Cases, Rulings, Regulations

This PodCast deals with the Ninth Circuit Court of Appeals affirmation of the Tax Court's decision in the case of Johanson and Melzig v. Commissioner, TC Memo 2006-105 involving alimony. In its original decision, the Tax Court expressed exasperation at having to yet again decide an issue the parties could have resolved in the decree itself-whether the payments would cease on the death of the recipient spouse as required by 71(b) for the payments to be treated as alimony. Yet again, the recipient claimed the payments would not and the payor claimed they would, and the Tax Court had to then divine how a California state court would have ruled under California law. The materials can be found at http://www.edzollars.com/2008-09-08_Alimony.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 a common accounting issue, the differences between tax and GAAP treatment of items. Here, we focus on a case involving the time for recognizing an expense. The matter involved rebates and we look at a Chief Counsel Memorandum (ILM 200834019) outlining the IRS's view on why the taxpayer in this case could not recognize the expense related to rebates at the time a sale was made. Materials for this week's podcast can be downloaded at http://www.edzollars.com/2008-09-01_Rebates.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 reviews the requirements found in the regulations for obtaining the required support for a tax position, concentrating on the methods outlined in Reg. "1.6662-4(d) in the definition of "substantial authority" which are cross referenced multiple times when considering other levels of authority. The materials can be downloaded from http://www.edzollars.com/2008-08-25_Penalty.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 the United States Court of Federal Claims decision in Fisher, Trustee v. United States, 2008 TNT 154-7 where the court sided with the taxpayer and held that the proper treatment of amounts received in lieu of shares in the demutualization of Sun Life were to be treated under the open transaction doctrine rather than treated as a sale of shares with a zero basis. More on this topic can be found on LISI as Estate Planning Newsletter # 1330. The materials can be found at http://www.edzollars.com/2008-08-18_OpenTrans.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

The IRS issued proposed regulations to explain the reduction of the NOL substitute in an S corporation setting when cancellation of debt is excluded from the S corporation's income under Section 108. While the regulations are in proposed form only, the "deemed NOL" rules have existed in the IRC since 2002, and Section 108 is likely to be an issue for S corporations who face economic challenges. The materials for this podcast can be found at http://www.edzollars.com/2008-08-04_108andS.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 the sequel to a November 2006 podcast on the same case--that of Kadillak v. Commissioner where an individual who was caught by the "dot bomb" crash of the technology stock of his former employer attempted to mitigate the damage caused by his ISO exercise and 83(b) election made at the height of the craze. A year later, Mr. Kadillak was no longer employed by the organization, the stock price had tanked, and when he sold the stock that he didn't have to surrender got stuck with a $3,000 per year AMT capital loss deduction (probably for lifetime) to "offset" a large prior year AMT liability. The Ninth Circuit has now ruled on the case and, unfortunately for Mr. Kadillak, agreed with the Tax Court's decision. We look at the Section 83(b) election, it's downside risk that Mr. Kadillak obtained "up close and personal" experience with, and some general observations on counseling clients about the "what if" problem when they are sure they know what the future will hold. The materials are available a

