MSCPA REGIONAL FORUMS - 2007

SUMMARY OF OUTLINES

 

INDIVIDUALS

Author: Richard Hellmold

 

New Laws

1.) Key Provisions in the Pension Protection Act of 2006

2.) Key Provisions in the Tax Relief and Health Care Act of 2006

3.) President signs spending bill containing Small Business and Work Opportunity Tax Act

Updated Regulations

1.) Regs would knock out income tax advantages of private annuities   Preamble to Prop Reg 10/17/2006; Prop Reg 1.72-6, Prop Reg 1.1001-1; IR 2006-161

2.) “Qualified appraisal” and “qualified appraiser” defined for charitable contribution deduction and penalty - Notice 2006-96, 2006-46 IRB

3.) Temp and proposed Regs. liberalize some tax shelter disclosure rules but toughen others   T.D. 9295, 11/01/2006; Preamble to Prop Reg 11/01/2006; Preamble to Prop Reg 11/01/2006; Preamble to Prop Reg 11/01/2006; Reg. 1.6011-4T; Prop Reg 1.6011-4;IR 2006-167; Prop Reg 301.6111-3; Prop Reg 301.6112-1

Cases and Rulings

1.) Casual gamblers had to report winnings despite larger losses     Spencer, TC Summary Opinion 2006-95

2.) Rollover from decedent's IRA to surviving spouse's IRA kills 10% penalty tax exception  Charlotte and Charles T. Gee, 127 TC No. 1 (2006)

3.) ISO stock losses held subject to capital loss limitations for AMT purposes   Paul Norman v. U. S., (DC Cal 07/19/2006 98 AFTR 2d ¶2006-5191

4.) Fifth Circuit affirms: dollar limits apply to AMT capital loss from worthless ISO stock   Merlo, (CA 5 7/17/2007) 100 AFTR 2d ¶2007-5058

5.) Tax Court again applies dollar limitations to ISO stock losses in computing AMT   Palahnuk, (2006) 127 TC No. 9

6.) Income recognized when stock options exercised, not when margin loan repaid    Palahnuk v. U.S., (CA FC 2/12/2007) 99 AFTR 2d ¶2007-444

7.) Valid Code Sec. 83(b) election causes gain on all ISO stock to be recognized for AMT  purposes     Kadillak (2006), 127 T.C. No. 13

8.) Income recognized when stock options exercised, not when sold to pay margin loan   Racine, TC Memo 2006-162

9.) Seventh Circuit holds income was recognized on option's exercise   Racine v. Comm., (CA 7 7/3/2007) 100 AFTR 2d ¶2007-5020

10.) Ninth Circuit finds income on exercise of stock options, not on sale to pay margin loan   U.S. v. Tuff (CA 9 12/4/2006), 98 AFTR 2d ¶2006-5851

11.) All payments under medical plan reimbursing nonqualifying beneficiaries are taxable    Rev Rul 2006-36, 2006-36 IRB

12.) Limited window to make tax-free IRA distributions for charitable purposes    Code Sec. 408(d)(8), as amended by Pension Protection Act of 2006 § 1201(a)

13.) Consistency duty required use of discounted estate tax value to calculate inherited art's COGS     Janis, (CA 9 8/21/2006), 98 AFTR 2d ¶ 2006-5353

14.) Statutory rules required use of discounted estate tax value to calculate inherited art's COGS     Janis, (CA 2 11/15/2006) 98 AFTR 2d ¶2006-5808

15.) New law toughens rules for contributions of fractional interests in tangible personal property     Code Sec. 170(o), Code Sec. 2055(g), Code Sec. 2522(e), as amended by Pension Protection Act of 2006 § 1218

16.) Filing and reporting guidance provided for Chapter 11 debtors in bankruptcy             Notice 2006-83, 2006-40 IRB

17.) Active-duty reservists get retroactive penalty relief from early retirement withdrawals     IR 2006-152

