Earlier this week the U.S. Tax Court issued a court-reviewed opinion finding that the IRS has been improperly calculating accuracy-related penalties in certain cases involving refundable credits (i.e., the earned income credit, the additional child tax credit, and the recovery rebate credit). Rand v. Commissioner, 141 T.C. No. 12.
Tax Court Rejects IRS Interpretation of Accuracy-Related Penalty Calculation
IRS Advisory Council Recommends Changes which Benefit Taxpayers and Practitioners
In its 2013 annual report, the IRS Advisory Council has made several recommendations which would be favorable to taxpayers. The Council recommends an expansion of voluntary correction programs for taxpayers who self-report problems from prior years as well as changes to allow practitioners to assist clients more quickly with faster processing of Forms 2848 and a review of the transcript request policy.
IRS may increasingly examine returns of partnerships
One IRS official has indicated that the focus of tax audits concerning small businesses may shift from corporations to varying types of partnerships. This is in part because partnerships have grown in number and have also become more complex.
France Aligns with the US in Fighting Tax Evasion
The U.S. Department of the Treasury has announced that the United States has signed an intergovernmental agreement (IGA) with France to implement the Foreign Account Tax Compliance Act (FATCA). Enacted in 2010, FATCA aims to curtail offshore tax evasion by facilitating the exchange of tax information.
IRS Announces Fast Track Settlement Now Available Nationwide!
The Internal Revenue Service has announced the nationwide rollout of a streamlined settlement program for small businesses and individuals under examination by the Small Business/ Self-Employed Division of the IRS. Previously, this program was available as a pilot program in only a handful of metropolitan areas across the country.
Wind energy production credit may be going away
Congress is considering closing the wind energy production credit at the end of this year. This could affect a number of property owners and businesses that have set up wind turbines in California if the credit ends.
The tax liability of professional athletes in California
There appears to be controversy concerning the manner that professional athletes are taxed in the state of California. The average NFL player earns $2 million. California's personal income tax rate is now at 13.3 percent - the highest in the United States. For professional athletes, this could mean combined taxes of close to 60 percent. When anyone does the math, one understands just how much these athletes are expected to pay in taxes.
IRS Announces 2014 Unified Credit Amount
On October 31, 2013, the IRS issued Rev. Proc. 2013-35 in which it announced that the Unified Credit Against Estate Tax for decedents dying in 2014 is $5,340,000 per person. This is a $90,000 increase for inflation. The IRS also confirmed that the annual gift tax exclusion amount will remain at $14,000. Rev. Proc. 2013-35, which can be found here, announces all inflation-adjusted items for 2014 taxes.
