Source: http://www.carnahanlaw.com/news-and-miscellaneous-legal-topics-2006/
Timestamp: 2019-04-21 16:28:27
Document Index: 72678373

Matched Legal Cases: ['§\u2009117', '§\u2009509', '§\u20091', '§\u2009201', '§\u20092', '§\u200921', '§\u200924', '§\u200932', '§\u2009129', '§\u200921', '§\u2009151', '§\u20096502', '§\u20093461', '§\u2009301', '§\u20096306']

News and miscellaneous legal topics – 2006 - carnahanlaw
The Agreement contains a definition of “bundled transaction” that includes a de minimis test (and a related “primary” test for transactions including food, drugs, or medical equipment). If the taxable products represent 10% or less of the price of what would otherwise by considered a bundled transaction, then the sale falls outside the definition. Nebraska withdrew its request for a dollar cap and a compromise version of the rule was approved.
The Agreement’s definition of “sales price” includes “delivery charges”. A member state may, in turn, exclude from the definition of “delivery charges” charges for the delivery of “direct mail.” An interpretive rule was not passed.
Motions to adopt definitions of “digital products” at the Seattle meeting were withdrawn while the work group continues to refine the draft definitions.
The nondiscrimination regulations do not require a plan or insurance policy to provide coverage for any particular benefit, but provided benefits and any restrictions imposed on benefits must be applied uniformly to similarly situated individuals. Restrictions cannot be directed at participants or beneficiaries based on their particular health factors. A plan is permitted in some cases to provide more favorable treatment of individuals with medical needs. The regulations allow employers to operate wellness programs and to offer discounts, rebates, lower copayments or other incentives. The rules allow employer-paid health reimbursement arrangements (HRAs), even though the maximum reimbursement to any employee may vary based on the employee’s health. Amounts remaining at the end of the year may be used to reimburse medical expenses in later years. A separate set of regulations explains the requirements for church plans in existence on July 15, 1997 to be grandfathered from nondiscrimination requirements that apply to most group health plans. T.D. 9298, T.D. 9299.
Selling S corp securities held in the participant’s account before a nonallocation year; and
Owners of IRAs, age 70 1/2 or over, can directly transfer up to $100,000 per year to an eligible charitable organization from their IRA without incurring a taxable event for tax years 2006 and 2007. The amount is counted towards fulfilling the account owner’s required minimum distribution but no deduction is allowed for the donation. A special rule treats donated amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds as with regular distributions. Donations to private foundations, donor advised funds, supporting organizations, charitable remainder trusts, or gift annuities do not qualify for this treatment.
Household goods must be in a “good used condition or better” to be claimed as a tax deduction. Taxpayers must provide a qualified appraisal of any deduction of $500 or more for a single item, no matter what its condition.
including “extenders” made retroactive to the start of 2006 on 2006 returns (The official 2006 tax returns and instructions were printed without incorporating any of theses eleventh hour changes and the IRS has no intention of reprinting them).
For the State and Local General Sales Tax Deduction: Enter “ST” on the dotted line to the left of line 5, “State and local income taxes,” on Schedule A (Form 1040);
For the Higher Education Tuition and Fees Deduction: Enter “T” on the dotted line to the left of line 35, “Domestic production activities deduction” on Form 1040; except if claiming both the tuition and the domestic production activities deduction, enter “B” and attach a breakdown showing the amounts claimed for each deduction.
For the Educator Expense Adjustment to Income: Enter “E” on the dotted line to the left of line 23, “Archer MSA Deduction,” on Form 1040 (not Form 1040A); except if claiming both an Archer MSA deduction and the educator deduction, enter “B” and attach a breakdown showing the amounts claimed for each deduction.
“Virtual worlds are now producing real millionaires. … Let’s say you’ve been playing World of Warcraft for the last year and you’ve got a few level-60 characters. Well, according to the going rates on IGE or eBay, you’ve created an account that could be worth more than $1,000.”
The Streamlined Sales Tax (SST) State and Local Advisory Council (SLAC) debated bundled transactions, digital property, and multiple points of use (MPU), during a December 5, 2006 conference call. Retailers do not want to have to remit use tax on innumerable small components of exempt transactions (e.g., toys in cereal boxes, baskets in food baskets), but several states object to the Board mandating any such taxability determinations. A proposed amendment offered by Nebraska would permit states to exclude transactions that include royalty or franchise fees (desired by South Dakota) from the de minimis determination, and place a $10,000 cap on included taxable products (in addition to being 10% or less of the total transaction price) (sought by states concerned about “big-ticket” sales). Disagreement between states and businesses over whether a state may tax undefined digital products under its general definition of “tangible personal property” had been “somewhat resolved.”