18.) Company owner's restorative payment stemming from trustee's embezzlement deductible as employee business expense       PLR 200640003

19.) Ferry boat operator allowed to deduct some meal costs over IRS's objection       Marc G. Bissonnette and Lillian I. Cone, (2006) 127 TC No. 10

20.) IRS updates list of treaties qualifying foreign dividends for preferential rates      Notice 2006-101, 2006-47 IRB

21.) Entire M&IE reimbursement is wages if excess over deemed substantiated rate isn't established       Rev Rul 2006-56, 2006-46 IRB 874; IR 2006-175

22.) Taxpayer who failed to appear lost right to intervene in ex-spouse's innocent spouse case   Tipton, (2006) 127 TC No. 15

23.) No theft loss deduction based on estimate of unrecoverable amount      Johnson v. U.S., (Ct Fed Cl 12/21/2006) 99 AFTR 2d ¶2007-308

24.) Home sale to accommodate pregnant joint owner qualifies for reduced homesale exclusion   PLR 200652041

25.) Second marriage resulting in big family qualified homeseller for reduced maximum exclusion                                    PLR 200725018

26.) New guidance explains post-'06 rollover option for nonspouse beneficiaries of qualified plan accounts       Notice 2007-7, 2007-5 IRB; IR 2007-7

27.) IRS explains how older individuals can make nontaxable transfers from IRAs to charity   Notice 2007-7, 2007-5 IRB; IR 2007-7

28.) Board chairman's indemnification of restaurant's loss wasn't deductible     Tigrett v. U.S. (CA 6 1/12/2007) 99 AFTR 2d ¶2007-351

29.) Tuition at school to treat learning disabilities is deductible medical expense   PLR 200521003

30.) Restorative payment for bad IRA investment advice eligible for “late” rollover              PLR 200705031

31.) Shareholder/employee's unpaid advance was miscellaneous itemized deduction    Graves, (CA 9 2/8/2007) 99 AFTR 2d ¶2007-480

32.) Tax Court says tournament poker is subject to Code. Sec. 165(d) limit on gambling losses   George E. and Gloria Tschetschot, TC Memo 2007-38

33.) Preparer's fraud keeps taxpayer's income tax return open indefinitely   Vincent Allen, (2007) 128 TC No. 4

34.) Ninth Circuit upholds passive loss Regs.' self-rental rule   Beecher, (CA9, 3/23/2007), AFTR 2d ¶2007-712

35.) Tax Court OKs aggregation of losing equestrian activity with profitable design business   Topping, TC Memo 2007-92

36.) Endorsing nonqualified annuity issuer's check to other issuer for second annuity is taxable  Rev Rul 2007-24, 2007-21 IRB

37.) Appeals Court upholds check-the-box Regs., finds sole LLC owner liable for payroll taxes   McNamee v. Treasury, (CA 2 05/23/2007) 99 AFTR 2d 2007-998

38.) IRS shoots down enhanced tax break for wrap accounts                 Internal Legal Memorandum 200721015

39.) Court rejects use of annuity tables to determine estate tax value of lottery payments   Negron v. U.S., (DC Oh 6/4/2007) 99 AFTR 2d ¶2007-1047

40.) IRS memo explains how taxpayers treat real property tax rebates     Internal Legal Memorandum 200721017

41.) Settlement with stockbroker yielded capital gain        PLR 200724012

42.) California early distribution tax is deductible for federal tax purposes     Office of Chief Counsel IRS Memorandum 20072201F

43.) Partnership's wagering gains serve to boost partner's personal wagering loss deduction    Internal Legal Memorandum 200725036

Other Items of Interest

1.) IRS prepares taxpayers for tough new offer in compromise rules that take effect July 16   Notice 2006-68, 2006-31 IRB; IR 2006-106; Fact Sheet 2006-22

