After a bit of a break while I was out speaking in the past couple of weeks in Nevada, California, Ohio and Virginia we return to a Thanksgiving Day podcast dealing with self-employment taxes and employee status.  We look at the Tax Court's ruling in McWhorter v. Commissioner, TC Memo 2008-263 where a taxpayer argued he was not subject to self-employment tax because he should have been treated as an employee.

The materials can be downloaded at http://www.edzollars.com/2008-11-27_Self_Employed.pdf .

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

The podcast this week is based on a presentation I made Thursday at the Arizona Tax Institute on the current state of Section 6694.  The session was scheduled back a few months ago, but proved timely given recent tax law changes.  A copy of the slides can be downloaded at:

http://www.edzollars.com/2008-11-09_6694Slides.pdf .

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

We continue with issues related to S Corporation debt and the many ways to end up not being able to use debts to deduct losses flowing through.  This week we look at the Tax Court's opinion in the case of Russell v. Commissioner, TC Memo 2008-246.

The materials for the podcast can be downloaded from http://www.edzollars.com/2008-11-03_SDebt.pdf .

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

The IRS has issued final regulations on S Corporation open account debt that will change the way that many clients have to deal with their loans to the corporation.  These changes are effective immediately, so we have to understand how these rules work.  The podcast is being recorded this week while I'm at the Hilton Garden Inn in Owings Mills, Maryland.

The materials are available at http://www.edzollars.com/2008-10-31_S_OpenAccount.pdf .

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

Another taxpayer found out well after filing his return with less than stellar results from his trading activities that there had been an option to file an election under §475(f) to use mark to market accounting which also converts the transactions from short term capital gain/loss to ordinary gain/loss.  Since the taxpayer had over $90,000 in net losses.

The materials can be downloaded at http://www.edzollars.com/2008-09-29_LateElection.pdf .

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

This is a "travel" podcast of sorts this week--the materials were prepared on a Southwest Airlines 737 flying from Phoenix to Baltimore, and recorded in the Hotel Roanoke in Roanoke, Virginia.  This week's topic doesn't deal with any of that--rather it deals with the issue of a CPA that got "creative" in planning with himself and his clients, and in his case he finds the Tax Court isn't amused.  The case is Baisden v. Commissioner, TC Memo 2008-215 where a CPA attempted to get around the self-employment tax by paying "royalties" from his sole proprietorship to himself.  The case doesn't deal with that issue (he had conceded that matter by then) but rather deals with whether he was subject to the fraud penalty.

The materials are available for download at http://www.edzollars.com/2008-09-22_Fraud.pdf .

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

We look this week at a difference in application of IRC §162(k) between the Ninth Circuit Court of Appeals and the United States Tax Court given the Tax Court's decision in Ralston Purina v. Commissioner, 131 TC No. 4 that dealt with the taxpayer's attempt to claim a deduction for dividends paid to participants in its ESOP when it had to redeem certain stock from the ESOP to pay out terminated participants in that plan.

The materials can be downloaded from http://www.edzollars.com/2008-09-15_ESOP.pdf .

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

The Ninth Circuit Court of Appeals this week affirmed 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 .

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

Accounting issues we often run into involve the differences between tax and GAAP treatment of items, and this week we look at one such case involving the time for recognizing an expense.  In this case, 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 .

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

We review 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 .

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

This week we look at the Recent 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.

The materials can be found at http://www.edzollars.com/2008-08-18_OpenTrans.pdf .

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

The IRS issued new 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 .

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

This week the Ninth Circuit 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 at http://www.edzollars.com/2008-08-04_83b.pdf .

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

In a special podcast, we look at the just passed American Home Rescue and Foreclosure Prevention Act of 2008, taking a detailed look at a few tax provisions in that bill of interest.  We look at the new, refundable first time homeowners credit, the property tax deduction for nonitemizers and the soon to start restrictions on the ability to get a full Section 121 exclusion if a property has not always been used as a principal residence that will apply to usage after January 1, 2009.

Note that this presentation is based on a brief review of the provisions that I've just completed based on what I believe to be the version of the bill that passed--but be sure to confirm these details, as well as watch for the required IRS guidance on a number of these matters.

The materials are available for download at http://www.edzollars.com/2008-07-28_Housing.pdf .

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

In the past year we've talked a lot about the preparer standards and tax return positions.  This week, 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 .

