Given that the IRS and courts had a short week, we look back this week at a ruling from a few weeks back, as well as a related ruling from a year ago, that deal with the accountable plan rules, and how the IRS interprets the options for implementing those rules.  We look at Revenue Rulings 2006-56 and 2005-52.

The materials can be downloaded at http://edzollars.com/2006-11-25_Accountable_Plan_Per_Diem.pdf .

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com .

The IRS has released a 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 .

The podcast was recorded this week at the Founders Inn in Virginia Beach, Virginia where I spoke at the Virginia Accounting and Auditing Conference.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

83(b) elections were all the rage, especially for those with stock options during the dot com bubble--and now many of those individuals regret the election.  This week the Tax Court considered the case of Anthony Kadillak (Kadillak v. Commissioner, 127 TC No. 13) who sought to escape the consequences of his 83(b) election and subsequent forfeiture of a portion of the shares through various means.

The materials can be downloaded at http://edzollars.com/2006-11-11_83b_and_AMT.pdf .

I'm going to Ohio this week, speaking in Dublin, Ohio just outside of Columbus on Monday, and Canton on Tuesday.  After that, I will do a technology update at the Virginia Beach version of the Virginia Accounting & Auditing Conference on Thursday.

The podcast is sponsored by Leimberg Information Services, located at http://www.leimbergservices.com .

The podcast this week deals with the case of Estate of Landers, TC Memo 2006-230, where an estate's co-administrator attempted to seek a finding that there was reasonable cause for late filing based upon his reliance upon his (now deceased) co-administrator, who was a tax professional, and who suffered a broken hip two months before the extended due date of the estate tax return.

The case offers a look at what does and doesn't constitute reasonable cause for late filing, as well as the issue of whether a nonprofessional can be excused for not being aware of the due date of a return if he claims he relied upon a professional to inform him of the due date.

The materials are located at http://edzollars.com/2006-11-01_Late_Filing_Tax_Professional.pdf .

The podcast is sponsored by Leimberg Information Services, located at http://www.leimbergservices.com.

The Tax Court this week reasserted its previously stated position on the treatment of the GST grandfathering provision for trusts in existence on September 25, 1985 when a party holds a general power of appointment under that trust.  The Tax Court held that the IRS final regulations that treat such a power as removing the trust transfers from the protection of the grandfathering provisions are valid, despite cases decided by the Eighth and Ninth Circuit where it was held the plain language of the grandfathering provisions meant that such powers were to be ignored for this purpose.

The Tax Court and the Second Circuit had previously held such a position to be a valid interpretation of the law.  Now it appears the Sixth Circuit, which has not yet been heard on this matter, will gets its say in the Gerson Estate case (127 TC No. 11).

The materials can be downloaded from http://edzollars.com/2006-10-28_Plain_Language.pdf .

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

The IRS has proposed regulations that will radically change the taxation of private annuities, making Revenue Ruling 69-74 obsolete as of October 18.  We discuss the new treatment the IRS is proposing, and how it would impact such transactions.

This week we also summarize some other recent developments, including the new updated numbers for qualified plan limitations.

The materials can be downloaded at http://edzollars.com/2006-10-21_Annuity.pdf .

The podcast is sponsored by Leimberg Information Services at http://www.leimbergservices.com .

In a relatively slow tax news week, the Tax Court issued yet another published opinion dealing with the coordination of the capital loss rules of §1211 and the alternative minimum tax.  In the case of Palahnuk v. Commissioner, 127 T.C. No. 9 the Tax Court once again dashed the hopes of a taxpayer who exercised highly appreciated incentive stock options only to see their value plummet before the year had expired that would allow the taxpayer to sell the shares and get long term capital gain treatment for regular tax purposes.

The materials can be downloaded from http://edzollars.com/2006-10-14_Lets_Try_This_Again.pdf .

The podcast is sponsored by Leimberg Information Services, located at http://www.leimbergservices.com.

This podcast covers a number of recent tax developments, including dealing with the burning issue of whether a preparer must sign the client's copy of the return, a recent case involving again the question of what is alimony and the IRS's recent reprieve from the requirement that nonqualified deferred compensaton plans be in compliance with the (as of yet) not issued final regualtions by January 1, 2007.