Teacher’s classroom expense deduction;
Penalties on taxpayers filing frivolous returns and other bogus submissions can reach as high as $5,000. H.R. 6111 also enhances the IRS’s reward program for taxpayers who turn in tax cheaters, and authorizes continued IRS undercover operations and information sharing with law enforcement through 2007.
Type III are significantly involved in the activity of the public charity, including “functionally integrated” Type III supporting charities.
the IRS Business Master File or the grantee’s current IRS letter, recognizing the grantee as exempt from federal income tax and as a public charity;
Educational grants by donor advised funds to natural persons are now subject to excise taxes irrespective of whether the grant is excludable from the recipient’s income as a scholarship or fellowship under § 117. While this applies to grants made after August 17, 2006, the law does not apply to grants made or committed to an individual on or before this date with payments that extend beyond that date.
The IRS has published tables showing the amount of an individual’s income that is exempt from a notice of levy 12/7/06
The IRS has provided guidance that charitable contributions made by payroll deduction may meet the requirements of Code Sec. 170(f)(17) (requiring that taxpayer maintain a bank record or a written communication from the donee showing: (1) the donee organization’s name, (2) contribution date, and (3) contribution amount). The require for contributions made by payroll deduction are met if the taxpayer retains a pay stub, Form W-2 or other employer-furnished document that indicates the amount withheld for payment to the donee organization, along with a pledge card from the donee organization showing the donee’s name. Taxpayers may rely on the notice until revised regulations are issued and effective. Notice 2006-110, I.R.B. 2006-51, December 1, 2006.
West Virginia Supreme Court of Appeals held that “economic exploitation” without physical presence was sufficient to establish nexus 11/16/06
In Tax Commissioner of the State of West Virginia v. MBNA America Bank, N.A., CCH ¶400-436, November 21, 2006, the Supreme Court of Appeals of West Virginia held that “economic exploitation” without physical presence was sufficient to establish nexus for application of business franchise tax and corporation net income tax and did not violate the Commerce Clause. The principal business of MBNA at the relevant times in this case was issuing and servicing VISA and MasterCard credit cards. MBNA had no real, intangible or tangible personal property and no employees located in West Virginia. A substantial economic presence standard “incorporates due process `purposeful direction’ towards a state while examining the degree to which a company has exploited a local market.” Edson, 49 Tax Lawyer at 943. The Court found that “The Due Process Clause requires merely some minimum connection between a state and the person, property or transaction it seeks to tax. In contrast, a substantial nexus under the Commerce Clause requires that an entity’s contacts with the taxing state be more frequent and systematic in nature. Additionally, an entity’s exploitation of the market must be greater in degree than under the Due Process standard so that its economic presence can be characterized as significant or substantial. In sum, although a substantial economic presence standard is by nature more elastic than the bright-line physical presence test, we are convinced that when properly applied, a greater nexus is required under the substantial economic presence standard that under the minimum contacts analysis.” The Court noted that The record shows that MBNA continuously and systematically engaged in direct mail and telephone solicitation and promotion in West Virginia. Further, in tax year 1998, MBNA had significant gross receipts attributable to West Virginia customers.
IRS Adds Flexible Averaging Test To Meet 183-Day “Presence” For U.S. Possessions Residency T.D. 9297 (February 21, 2006) 11/16/06
The new alternative to the existing “presence test” bases its averaging assumptions on the fact that the 183-day requirement over a three-year period is the equivalent to 549 days.
who purchased personal property in a casual sale for less than $1,290, or (2) a mechanic’s lienor that repaired or improved certain residential property if the contract price with the owner is not more than $6,450. IRS News Release IR-2006-173, November 9, 2006.
Individuals claimed as dependents by other taxpayers: (1) the greater of $850, or (2) sum of $300 and individual’s earned income
AGI limits for the retirement contributions credit, also known as the Saver’s Credit (permanently extended by the PPA) adjusted for inflation for the first time in 2007:
Alternative minimum tax – 2007 inflation-adjusted tax rate tables for tax years beginning in 2007 for a child to whom the “kiddie tax” applies, the exemption amount for purposes of the alternative minimum tax may not exceed the sum of:
(1) such child’s earned income for the tax year, plus
Long-term care insurance limitations regarding eligible long-term care premiums includible in the term “medical care” are as follows:
“high deductible” health plan has an annual deductible of not less than $1,100 for self-only coverage ($2,200 for family coverage) and out-of-pocket expenses that do not exceed $5,500 for self-only coverage ($11,000 for family coverage).
mechanic’s lienor that repaired or improved certain residential property if the contract price with the owner is not more than $6,450;
Attorneys’ fee award limitation is $170 per hour.