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

I gave a presentation at the offices of the Arizona Society of CPAs on the use of virtual machines to deal with the transition from Windows XP to Vista in a tax practice.  This podcast is based on that presentation, and it will be fairly useful to actually have the materials in front of you as you listen to this one.  The materials are at http://www.edzollars.com/Virtual_Machine.pdf.

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

The IRS issued new 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 .

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

The IRS this week issued some relatively unsurprising guidance on the treatment of life insurance and an S corporation's accumulated adjustments account, so this week we'll look at 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 .

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

The IRS has issued new guidance in the form of a series of questions and answers related to Health Savings Account in Notice 2008-59.  This podcast goes over the various items covered in this notice, and 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 .

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

This is part two of a series of two podcasts on the proposed regulations for preparer penalties released recently.  .

The materials are at http://edzollars.com/2008-06-23_Penalty.pdf .

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

This is the first of what will be a series of two podcasts on the proposed regulations for preparer penalties released here recently.  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 in the week.

The materials are at http://edzollars.com/2008-06-23_Penalty.pdf .

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

Securing our client's data is the responsibility of all of those in tax practice. This past week I gave a presentation at the Arizona Society of CPA's Financial Planning Conference on this matter, and that presentation serves as the basis for this week's podcast.

The slides used for this presentation are available at http://www.edzollars.com/2008-06-16_Knocking.pdf .

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

This week we look at 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 the case we'll look at this week, Holman v. Commissioner, 130 TC No. 12.  But in an opinion that reminds 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 .

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

This week we look at 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.

The podcast is being uploaded a bit early this week since I'll be traveling Saturday to New Orleans for the AICPA's Spring Tax Division meeting held there Monday and Tuesday. 

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

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 the case we look at this week (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 .

I'll be in New Orleans next Monday at the AICPA Spring Tax Division meeting, so the next podcast may come out on a slightly different schedule.

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

The Fifth Circuit came down with a 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 .

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

Since we've discussed mailing returns in previous podcasts, this time we look at the problems a taxpayer who tries to hand file a return can run into getting that done correctly.  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.

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

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 .

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

This week we follow the continuing saga of the self-employment tax and qualified joint venture that we've been following since the early part of this year.  This week we analyze 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 .

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

The issue of whether §7502(c) provides the exclusive means to prove timely filing of a document by a taxpayer is addressed yet again by the courts--and 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.

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

After a hiatus at the end of tax season, we return with a new show dealing with an issue of whether a payment to a person was compensation income or a gift.  The case in question is the case of Larsen v. Commissioner, TC Memo 2008-73.

The materials for the podcast are at http://www.edzollars.com/2008-04-16_GiftorComp.pdf.

We also briefly discuss an interesting episode of a podcast I found on small service business operating issues at a place you might not look--check out http://macbreaktech.com/63/making-mac-your-business/ for an interesting listen that really isn't very MacIntosh (or even computer) centric--just a general discussion of issues facing small service businesses.

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

The self-employment tax is our topic for this week, specifically dealing with two topics.  We revisit an issue last visited in the early days of the podcast (back in June 2005) of the treatment of LLC members for self-employment tax purposes.  We look specifically at the case authorities we have (which are scant, and not terribly promising for LLC members), the IRS's proposed regulations that were controversial when issued, and what options exist for dealing with the issue today.

As well, we revisit an issue raised in a February podcast, as the IRS unofficially "clarifies" their position on the self-employment tax treatment of Qualified Joint Ventures that is presented in the Form 1065 instructions and were discussed in the Tax Talk Today webcast and podcast from back in January.

The materials can be downloaded at http://www.edzollars.com/2008-03-24_Self_Employment.pdf.

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

The question of whether a problem on a return was an error or a method of accounting is important, as we'll discuss this week looking at the Sixth Circuit's ruling in the case of Huffman v. Commissioner, where the appeals court sustained the 20006 ruling of the Tax Court (126 TC 322) that the CPA's consistent flawed attempt to calculate inventory as prescribed by the regulations for the dollar-value, link-chain LIFO method. 

The resolution of this matter in favor of the IRS allowed the IRS to get at what would otherwise have been out of reach errors in years closed for assessment by moving that income into years that were open under the provisions of §481.

The materials for this podcast can be found at http://www.edzollars.com/2008-03-17_CPA_Says_Error.pdf .

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

This week we look at the Tax Court's second pass at the case of Hubert v. Commissioner, TC Memo 2008-46, a case that sent back to the Tax Court by the Sixth Circuit Court of Appeals to decide if the LLC debt restoration provision made the taxpayer the payer of last resort under the Sixth Circuit's test.  The Tax Court comes back saying no.