Documents for this podcast are available at http://edzollars.com/2006-10-06_ThisandThat.pdf .

The podcast is sponsored by Leimberg Information Services, online at http://www.leimbergservices.com .

The issue of whether a service provider is properly treated as a contractor or employee is an important issue for many small businesses.  In the case of Orion Contracting Trust v. Commissioner, TC Memo 2006-211, the Tax Court looked at this issue.  As well, the Court also took a look at the issue of what actions would indicate the proper "bad faith" to allow the imposition of a fraud penalty.

The materials for the podcast can be downloaded from http://edzollars.com/2006-09-30_Who_Is_An_Employee.pdf .

The podcast is sponsored by Leimberg Information Services.  Visit them on the web at http://www.leimbergservices.com .
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The documentation rules for charitable contributions can create situations where taxpayers lose the right to claim a deduction even though they made it and, by the time they get to Tax Court, can even show the value of what was contributed.  This was a lesson learned by the taxpayers in Ney v. Commisssioner, TC Summary 2006-154.

This podcast reviews the requirements for qualified appraisals and why just because an appraisal exists that won't necessarily save the taxpayers' deduction unless have specifically contracted for a tax appraisal and are sure to have the proper parties sign off on their return.

The materials for this week's podcast are located at http://edzollars.com/2006-09-23_Charity_Appraisals.pdf .

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

We look at a case involving the statute of limitations and the issue of reliance on IRS advice.  In the case of A. L. Katz & J. L. Miller v. United States the United States Court of Claims explains that a taxpayer cannot use the fact that an IRS employee told them a claim could be filed by a date that turned out to be after the statute had expired to reopen the statute.  As well, the case provides an opportunity to look at the general rules that are involved with Section 6511 and the statute of limitations on claims for refund.

The materials for the podcast can be downloaded from http://edzollars.com/2006-09-16_Statute.pdf .

The next couple of weeks may prove challenging in getting the podcast up, as I will be traveling to Novi, Michigan to speak on Monday, come back to my office for Tuesday through Thursday, and then head off on my "Southern" speaking trip, speaking at the Virginia Accounting and Auditing Conference in Roanoke, Virginia on Monday, September 25 and then in Memphis, Tennessee for the Tennessee Society of CPAs on Employee Benefit Plans on Wednesday, September 27.  Hopefully I'll be able to get some podcasts put together in that time frame.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

Securing data has become a key issue for professionals, given recent high profile thefts of computers and drives containing sensitive client information.  This week we look at some of the basics of encrypting data that professionals need to understand to protect their client’s information should a data containing device fall into a third party’s hands. 

The materials for this week’s podcast can be downloaded at

http://edzollars.com/2006-09-08_Securing_Data.pdf

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

This week we deal with the issues involved with having cars that are used by employees, and the various rules that employers need to deal with in that situation.  While arguably not as “excitingâ€? to tax practitioners as issues dealing with estate planning, entity selection and the like (we get excited by strange things), clients are often extremely interested in getting company autos to certain employees, far more interested than the dollars involved would suggest they should be.

We look at the employment tax issues related to the company car, as well the requirements to meet the various “simplified� rules available for this purpose.

The materials can be downloaded at http://edzollars.com/2006-09-01_Employee_Cars.pdf .

The podcast is sponsored by Leimberg Information Services at http://www.leimbergservices.com .

Paying your children to work in your business can make sense both for the business and from a family tax planning standpoint, but you have to take care to justify that the children are truly being paid for actual business work.  This was the little item that caused the taxpayer problems in the case of Alexander v. Commissioner, TC Summary 2006-127. 

While the case may mainly demonstrate the truth of the old "pigs/hogs" tax saying, the opinion also helps illustrate issues that need to be considered when a close relative is placed on the payroll.  You can download the materials for this podcast at http://edzollars.com/2006-08-26_But_My_Kids_Are_Worth_It.pdf

I'll be heading to Bismarck, North Dakota next week for a vacation that will stretch over two weekends.  There may or may not be podcasts for those weeks (depends on if I get them recorded and uploaded), but I expect to have up the following week if nothing else.

The podcast is sponsored by Leimberg Information Services, located at http://www.leimbergservices.com .