2.) Patenting of tax plans and strategies comes under Congressional scrutiny

3.) AICPA wants Congress to restrict patenting of tax strategies

4.) Goodie Bags

5.) IRS unveils 2007 list of notorious tax scams—the “Dirty Dozen”    IR 2007-37

6.) Joint Committee Staff highlights AMT's widening net and options for reform                  Joint Committee on Taxation, Present Law And Background Relating To The Individual Alternative Minimum Tax (JCX-10-07), Mar. 5, 2007

7.) What are your chances for being audited? Latest IRS data book provides some clues      2006 Data Book (Pub 55B, March 2007); IR 2007-63

 

Corporations

Mark H. Misselbeck, C.P.A., M.S.T.

Levine, Katz, Nannis + Solomon, P.C.

(781) 453-8700       MMisselbeck@LKNSCPA.com

 

1. CCH - IRS Issues Temporary and Proposed Code Sec. 199 Regulations Reflecting TIPRA Changes (T.D. 9293; NPRM REG-127819-06)

2. CCH - LTR-RUL, UIL No. 1502.06-00 Regulations governing consolidated returns (May v. may not file consolidated returns); Liability for tax. IRS Letter Ruling 200643001 (Jul. 26, 2006)

3. CCH - LTR-RUL, UIL No. 0301.00-00 Distributions of property. UIL No. 1502.21-00 Regulations governing consolidated returns (May v. may not file consolidated returns); Consolidated net operating loss deduction. UIL No. 9100.22-00 Extension of time for making certain elections; Other. IRS Letter Ruling 200645007 (Jun. 22, 2006)

4. CCH - LTR-RUL, UIL No. 0301.00-00 Distributions of property. UIL No. 0338.01-02 Certain stock purchases treated as asset acquisitions; Express election; Time in which election must be made. UIL No. 9100.06-00 Extension of time for making certain elections; Section 338(g); Election under section 1.338-1T(c)(1). IRS Letter Ruling 200646013 (Aug. 11, 2006)

5. CCH - LTR-RUL, UIL No. 1031.02-00 Exchange of property held for productive use or investment; Like kind property. IRS Letter Ruling 200649028 (Sep. 08, 2006)

6. CCH - NEWS-FEDERAL, 2007TAXDAY, (Dec. 14, 2006), Item #J.2, Corporation Could Not Allocate Portion of Stock Redemption Price to Officer's Covenant Not to Compete (Becker, TC Memo)

 

7. CCH - LTR-RUL, UIL No. 0332.00-00 Complete liquidation of subsidiaries. UIL No. 0351.00-00 Transfer to corporation controlled by transferor. IRS Letter Ruling 200701019 (Oct. 05, 2006)

 

8. CCH - IRS-ANNCMT, 2007FED ¶46,314 Nonqualified deferred compensation: Compliance resolution program: Discounted stock rights: Backdated stock options. --, Announcement 2007-18 I.R.B. 2007-9 (February 8, 2007)

9. CCH - NEWS-FEDERAL, 2007TAXDAY, (Feb. 27, 2007), Item #I.3, IRS Issues Final Regulations Governing Depreciation of MACRS Property Acquired in Like-Kind Exchange or as a Result of Involuntary Conversion (T.D. 9314)

 10. CCH - LTR-RUL, UIL No. 0263.13-00 Capital expenditures (Deductible v. not deductible); Acquisition of property, intangibles. UIL No. 0461.06-01 General rule for taxable year of deduction (Year paid v. not year paid); Incurred liabilities; Accrual basis. IRS Letter Ruling 200709003 (Sep. 18, 2006)

11. CCH - NEWS-FEDERAL, 2007TAXDAY, (Mar. 07, 2007), Item #J.1, Expenses Related to Storage of Manufactured Homes Have to Be Capitalized (LOAD, Inc., TCM)