The materials can be found at http://www.edzollars.com/2008-03-10_Risky_Business.pdf .

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

The IRS has issued a safe harbor treatment for §1031 exchanges involving property that previously had or subsequently has personal use.  Revenue Procedure 2008-16 outlines the tests taxpayers can meet to be given safe harbor status on the question of the properties being held for investment or business use to qualify for §1031 status.

The materials for the podcast can be found at http://www.edzollars.com/2008-03-02_1031_Exchange.pdf .

The podcast is sponsored by http://www.leimbergservices.com .

We revisit the issue of what exactly is timely filing, revisiting an issue last covered in a podcast back in October of 2005.  This time we look at the Tenth Circuit's opinion in the case of Gibson v. Commissioner, a case that illustrates how a taxpayer who thought he was complying with the requirements to prove a timely filing of his Tax Court petition managed to find a way to not get the benefit he thought he had.

The materials are available at http://www.edzollars.com/2008-02-25_Timely_Filing_PodcastII.pdf .

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

This podcast was originally recorded to go up last week, but the new tax bill displaced it so a week late we'll look at something that might have escaped your notice in the tax bill passed last May.  This podcast discusses an issue highlighted in, of all places, the instructions to Form 1065.  The issue is the side effect that occurs when married taxpayers holding rental property in an LLC or other form eligible to elect Qualified Joint Venture Treatment under §761(f) elect to be treated as a Qualified Joint Venture. 

The effect is that the rental income (or loss) is no longer exempted from being treated as self-employment income, but now is treated as such.  We'll discuss why this is the case, as well as the interesting location the IRS chose to give us the details of this impact as well as how to actually make the election under §761(f) for any entity.

The materials for the podcast are located at http://www.edzollars.com/2008-02-11_Joint_Venture.pdf .

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

Congress passed the Economic Stimulus Package of 2008 this week that makes a few, but significant, tax law changes for 2008.  This podcast talks about what Congress did and what we need to do about it.

Materials are available at http://www.edzollars.com/2008-02-09_Economic_Stimulus.pdf .

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

A listener who was following along in some discussions on the Arizona Society of CPAs sent me an email suggesting that perhaps it might be useful to look at the issues involved with LLCs and S corporations.  This week we will look at this issue, one that often doesn't get covered well since the topic cuts across what is often covered in partnership discussions (the use of LLCs) and S corporations (where often LLCs are presented as an alternative to, rather than a potential form of, an S corporation).

The podcast covers issues that arise when a single member LLC is used to hold S corporation stock, as well as when an LLC elects corporate status and wishes to be taxed under the S corporation rules.

The materials are at http://edzollars.com/2008-02-04_S_Corporation.pdf .

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

The issue of what is a capital asset is looked at in the Ninth Circuit's decision in Trantina v. United States, 2008 TNT 7-8.  In this case, an insurance agent was arguing that payments received from State Farm should have been taxed to him at capital gain rather than ordinary income rates.  Unfortunately, the United States District Court disagreed with the taxpayer, and the Ninth Circuit did so as well.

The materials are at available for download at http://www.edzollars.com/2008-01-28_Trantina.pdf .

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

This week we look at Revenue Procedure 2008-12 and final regulations under §7216, both of which deal with taxpayer authorizations for the use or disclosure of tax return information by tax preparers.  The new regulations contain a number of new requirements that will be imposed on tax preparers, and the Revenue Procedure contains specific language that must be used for taxpayers who are filing the Form 1040 series of forms.  These new requirements will take effect on January 1, 2009.

The written materials for the podcast can be downloaded from http://www.edzollars.com/2008-01-21_Consents.pdf .

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

The Supreme Court today decided the issue of whether investment fees paid by a trust was subject to the 2% of adjusted gross income limitation.  The Supreme Court in Knight v. Commissioner held that expenses are to be tested to determine if they are expenses that would not commonly or customarily be incurred by an individual--and only if they pass that test do they avoid the 2% limitation.

The materials are available for download at http://www.edzollars.com/2008-01-17_Knight_Time.pdf .

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

We look at a case where the IRS failed in an attempt to argue that a transaction had no economic substance or otherwise failed under the anti-abuse partnership regulations.  The case is Countryside Limited Partnership v. Commissioner, TC Memo 2008-3 where the taxpayers used the partnership distribution rules to allow two partners to have their interests in the partnership liquidated with no tax cost just prior to the partnership selling a significant asset at a gain.