We look at a case this week that deals with the continuing problems of employee related options that were exercised when the stock was at a high price, but whose price collapsed before the tax was due.  The case involved was the case of Racine v. Commissioner, TC Memo 2006-162.

The materials can be downloaded at http://edzollars.com/2006-08-19_Margins_and_Options.pdf .

The podcast is sponsored by Leimberg Information Services at http://www.leimbergservices.com .

This week we look at 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 .

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

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.

The materials for this week's presentation are found at http://edzollars.com/2006-08-03_Trust.pdf .

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

Is a distribution made to a surviving spouse that was rolled to her IRA but can be traced to her deceased spouse's IRA account eligible for the death benefit exception to Section 72(t)?  Considering a nearly $100,000 penalty was on the table, the taxpayer in the case of Gee v. Commissioner (127 TC No. 1) certainly hoped the Tax Court would answer yes. 

Unfortunately for her, the Tax Court answered in the negative.  We look at the facts of her case, as well as the whole question of whether a surviving spouse should elect to treat an IRA as his/her own or take it as a beneficiary.

The materials can be downloaded at http://www.edzollars.com/2006-07-29_IRA_Spouse.pdf .

The podcast is sponsored by Leimberg Information Services (who had an email newsletter on this topic earlier this week), located on the web at http://www.leimbergservices.com .

And now for something completely different-coverage of FASB.  Well, actually there is a tax angle to this one, as FASB has issued FASB Interpretation 48 in final form in June that will deal with uncertain tax positions.  The new interpretation will create some real problems for CPAs, especially those who both handle tax matters and have any sort of attest relationship with the client (including compilations, reviews and audits) that deals with GAAP statements.

The materials can be downloaded from http://www.edzollars.com/2006-07-22_FASB_Podcast.pdf , though the actual FASB interpretation needs to be downloaded from their site ( http://www.fasb.org/st/#int48 ) due to copyright issues-and you will want to download it.

The podcast is sponsored by Leimberg Information Services, on the web at www.leimbergservices.com .

The logic of the application of the IRC to specific situations at times seems to defy common logic, and this week we look at a specific case 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 you'll notice this week.  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 use.  We'll be back on the iBook in next week's podcast.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

The issue of the taxation of prepaid purchase discounts that may need to be refunded if purchase goals are not met 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 o 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 .

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com .

For our one year anniversary show, we take a look at the newly released 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 .

As I noted last week, I returned this week from visiting Syracuse, New York where  I presented a couple of continuing education courses for the New York Society of CPAs, and this was one of the topics we talked about in the course I gave Tuesday.

This podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com .

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, from an economic standpoint, the taxpayers in Ruckreigel seem to have much real exposure to potential loss than Mr. Miller actually ended up having, but he got his deduction.

The materials can be downloaded from http://edzollars.com/2006-06-23_S_Debt.pdf.

This podcast is sponsored by Leimberg Information Services, Inc., on the web at http://www.leimbergservices.com.

Another Circuit chimes in on the issue of the FICA taxation of payments made in exchange for tenure rights as part of an early retirement package offered to teachers.  In a combined appeal of two contradictory opinions of lower courts under their jurisdiction, the Sixth Circuit upheld the lower court's finding in favor of FICA taxation in Appolini and reversed the opposite lower court holding in Klender, both cases that involved early retirement payments to teachers subject to Michigan's tenure law.

The Sixth Circuit, in a 2-1 split decision, specifically called into question the Eigth Circuit's holding in North Dakota State University where payments for professor's tenure rights were held not to be subject to FICA.  We look at why the majority believes the North Dakota holding was in error, as well the reasoning behind the dissenting opinion.  As well, we consider the IRS changes to Revenue Rulings in this area, as well as how the courts dealt with the prior rulings that were applicable to these cases.

The materials can be downloaded at http://edzollars.com/2006-06-17_FICA.pdf.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

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.

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

A special podcast this week of interest to practitioners (and their clients) who bulk filed paper extensions with the Fresno Service Center.  The IRS recently admitted to a mistake in processing extensions received in Fresno.

Materials for the podcast, including two IRS releases on this issue, can be downloaded from http://edzollars.com/2006-06-04_Fresno_4868.pdf.