12. CCH - NEWS-FEDERAL, 2007TAXDAY, (Mar. 09, 2007), Item #J.1, Non-CPA Accounting Firm Was Qualified Personal Services Corporation Subject to Flat Tax (Rainbow Tax Service, TC)

 

13. CCH - NEWS-FEDERAL, 2007TAXDAY, (Mar. 20, 2007), Item #I.1, Final, Temporary and Proposed Regulations Address Continuity of Interest Requirement (T.D. 9316; NPRM REG-146247-06)

 

14. CCH - LTR-RUL, UIL No. 0355.00-00 Distribution of stock and securities of a controlled corporation. UIL No. 0355.01-01 Distribution of stock and securities of a controlled corporation; Spin-off; Split-off. IRS Letter Ruling 200718019 (Jan. 26, 2007)

15. CCH - NEWS-FEDERAL, 2007TAXDAY, (June 29, 2007), Item #I.6, LMSB Chief Reiterates that Restraint Policy Covers FIN 48 Workpapers

16. CCH - CCA-RUL, UIL No. 0409A.01-00 Inclusion in gross income of deferred compensation under nonqualified deferred compensation plans. IRS Letter Ruling 200728042 (May. 31, 2007)

17. CCH - NEWS-FEDERAL, 2007TAXDAY, (Sep. 11, 2007), Item #I.4, IRS Provides Relief for Compliance with Written Plan Requirements of Final 409A Regulations and Additional Guidance (IR-2007-157; TDNR HP-551; Notice 2007-78)

S-Corporations

By:  Maria Marchand

Outline

 

1.             The 2007 Small Business & Work Opportunity Tax Act of 2007 

 

2.             S Corporation Can’t Deduct Daycare for Shareholder’s Children - Settimo v. Commissioner, T.C. Memo 2006-261 (12/7/06)

 

3.             S Corporation Losses Denied Lack of Basis—Related Party Transfer Loans  Sid Paul Ruckriegel, et al. v. Commissioner, TC Memo 2006-78(4/18/06)

 

4.             Accuracy-Related Substantial Understatement Penalties - Frederic W. Thrane, Jr. v. Commissioner, TC Memo 2006-269 12/19/2006

 

5.             Taxpayer Did Not Prove True Debt; No Increase in S Corporation Basis  Ellinger v. United States, Cite as 98 AFTR 2d 2006-7903 (11/28/2006

6.             S Corporation owners were denied stepped-up basis claim for suspended loss carryback and refund on summary judgement.  ALPERT v. U.S., Cite as 99 AFTR 2d 2007-1788, 03/23/2007 

 

Partnerships

By:  Maria Marchand

Outline

 

1.             The 2007 Small Business & Work Opportunity Tax Act of 2007 

 

2.             Updates to Corporate and Partnership Tax Forms News Release 2007-138, 08/02/2007

 

3.             Former IRS manager was denied Code Sec.179 expense and Code Sec. 167 depreciation deduction & Partnership losses;  John Karason v. Commissioner, TC Memo 2007-103 , Code Sec(s) 167; 179.

 

4.             Entity Status-Disregarded Entities- Limited Liability Protection; Stearn & Company, L.L.C. v. U.S., 100 AFTR 2d 2007-5039,06/29/2007

 

5.             Procedure-Partner's Distributive Share Held in Escrow: Burke v. Comm.,99 AFTR 2d 2007-941 (1st Cir.)

 

6.             Income Tax-Transfer of Partnership Property to Partner   Rev. Rul 207-40, 2007-25IRB

 

7.             IRS Attempt to Capitalize Taxpayer's Code Section 212 Expenses Fails  Julie A. Toth v. Commissioner, 128 TC 1, Code Sec(s) 212; 195.

 

8.             In Touch Properties, LLC, David England, Tax Matters Partner. v. Commissioner, TC Memo 2007-105 , Code Sec(s) 7491.

 

Bankruptcy

Mark H. Misselbeck, C.P.A., M.S.T.