The materials are located at http://www.edzollars.com/2008-01-14_Partnership.pdf .

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

We look at a case that illustrates the application of Section 108 in a situation with recourse debt.  While this case would likely have been covered by the relief in the Mortgage Foregiveness Debt Relief Act of 2007 if the property had been taken in 2007, it's still useful to review since many foreclosures won't qualify for the newly passed relief, but may still meet the insolvency test that worked for the taxpayers in this case.

The case is Keith v. Commissioner, TC Summary 2007-214 where the IRS's position did not garner much respect from the Tax Court.  We'll also look at what tax research gotchas may have caused the IRS to raise the positions that Tax Court so rapidly dismissed as just wrong and how to avoid those problems in your own practice.

The materials are located at http://www.edzollars.com/2008-01-08_Debt_Forgiveness.pdf .

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

The IRS celebrated the end of 2007 by releasing three Notices late on December 31 that provide guidance on the application of the revised preparer penalties contained in the Small Business and Work Opportunity Tax Act of 2007 that was passed last May.  The IRS had previously released interim relief in Notice 2007-54, but that relief was set to expire as 2007 did.

The centerpiece of this guidance is Notice 2008-13, which provides interim guidance on applying the §6694 preparer penalty standards.  The interim rules are not nearly as onerous as many had feared they would be, and need to be incorporated rapidly into our practices as tax season approaches.  Note, as well, that this guidance applies only until the IRS releases revised regulations, something the notice indicates they plan to do during 2008.

The materials for this podcast can be downloaded at http://www.edzollars.com/2008-01-01_6694.pdf .  Those materials include the full text of all three notices.

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

In this podcast, we look at a case where a shareholder attempted to argue that, in fact, the S corporation's election had been terminated a decade before due to an agreement with the founding shareholder that, in the taxpayer's view, created a second class of stock.  The case is Minton v. Commissioner, T.C. Memo 2007-372. 

The shareholder is not successful, though she does eventually succeed in unilaterally ending the S status of the corporation.  We'll look at both why the Tax Court didn't go along with her claim that a 1986 agreeement created a second class of stock, and the issues raised by her ability to unilaterally kill off the S election and what that suggests for those of us working with S corporations and/or succession plans.

The materials are available at http://www.edzollars.com/2007-12-31_S_Corporation_Class.pdf .

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

In this podcast we look at highlights of three of the five bills affecting taxation that Congress passed prior to leaving town, specifically the Tax Increase Prevention Act of 2007, Mortgage Forgiveness Debt Relief Act of 2007 and Tax Technical Corrections Act of 2007, all three of which have provisions that should be of interest to many of your clients. 

The written materials for the podcast can be downloaded from http://www.edzollars.com/2007-12-29_New_Laws.pdf .

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

In a recent Tax Court decision on the home sale exclusion under Section 121, the IRS and the taxpayers split the decision--the IRS lost in its attempt to claim the taxpayer did not use the property in question as his principal residence, but the taxpayer lost a portion of the deduction because a portion of the property was titled in the name of a partnership--and the court did not buy the taxpayer's theories that either the partnership was never formed or that the property had been distributed.  The case is Farah v. Commissioner, T.C. Memo 2007-369.

The materials for the podcast can be downloaded from http://www.edzollars.com/2007-12-26_Section_121.pdf .

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

The IRS has issued Notice 2008-1 that details how an S corporation shareholder can qualify for the self-employed health insurance deduction under §162(l) even if the policy is in the name of the shareholder. The notice is at odds with the implication contained in IRS Headliner 163 issued in May of 2006 that seemed to many to strongly suggest that personal ownership of the policy was fatal to the deduction.

We had previously discussed why, perhaps, that wasn't the case in a podcast back in June of 2006 that suggested listeners look at Revenue Ruling 61-146 and consider whether a similar program would not solve the problem the Headliner pointed out with individual policies. What the IRS has now done is, effectively, adopted that solution with official blessing.

The materials can be downloaded from http://www.edzollars.com/2007-12-26_S_Corporation.pdf.

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

After a not so short hiatus, the Tax Update podcast is again posted, this time looking at IRS Revenue Ruling 2008-5 that deals with issue of a taxpayer selling securities at a loss in a taxable account and then purchasing identical securities in a regular or Roth IRA.  The issue is one that practitioners have discussed for years, but which the IRS just now is getting around to issuing a formal ruling on.

The written materials for the podcast can be downloaded at http://www.edzollars.com/2007-12-21_IRA_Issue.pdf .

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