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

Divorce settlements at times are frustrating for tax preparers to work with, since they often leave dangling the issue of whether payments were or were not intended to be alimony and, not surprisingly, the former spouses may have very different views on that issue.  In this week's case, the Tax Court was forced to settle the issue after lecturing the warring spouses in his opinion about how the issue should have been taken care of well before this point.

The case in question is the case of Johanson and Melzig v. Commissioner, TC Memo 2006-105.  You can download the materials from http://edzollars.com/2006-06-02_Alimony.pdf.

This podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

For Memorial Day, the podcast will take a break from tax related topics and consider rather some issues that arise when you, like many this weekend, are traveling and take your laptop with you to "stay connected" with your office and clients.  There are a number of risks that have been discussed in recent weeks on Steve Gibson and Leo Laporte's Security Now podcast that I wanted to discuss in the context of a tax professional.

We look at how your system may be compromised and your data exposed rather easily by any other machine on a network you are connected to (incluidng a hotel high speed network or a wifi hotspot at your local coffee shop).  And by this I mean a machine of any other guest or patron of the shop, or just someone in distance of the hotspot.   As well, we discuss why wifi encryption does not address this problem, and why additional steps are necessary.  We also discuss the steps you can take to make your transmissions truly secure.

The materials for this podcast can be downloaded from http://edzollars.com/2006-05-20_Secure_Data.pdf.

This podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

We finally have a 2005 extender bill, albiet missing a few extenders and with a few surprises (some good, some not so great).  The President signed the bill into law this week, so it's time to look at the details that were in the bill.

The materials for this podcast can be found at http://edzollars.com/2006-05-20_TIPRA.pdf.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

Taxpayers who take distributions from retirement plans prior to attaining age 59 1/2 have to deal with a confusing set of rules of which distributions are and are not eligible to escape the 10% addition to tax under §72(t).  Two recent cases illustrate both the traps that exist for the unwary and how a taxpayer managed to convince the Tax Court he qualified for an exception from the penalty despite IRS arguments to the contrary.

The materials for the podcast can be downloaded from http://edzollars.com/2006-05-13_Premature.pdf.

The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

The Tax Court looked at the interaction of the $3,000 capital loss limitation and the alternative minimum tax basis adjustment on the sale of shares originally obtained via the exercise of incentive stock options in a prior year.  The case in question is Merlo v. Commissioner, 126 TC No. 10.

In the case at hand, a taxpayer had exercised stock options at the end of $2,000 and obtained his stock at a price that was more than $1,000,000 less than the market price at the time.  Under the rules for ISOs, that fair market value spread was not taxable for regular income tax purposes, but was taxable for AMT purposes, generating a substantial AMT liability.

However, things did not go well for the stock in 2001 and, by year end, Mr. Merlo's stock was worthless.  The Tax Court considered whether, when Mr. Merlo disposed of his stock, he could take the full basis differential against alternative minimum taxable income in 2001 and generate an AMT net operating loss to carry back to 2000 to recoup much or all of his AMT liability in that year.  Their answer was not the one Mr. Merlo wanted.

The materials can be downloaded at http://edzollars.com/2006-05-06_AMT_Capital_Loss.pdf.

This week we're adding some theme music, music licensed from www.podcastthemes.com.

The podcast is sponsored by Leimberg Information Services, found on the web at http://www.leimbergservice.com.

Shareholder debt to S corporations has proven to be a minefield for shareholders and their advisers, and the taxpayer and their adviser in the case of Ruckriegel v. Commissioner managed to step on a shareholder debt/basis mine twice in two consecutive IRS exams.  In this case, the shareholders attempted to argue that loans from a partnership they controlled were actually loans to them from the partnership, followed by loans to the corporation.

Or, to put it more correctly, their CPA attempted to argue that.  One of the problems in this case, beyond the simple fact that the form of the transaction (which the taxpayers had control over) did not agree with what they were arguing was the true substance, was the fact that neither the taxpayers nor their inside accountant were treating these loans as if they had traveled that indirect route.  The case points up the dangers of attempting to "after the fact" correct client missteps--and especially continuing to do it for multiple years.

The materials for this podcast are found at http://edzollars.com/2006-04-29_Debt.pdf.

This podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

Please feel free to comment on this podcast via the podcast website's "comment" button.