Levine, Katz, Nannis + Solomon, P.C.

(781) 453-8700       MMisselbeck@LKNSCPA.com

 

  1. Debtor Failed to Establish Nexus Between Profits Included in Income and Voluntary Transfer of Assets to Receiver; Debtor's Had Burden to Prove Entitlement to Refund (In re Steffen, DC Fla.)

 

  1. Attorney's Tax Debt Was Nondischargeable; Conduct Indicated Willful Evasion (In re Jacobs, DC Fla.)

 

  1. Individual's Disability Insurance Policy Payments Were Property of His Bankruptcy Estate; No Standing to Contest Tax Lien (In re Stinnett, CA-7)  

 

  1. Debtor Entitled to Recover Only to Extent Overpayment Exceeded Pre Refundable Portion of Child Tax Credit Is Part of Bankruptcy Estate (Law v. Stover, BAP-8)

 

  1. In re Charles A. White, Jr., Anita D. White, Debtors. Internal Revenue Service, Creditor-Appellee v. Charles A. White, Jr., Anita D. White, Debtors-Appellants and John F. Logan, Chapter 13 Trustee, Trustee. 

 

  1. LTR-RUL, UIL No. 0382.07-00 Limitation on net operating loss carry-forwards and built-in losses following ownership changes; Ownership change. UIL No. 0382.09-01 Limitation on net operating loss carry-forwards and built-in losses following ownership changes; Testing period; 3-year period. IRS Letter Ruling 200720012 (Jan. 25, 2007)

 

 

Practice & Procedures

Mark H. Misselbeck, C.P.A., M.S.T.

Levine, Katz, Nannis + Solomon, P.C.

(781) 453-8700       MMisselbeck@LKNSCPA.com

 

  1. Poker Tournament Sponsors Informed of Withholding and Information Reporting Obligations (Rev. Proc. 2007-57)

 

  1. US-DIST-CT, [2007-2 USTC ¶50,616], U.S. District Court, D.C., Murphy M. Hubbard, Plaintiff v. United States of America, et al., Defendants., Injunctive relief: Failure to file returns: Certified public accountant: Disbarment: Due process rights: Irreparable injury: Public interest. --, (August 3, 2007)

 

 

  1. US-CL-CT, [2007-2 USTC ¶50,615], U.S. Court of Federal Claims, Harold B. Wilson, Plaintiffs v. The United States, Defendant., Jurisdiction: Tax enforcement: Detection of frauds: Reward claim: Informer's right to award. --, (July 13, 2007

 

  1. TC, [CCH Dec. 57,087], Thomas J. and Bonnie F. Ratke v. Commissioner., Tax Court: Discovery : Work product doctrine. -- (September 5, 2007)

 

  1. US-CL-CT, [2007-2 USTC ¶50,618], U.S. Court of Federal Claims, JZ Buckingham Investments LLC, Plaintiff v. The United States, Defendant., Third-party subpoena: Undue burden: Attorney-client privilege: Work product privilege: Settlement privilege. --, (August 9, 2007)

 

  1. US-DIST-CT, [2007-2 USTC ¶50,619], U.S. District Court, No. Dist. N.Y., United States of America, Plaintiff v. Robert L. Schulz, We the People Foundation for Constitutional Education, Inc., and We the People Congress, Inc., Defendants., Abusive tax shelter: Promoter: Injunctive relief: Commercial speech: First Amendment violation. --, (August 9, 2007)

 

TAX ACCOUNTING

By:  Lorraine A. Travers

 

I.                     IRS Information Letter 2006-0056—Acceleration of interest income reporting on U.S. Savings Bonds

 

II.                   Deduction of Certain Meal and Incidental Expenses Allowed Ferryboat Captain—Bissonnette v. Comr., 127 T.C. No 10 (10/23/06)                                                            

 

III.                 Sale of Residence—Unforeseen Circumstance for Application of Gain Exemption—(A) PLR 200652041 & (B) PLR 200725018