This PodCast is about the preparer standards and tax return positions. In the case of Wadsworth v. Commissioner, TC Memo 2008-171, we see a real world situation where a tax professional decided a position was not one that he could accept and what happened when the client decided to find another person who would take the requested position. As you might expect, the taxpayers don't fare well in the eyes of the court when they attempt to claim reliance on the advice of the professional that did sign off on the position. The materials for this week are available at http://www.edzollars.com/2008-07-28_Preparer_Shop.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 temporary regulations that deal with start-up and corporate and partnership organization costs. Interestingly enough, the new regulations now create an automatic election to expense/amortize all such costs, and treat problems related to the identification of costs or the proper year to begin amortization as accounting method issues. The materials are located online at http://www.edzollars.com/2008-07-14_Section_195.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 impact of life insurance premiums and death benefits on an S corporation's accumulated adjustments account. It will focus on the more general issues of the relevance (and lack of relevance) of AAA for an S corporation and its shareholders, and how the item is computed. The materials are available at http://www.edzollars.com/2008-07-07_AAA.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 HSA Accounts. The IRS has issued guidance in the form of a series of questions and answers related to Health Savings Account in Notice 2008-59. This podcast covers some of the planning and design opportunities available under this Notice. Written materials for this podcast can be downloaded from http://www.edzollars.com/2008-06-30_HSA_Guidance.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 two of a series on the proposed regulations for preparer penalties. . The materials are at http://edzollars.com/2008-06-23_Penalty.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 the first of what will be a series of two on the proposed regulations for preparer penalties. Considering the length of the regulations and podcast, the first hour is in this file to listen to and digest, with part two to be posted later. The materials are at http://edzollars.com/2008-06-23_Penalty.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 reviews the step transaction doctrine and where the line is drawn when we deal with the application of the step transaction doctrine in the formation of a family limited partnership. The IRS attempted to use their victory in the Senda case to get the same result in Holman v. Commissioner, 130 TC No. 12. But in an opinion that reminds us of the importance of the facts of the specific case in question, the Tax Court refused to take that step. Materials for this week's podcast can be downloaded from http://edzollars.com/2008_06_09_Holman.pdf. Be sure to also look at the commentary of Owen Fiore, Paul Hood, and Jeff Pennell in our LISI Estate Planning archives. 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 concerns a Court of Claims case that deals with an IRS examination and the imposition of the fraud penalty--a penalty the Court of Claims found was not justified. The case is the one of Gagliardi v. United States, 2008 TNT 98-20, and is instructive both in the outline of the law, as well as allowing us to consider the ways an examination like this could spin out of control and result in a taxpayer being assessed the fraud penalty in a case like this. The materials can be downloaded from http://www.edzollars.com/2008-06-02_FraudandtheDentist.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 a case involving a failure to meet SEP rules. Simplified employee pensions (SEPs) are a popular retirement plan for extremely small businesses, with one of the key attractions being that don't require many of the formalities of regular qualified plans. But that has led to taxpayers treating them too informally, and in this case(Brown v. Commissioner, TC Summary 2008-56) a taxpayer discovered the hard way what can be the consequences of failing to faithfully follow the simplified rules for this type of plan. The materials for this podcast can be found at http://www.edzollars.com/2008-05-26_SEP_Issue.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 deals with a Fifth Circuit ruling in Kornman & Associates, Inc. v. United States on whether a taxpayer who set up a Son of BOSS style shelter would get the benefit that was expected--and the taxpayer was disappointed. The case offers a chance to review the unusual impact that liabilities have in a partnership context, as well as the question of just what is a liability for this purpose. The materials for this podcast can be downloaded at http://www.edzollars.com/2008-05-19_Partnership_Liabilities.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 deals with the problems that might be encountered by a taxpayer who tries to hand file a return. In the case of Allnut, Sr. v. Commissioner, 2008-1 USTC 50,310 the taxpayer failed to make delivery as required by the regulations, and the court found that what the taxpayer had to live with the date a document could finally be documented as being in the District Director's office--which was less than year years before the date the IRS issued an assessment. Materials for this week are available at http://www.edzollars.com/2008-05-09_Hand_Carried.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 interplay between partnership taxation and tax shelters taken beyond the spirit of the law. Partnership taxation is one of those areas where things may not work exactly as many practitioners expect, and those unexpected workings are things that tax shelter promoters have attempted to make use of. But if you are going to try and use the technical details of the tax law to force the IRS to grant you a tax benefit that otherwise doesn't seem like something that should happen, it's helpful to follow the detailed requirements yourself. Unfortunately for the taxpayer in 7050 Ltd. v. Commissioner, TC Memo 2008-12, that didn't quite happen--and while one bullet was dodged, another problem proved fatal to the benefit the taxpayer was after, and the court never had to deal with whether the shelter actually would have worked if executed as it was supposed to have been. The materials are available at http://www.ezollars.com/2008-05-05_Sloppy.pdf . This Podcast is sponsored by Leimberg Inf

This PodCast follows the continuing saga of the self-employment tax and qualified joint venture. It analyzes CCA 200816030 issued by the IRS that outlines the "new improved" IRS position on self-employment tax and the Qualified Joint Venture election under "761(f).The materials for the podcast are available at http://www.edzollars.com/2008-04-28_SEandQJV.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 concerns the issue of whether "7502(c) provides the exclusive means to prove timely filing of a document by a taxpayer. What the Third Circuit had to say, the IRS didn't like hearing. In the case of Philadelphia Marine Trade Ass'n.-Int'l Longshoremen's Association Pension Fund et al. v. Commissioner, 2008 TNT 74-16 the Third Circuit held that the reports of the death of the common law mailbox rule were, in the words of Mark Twain, greatly exaggerated. That places the Third Circuit in the same camp with the Eighth, Ninth and Tenth Circuits, and opposed to the positions of the Second and Sixth Circuits. The materials for this podcast are located at http://www.edzollars.com/2008-04-21_Mailbox.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