Much of the information that taxpayers need to deal with their tax obligation arrives via the U.S. mail.  But what happens when that mail is delivered to the wrong address and either never makes it to the taxpayer or arrives late?  While we've previously considered what happens when the taxpayer attempts to send documents to the IRS that the IRS claims never arrived, this week we look at a case and a letter ruling involving mail that was sent to an address the taxpayer did not currently live at when the mail arrived.

Since those of us who do compliance work now have a real need to relax, the podcast also has a brief off-topic discussion of an additional internet audio option--internet radio with discussions about four different stations.

The materials for this podcast can be found at

http://edzollars.com/2006-04-22_Lost_in_Transit.pdf

This podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

Can adopting a child, an apparently voluntary endeavor, qualify as an unforseen circumstance for purposes of obtaining an early exclusion of gain from the sale of a home under Section 121?  A taxpayer asked that question of the IRS and got a favorable response which we consider this week.  The letter ruling, which applies only to this taxpayer, is useful in helping us determine where the IRS may see the boundaries of an "unforseen" circumstance that qualifies a taxpayer for early use of Section 121's gain exclusion at a reduced level.

We look at Letter Ruling 200613009's specific facts, noting that many factors were considered than just the fact the taxpayers decided to adopt a child--so the ruling does not support the conclusion that all adoptions will trigger the ability to make early use of a reduced 121 exclusion.

The materials for the podcast can be found at http://edzollars.com/2006-04-15_Adoption.pdf.

This podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

The case of Benson v. Commissioner, TC Memorandum 2006-55, provides a look at the issue of what constitutes adequate disclosure under Section 6501(e)(1)(A)(ii) for purposes of avoiding the otherwise mechanical application of an extended six year statute on substantial underpayments.  In this case, which the taxpayer ends up losing, the Court considers to what extent disclosures on other returns can "make up" for items not disclosed directly on the individual return.

The text file for this podcast can be downloaded from http://www.edzollars.com/2006-04-08_Adequate_Disclosure.pdf.

This podcast is sponsored by Leimberg Information Services, found on the web at http://www.leimbergservices.com.

We look at the exclusion for personal injuries under Section 104 this week, as well as the nature of a reasonable cause for purposes of escaping the imposition of a penalty.  We use the case of Goode v. Commissioner, TC Memo 2006-48, to illustrate these issues. 
As well, we look at another attempt at getting reasonable cause to take a position--ask the President (as in George W. Bush), or at least have someone else do it and then claim to rely on the answer received when the question is delegated to an individual at the IRS.  This was the attempt of teh taxpayer in Smith v. Commissioner, TC Memo 2006-51.
The materials can be downloaded from http://edzollars.com/2006-04-01_Injury.pdf.
This podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

This week we look at the issues and limitations involving the Cohan rule and its use in tax compliance and representation work.

The materials can be downloaded from http://edzollars.com/2006-03-25_Cohan.pdf.

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

This week we look at some issues revolving around payroll tax deposits, including the IRS and Social Security Administration recent caution about the use of payroll services to deposit taxes.

This week we look at a case that invovled the embezzlement of payroll tax deposits by a payroll service, where the IRS successfully argued that the employer still was liable for the unpaid taxes even though they had believed the payroll service had deposited the taxes

As well, we look at a case involving a shareholder who stumbled into a full trust fund penalty when he attempted to take back funds he had advanced the failing corporation when he discovered there were unpaid payroll taxes.

The materials for the podcast can be downloaded at http://edzollars.com/2006-03-18_Payroll.pdf.

This podcast is sponsored by Leimberg Information Services located on the web at http://www.leimbergservices.com.

In honor of the upcoming March 15 filing deadline for calendar year corporations, this week we look at the issue of just what is a "qualified personal service corporation" and, perhaps more importantly, what is not. The podcast looks at the recent case of Ron Lykins, Inc. v. Commissioner, TC Memorandum 2006-35, where a corporation was held not to be a QPSC, and so could benefit from the lower tax brackets available to non-PSCs.

Materials for the podcast can be downloaded from http://www.edzollars.com/2006-03-10_Getting_Personal.pdf .

The podcast is sponsored by Leimberg Information Services, available on the web at http://www.leimbergservices.com.