 

IV.                 TAM 200701031—Prior TAM Does not Prevent IRS from Requiring Change in Inventory Method

 

V.                   Laid-off Mechanics Not Away from Home—Wasik v. Comr., T. C. Memo 2007-148 (6/13/07) & Stockwell v. Comr., T. C. Memo 2007-149 (6/13/07)

 

VI.                 PLR 200724012—Recovery of Previously Deducted Capital Loss Must be Reported as Long-Term Capital Gain

 

VII.               Like-Kind Exchanges:  (A)  Not Disqualified Because of Ownership by Disqualified Persons—PLR 200724007; (B) Granted between Related Parties—PLR 200730002; (C) Swap between Related Parties—PLR 200706001

 

VIII.             Safe-Harbor Accounting Method for Rotable Spare Parts—Rev. Proc. 2007-48

 

IX.                Rev. Proc. 2006-45 & 2006-46 for Automatic Changes of Accounting Period

 

X.                  Note Considered Advance Payment Includible in Income—Karns Prime & Fancy Food Ltd., v. Comr., No. 06-1031 (3d Cir. 7/20/07)

 

XI.                Improper Election Turns Ordinary Losses into Capital Losses—Knish v. Comr., T. C.  Memo, 2006-268

 

XII.              IRA Settlement Award Can be Rolled Over—PLR 200705031

 

XIII.            Failure to Follow Formalities Causes Loss of Medical Reimbursement Deduction--Francis v. Comr.,  T. C. Memo 2007-33 (2/8/07)

 

XIV.            Worthless loan by Company Owner not a Deduction on Schedule C—Qualifies as Itemized Deduction—Graves v. Comr., No. 04-75843 (9th Cir. 2/8/07)

 

XV.              Mischaracterized Payments in divorce Decree are not Alimony—Burns v. Comr., T. C. Summary 2007-43 (3/15/07)

 

XVI.            Loan to Potential Client Resulted in Business Bad Debt—PLR 200714008

 

XVII.          Equestrian Expenses Allowed as Part of Design Business—Topping v. Comr., T. C. Memo, 2007-92 (4/17/07)

 

XVIII.        Fees for Brokerage Accounts Are not Capital Costs—CCM 200721015

             

XIX.            Book Deal not a Separate Activity—Business Deductions Denied—Xiong v. Comr., T.C. Summary 2007-96 (6/14/07)

 

XX.              Taxpayers May Adopt Advance Trade Discount Method of Accounting—Rev. Proc. 2007-53--See also #X above and Westpac Pacific Food v. Comr., 451 F.3d 970 (9th Circ. 2006) Case

 

XXI.            Invalid §179 Election—SUV Expense Deduction Denied—Byard v. Comr., T.C. Summary 2007-120 (7/17/07)

 

ESTATES, GIFTS & TRUSTS OUTLINE

By:  Lorraine A. Travers

 

  1. BENEFICIARY ACTING AS TRUSTEE OF TRUST WILL NOT HOLD GENERAL POWER OF APPOINTMENT BECAUSE OF STATE LAW—PLR 200637021

 

  1. TRUST NOT ENTITLED TO CHARITY DEDUCTION FOR AMOUNTS APPOINTED TO CHARITY BY TRUST BENEFICIARY—BROWN-STONE V. U.S. NO. 04-4061-CV (2d Cir. 9/27/06)

 

  1. COURT VALUES TRANSFERS OF S CORPORATION STOCK WHERE NOTES FROM SONS  CONTAIN SELF-CANCELING CLAUSES—DALLAS V. COMR., T. C. MEMO 2006-212 (9/28/06)

 

  1. ANNUITIES PAYABLE TO ESTATE UPON DEATH ARE INCLUDIBLE IN GROSS ESTATE—DAVENPORT EST. V. COMR., T. C. MEMO 2006-215 (10/5/06)

