than three months until the 2008 presidential election, both candidates have expressed their views about a possible Social Security tax increase. The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees, and self-employed…
Innocent spouse relieved of tax from embezzlement and forgery Yakubik, TC Summary Opinion 2008-74 Mike Habib, EA The Tax Court recently held that the IRS abused its discretion in not granting equitable innocent spouse relief to a husband whose wife embezzled funds from her employer and forged checks taken from…
REIT changes in the 2008 Housing Act Mike Habib, EA Included in the $15.1 billion of housing tax incentives in the recently enacted “Housing Assistance Tax Act of 2008” (the Housing Act) is a package of changes liberalizing the real estate investment trust (REIT) rules. Under these new provisions: Foreign…