This week's podcast arose from a discussion that began on the California Society of CPAs TaxTalk group on Yahoo about the widespread use of Circular 230 disclaimers. There seems to be an unfortunately false belief among many in the professions involved that a standard disclaimer eliminates any and all issues related to the revisions last summer to Circular 230.

The podcast discusses both the issues outside of Circular 230 that can arise from the indiscriminate use of this disclaimer, as well as those cases under the covered opinion rules when the disclaimer does not absolve the professional from having to issue a covered opinion.

The materials can be found at this link:

http://edzollars.com/2006-03-03_Disclaimers.pdf

We also discuss briefly some technology matters, including a quick discussion of why it may be useful to listen to Steve Gibson's Security Now podcast. To check out what's available go to:

http://grc.com/securitynow.htm

If you ever use a wireless hotspot or plug into a hotel network when on the road, this week's broadcast, while a bit dense, also contains some very important information about risks you may not be aware of (the "man in the middle" attack to steal your passwords, or the simple sniffing allowed if you aren't wired directly to a switch--that is, the network uses either wireless or a simple hub).

The podcast is sponsored by Leimberg Information Services, on the web at http://www.leimbergservices.com.

This week we look at issues surrounding what are medical expenses for various tax purposes, as well as a case where the taxpayer successfully defended hiring her spouse as employee, and then covering him under a medical reimbursement plan.

The materials for this week's podcast are at this link.

This podcast is sponsored by Leimberg Information Services.

We take a bit of a break from developments to talk about the issues and methods of tax research this week. We look at how to learn to efficiently deal with research issues that arise in a tax practice--especially during this busy season.

The materials are found at this link.

This podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.

This week's program discusses charitable remainder trusts in light of the IRS granting relief from an issue they first seemed to have discovered last year regarding the potential state law granted right of a surviving spouse to claim a share of a CRT upon the death of the creator of the trust.

The program discusses CRTs in general, including a discussion of which clients a CRT might or might not be appropriate for. We then look at the problem that a spouse's right to elect a share of the trust created, the IRS's initial response and then their recent reconsideration of that response.

The materials can be downloaded here.

This podcast is sponsored by Leimberg Information Services, found on the web at http://www.leimbergservices.com.

This week we take a look at the Tax Court's application of the charitable documentation regulations to two real world cases.

In the case of Kendrix v. Commissioner a former IRS CID employee and Revenue Officer is found to be lacking in the documentation for her many charitable contributions.

While there appears to be reason for the court to believe the contributions to be overstated or not made at all, the court actually keeps returning to technical inadequacies in her documentation to actually deny the deductions. The judge even muses that the court may have erred in the past in allowing the use of the Cohan rule to be used when documentation didn't meet the requirements, but ultimately concludes that the issue doesn't have to be dealt with in this case case. That makes this case potentially troubling since that same logic would apply even if there was no question the donation was made.

The second case is a Tax Court Summary opinion of Haas v. Commissioner where the court, among other things, gets to deal with the "I put cash in the plate they passed around at church."

The materials can be downloaded from this link.

This week's podcast is sponsored by Leimberg Information Services.

Congress hates employees--that's a fact of life that a worker learns the hard way in the case of Alley v. Commissioner, (TC Summary Opinion 2006-4) that we discuss this week. Mr. Alley had a "creative" way of getting around the fact that Section 62 does not allow employee business deductions to be taken in computing adjusted gross income. Unfortunately for Mr. Alley, the Tax Court did not appreciate his creativity.

The case offers an option to look at the overall structure of where deductions are taken and the controlling provisions, so it useful beyond just the employee business expense context. The supporting materials can be downloaded here.

This podcast is sponsored by Leimberg Information Services.

This week we finally get a break from the Schedule D developments and move on to a new topic. We discuss simplified employee pensions, including the basic rules that apply to them, and the gotchas that clients tend to run into.

The materials are available from this link.

This podcast is sponsored by Leimberg Information Systems.

In what has become an unintended series of podcasts, we deal once again (and hopefully for the final time) with the IRS's revisions to the Schedule D instructions, and the subsequent "clarifications" (some might say abandonment) of those changes that have come out due to the storm of protests.

When last we left our story last Sunday, a solution acceptable to most on paper filings had been endorsed by the IRS. However, many questions remained on how efiling was impacted by this. This week we get a revised clarification that apparently will grant relief for efiling.