 

  1. PROPOSED REGS PROVIDE GUIDANCE ON TAXATION OF EX-CHANGE OF PROPERTY FOR ANNUITY CONTRACT—REG-141901-05, 71 FED. REG. 61441 (10/18/06)

 

  1. DEDUCTION FOR INVESTMENT ADVISORY FEES PAID BY TRUST IS SUBJECT TO 2% FLOOR—RUDKIN TESTAMENTARY TRUST V. COMR., NO. 05-5151-ag (2d  Cir. 10/18/06)

 

  1. PROPERTY INCLUDED IN DECEDENT’S ESTATE BECAUSE OF IMPLIED AGREEMENT THAT SHE KEEP ECONOMIC BENEFITS—STEWART EST. V. COMR., T. C. MEMO 2006-225 (10/24/06)

 

  1. TRUST’S ASSIGNMENT OF DECEDENT’S IRA TO PECUNIARY LEGATEES RE-SULTS IN GROSS INCOME TO THE TRUST—CCA 200644020

 

  1. VALUE OF ART WORK USED FOR ESTATE TAX PURPOSES MUST BE USED AS COST BASIS FOR INCOME TAX PURPOSES—JANIS V. COMR., NO. 04-4443-ag (2d Cir. 11/15/06

 

  1. SURVIVING SPOUSE WHO INHERITED IRA MAY ROLLOVER ASSETS TAX FREE—PLR 200646026

 

  1. ESTATE CANNOT REQUIRE IRS TO REALLOCATE PAYMENT FROM ORIGINAL DESIGNATION MADE AT TIME OF PAYMENT—TAM 200648028

 

  1. ESTATE’S STOCK VALUED BY CONSIDERING FORESEEABLE REPURCHASE OF SOME SHARES AND SALE RESTRICTIONS—GIMBEL EST. V. COMR., T. C. MEMO 2006-270 (12/19/06)

 

  1. LIKE-KIND EXCHANGE BY LLC CREATED BY TRUST QUALIFIES FOR §1031 TREATMENT—PLR 200651030

 

  1. SPOUSE’S POWER TO REQUEST DISTRIBUTION MADE MARITAL TRUST PERMISSIBLE S CORPORATION SHAREHOLDER—PLR 200652006

 

  1. QTIP ELECTION THAT WAS NOT NECESSARY TO REDUCE ESTATE TAX LIABILITY TO ZERO IS NULL AND VOID—PLR 200702018

 

  1. REQUEST FOR WAIVER OF 60-DAY TIME PERIOD DENIED—PLR 200705034

 

  1. IRS RULES ON TRANSFER FOR VALUE EXCEPTION IN TRUST TO TRUST TRANSFERS OF INSURANCE CONTRACT—REV. RUL. 2007-13

 

  1. MUPPET CREATOR’S ESTATE DENIED DEDUCTION AND REFUND BECAUSE WIFE DID NOT HAVE ENFORCEABLE CLAIM AGAINST ESTATE—EST. OF HEN-SON V. U.S. NO. 05 Civ. 8212 (S.D. N.Y. 1/12/07)

 

  1. DECEDENT CONSIDERED SOLE OWNER OF JOINT ACCOUNT AND ITS INCOME IS TAXED TO DECEDENT—FREEDMAN EST. V. COMR., T.C. MEMO 2007-61 (3/19/07)

 

  1. FAMILY LIMITED PARTNERSHIP ASSETS INCLUDED IN DECE-DENT’S ESTATE—ESTATE OF ERICKSON V. COMR., T.C. MEMO 2007-107 (4/30/07)

 

  1. IRS PROPOSES TO VALUE DEDUCTIONS BASED ON ACTUAL COSTS, EVEN IF COSTS OCCUR SUBSEQUENT TO DEATH—REG-143316-03, 72 Fed. Reg. 20080 (4/23/07)

 

  1. SURVIVING SPOUSE’S RENUNCIATION OF INTERESTS IN QTIP TRUST RESULTS IN GIFTS—PLR 200717016

 

  1. IRS ANNUITY TABLES ASCRIBE UNREASONABLE VALUE TO ESTATE’S FUTURE LOTTERY PAYMENTS—NEGRON V. U.S. NO. 1:05CV2305 (N.D. OHIO 6/14/07)

 

  1. PROPERTY WITHDRAWN FROM MARITAL TRUST INCLUDED IN DECEDENT’S ESTATE—ESTATE OF GORE V. COMR., T. C. MEMO 2007-169 (6/27/07)

 

  1. DAUGHTER’S ESTATE MAY DEDUCT FATHER’S LOAN TO A TRUST FOR HER BENEFIT BECAUSE LOAN WAS BONA FIDE—HICKS EST. V. COMR., T. C. MEMO 2007-182 (7/10/07)

 

  1. TRUSTEE’S UNFETTERED POWER TO WITHHOLD PRINCIPAL RESULTS IN TRUSTEE BEING TREATED AS OWNER OF TRUST—PLR 200730011

 

  1. TREASURY ISSUES PROPOSED REGULATIONS TO CONFLICT OVER DEDUCTION OF TRUST EXPENSES—REG-128224-06, 72 Fed. Reg. 41243 (7/27/07)

 

  1. TAX COURT UPHOLDS REG THAT APPLIES GST TAX TO POWER OF APPOINTMENT—EST. OF GERSON V. COMR., 127 T.C. NO. 11 (10/24/06)

 

  1. IRS DENIED ACCESS TO TRUST ASSETS FOR TAXPAYER’S TAX LIABILITY—U.S. V. EVSEROFF, NO. CV-00-6029 (E.D.N.Y. 9/27/06

 

  1. COURT EXPLORES FRACTIONAL INTEREST DISCOUNT FOR DECEDENT’S PAINTINGS—STONE V. U.S., NO. CO6-0259 TEH (N.D. CALIF. 5/25/07)

 

  1. IRS POSITION ON TRUST MATERIALITY PARTICIPATION CONFLICTS WITH PRIOR COURT HOLDING—TAM 200733023

 

  1. COURT REJECTS ADMINISTRATION EXPENSE DEDUCTION DESPITE STATE COURT ORDER—KESSLER V. U.S., NO. C 06-07492-RS (N.D. Cal. 8/6/07)

 

Pensions/Deferred Comp

By:  Christopher E Pulick

 

1.             Key Provisions in the Pension Protection Act of 2006

 

2.             Two Key Provisions in the Tax Relief and Health Care Act of 2006

3.             Rollover from decedent's IRA to surviving spouse's IRA kills 10% penalty tax exception  Charlotte and Charles T. Gee, 127 TC No. 1 (2006)

4.             All payments under medical plan reimbursing non-qualifying beneficiaries are taxable Rev Rul. 2006-36, 2006-36 IRB

5.             Limited window to make tax-free IRA distributions for charitable purposes    Code Sec. 408(d)(8), as amended by Pension Protection Act of 2006 § 1201(a)

6.             Active-duty reservists get retroactive penalty relief from early retirement withdrawals IR 2006-152

7.             New guidance explains post-'06 rollover option for non-spouse beneficiaries of qualified plan accounts Notice 2007-7, 2007-5 IRB; IR 2007-7

8.             IRS explains how older individuals can make nontaxable transfers from IRAs to a charity Notice 2007-7, 2007-5 IRB; IR 2007-7

9.                    2007 Pension Plan Limits, Employee Benefits providing notification electronically, and Canadian treaty update. Mandated E-filing for 5500’s.

10.           Mandated E-filing of 5500

11.           Employee Plan News, Fall 2007; Notices from IRS (CP 403 and 406 Notices)—Delinquency Notices FAQs