The materials with all the details can be found at this link.

This podcast is sponsored by Leimberg Information Services.

While highly unofficial at this point, the IRS has begun circulating a "clarification" of the Schedule D issue.

This special podcast discusses this email document and what it means for the upcoming tax season. Of special interest is its apparent lack of a solution to the problem for those filing returns via electronic means.

This podcast is sponsored by Leimberg Informaiton Services.

This week we look at the updated uniform definition of a child and other changes to the dependency exemption under Section 152 that Congress passed last year, as well as a technical correction Congress just passed that removes what had been a potentially significant change in the treatment of the exemption for divorced parents.

You can download the materials from here.

This podcast is being sponsored by Leimberg Information Services.

We mark six months of podcasts this week (the first Tax Update was posted right after Apple opened up the iTunes music store to podcasts).

To close out the year and get ready for the upcoming tax season, we look at the documentation rules for charitable contributions. The materials can be downloaded from http://www.edzollars.com/2005-12-31_Charitable_Documentation.pdf.

This podcast is being sponsored by http://www.leimbergservices.com, who provide an excellent set of email newsletters on tax topics by subscription, as well as a database of tax information and categorized archives of these podcasts.

Here at our firm, I wanted to note that one of my partners, LaVon Martin, is retiring as of the end of this year. We have worked both as employees of the firm and, eventually, as owners of the firm for over 20 years together. It has been a joy to work with her over these years, and it will certainly be different around here without her this tax season.

Hopefully she'll remember us while she is actually getting to enjoy the winter and spring here in the Valley while those of us remaining are working our way through tax season.

May all of you have a Happy New Year (enjoy those last few days before the deluge begins...)

For our Christmas Eve edition of the podcast we look at the controversy that has arisen about a modification the IRS made to this year's Schedule D instructions. In the 2005 edition of the instructions, the IRS specifically indicates that taxpayers may not enter "See Attached" and reference a schedule of detailed transactions for Schedule D, but rather must fill the details on Schedule D-1.

Download the materials prior to listening to the podcast.

This podcast is sponsored by Leimberg Information Services.

May you have an enjoyable holiday season. And, remember, tax season is just around the corner...

This week we look at adequate disclosure under Revenue Procedure 2005-75 for purposes of escaping the substantial understatement penalty under Section 6662(a).

Download the materials for the podcast from http://www.edzollars.com/Adequate_Diclosure.pdf.

The podcast is being sponsored by Leimberg Services.

This week we look at the issue of legal fees and settlement, and the tax status of such. We'll look at the result in the Hauge case where a taxpayer and the partnership she owned virtually all of the interests in settled the same legal dispute with quite different tax consequences.

I am going to be speaking this week in Columbus, Ohio on Thursday and have a pretty full day Friday, so we may be late getting next week's podcast up--but we'll try and get it up on time.

Be sure to download the materials from http://edzollars.com/2005-12-03_Alimony_Defintion.pdf.

This week's podcast deals with the tax issues related to alimony, and looks at two recent cases where taxpayers lost in their attempts to get certain payments treated as alimony. In one case (D.E. Lofstrom, 125 T.C. No. 13) the taxpayer attempted to claim an alimony deduction on the transfer of a note receivable from a third party.

In the second case (D.K. Vanarsdall, T.C. Summary Opinion 2005-170) the taxpayer attempted to get the court to count as alimony payments the decree stated were not alimony because the statement did not spell out the matter exactly as Section 71 provides for disqualifying an otherwise qualified payment from alimony treatment.

In both cases, the taxpayer lost. In this podcast we look at the general issues surrounding alimony payments, and what you need to look for when dealing with a client who is either going through a divorce or who comes to you after the fact with a signed and sealed divorce decree.

While I was able to record the podcast back in Phoenix, I'm posting the materials while in Tulsa, Oklahoma from the 2005 Oklahoma Tax Institute put on by the Oklahoma Society of CPAs. I'll be back in Phoenix next week before flying out one final time this year for a presentation in Columbus, Ohio at the Ohio State and Federal Tax Conference on December 15. There I will be giving a three hour presentation on federal tax developments during 2005.

As always, if you comments on the podcast feel free to click the comment link below and leave your comments or discussions.