The Pension Protection Act of 2006 permits specified individuals to make contributions from their Individual Retirement Accounts (“IRA”) to certain public charities without including the amounts in the contributor’s income 11/16/06
Distributions from IRAs to supporting organizations (§ 509(a)(3)) are not excludable from the IRA holder’s income. In addition, distributions from private foundations to certain supporting organizations are not qualifying distributions and may be taxable expenditures for the private foundation. Announcement 2006-93, I.R.B. 2006-48, November 7, 2006.
a. Page 1, the signature page, and pages 2 and 3 (Parts IV and IV-A) of Schedule A from the organization’s most recently filed Form 990 or 990-EZ; or
The organization must write at the top of the request”509(a)(3) Pension Protection Act”, and mail or fax the complete request for reclassification to:
If employers routinely pay per diem allowances exceeding federal per diem rates, but do not track the allowances and require the employees either to actually substantiate all the expenses, or require the employees to pay back the excess amounts, and do not include the excess amounts in the employee’s income and wages, then the entire amount of the expense allowances is treated as a non-accountable plan and is subject to income and employment tax. Rev. Rul. 2006-56, I.R.B. 2006-46, 874, IRS News Release IR-2006-175, November 9, 2006.
Employers may use an “accountable plan” to reimburse employees for expenses incurred in carrying out their employment and the reimbursements are not included in the employee’s income and they are not required to substantiate expenses on their return. Employee expenses paid under a non accountable plan can be miscellaneous itemized deductions if substantiated and allowable.To qualify as an accountable plan, the arrangement must meet three requirements:
Under proposed IRS regulations (effective immediately, with limited transition relief) the transferor of the property exchanged for an annuity is taxed on any appreciation in the property as if that transferor had sold the property for cash and then used the proceeds to purchase an annuity contract. Under previous guidance, the transferor recognized the gain evenly over the annuitant’s life expectancy. IRS News Release IR-2006-161 (October 17, 2006).
In arbitration the IRS and the taxpayer agree to have a third party make a decision about a factual issue that will be binding on both of them. The taxpayer or the IRS can request arbitration and jointly select an Appeals or a non-IRS Arbitrator from any local or national organization that provides a roster of neutrals when a limited number of factual issues remain unresolved during the course of an appeal. The permanent arbitration procedure may be used to resolve issues while a case is in Appeals, after settlement discussions are unsuccessful and, generally, when all other issues are resolved except specific factual issues for which arbitration is being requested. Arbitration is not available for all issues, e.g., legal issues, issues already in any court, issues in a taxpayer’s case designated for litigation, collection cases with certain exceptions, and frivolous issues. IRS News Release IR-2006-163, October 18, 2006.
The American Jobs Creation Act of 2004 (2004 Jobs Act), Code Sec. 170(f)(11), requires that taxpayers obtain a qualified appraisal for donated property (excluding publicly-traded securities or inventory.) if the taxpayer claims a deduction exceeding $5,000. In the Pension Protection Act of 2006 (PPA) defined a “qualified appraiser” and a “qualified appraisal”, and imposes a new penalty for excessive valuations that the appraiser knew or should have known would be used on a tax return. A “qualified appraisal” must be conducted by a “qualified appraiser” in accordance with professional standards such as those developed by the Appraisal Standards Board, and must comply with requirements in Reg. § 1.170A-13(c), which spells out the elements of a qualified appraisal and the information that must be included. To be qualified, an appraiser must:
The appraiser can declare that he or she meets the requirements for being a qualified appraiser. Unless inconsistent with the new Tax Code requirements, the donor must attach an appraisal summary to the donor’s tax return and must comply with existing requirements that the donor maintain records that:
Describe the property, its value, and if relevant, the property’s basis.
Debtors that fail to comply with requests for information from an auditing firm risk civil penalties. The bankruptcy audit is not the same as a tax audit or financial audit conducted in accordance with generally accepted auditing standards because bankruptcy documents are typically not prepared using generally accepted accounting principles, and EOUST has developed bankruptcy auditing standards. At least one out of every 250 individual Chapter 7 and Chapter 13 cases filed in a judicial district will be randomly selected for audit. A case will also be selected for audit if the debtor’s income or expenses reflect greater than average variance from the statistical norm of the district in which the case was filed. The Executive Office for U.S. Trustees (EOUST) announced audits of individual bankruptcy cases began on October 20, 2006. Debtors will be required to supply tax returns, account statements, pay stubs, and other documents. After reviewing the debtor’s information, the auditor will file a report with the bankruptcy court. The auditor will alert the court if he or she finds any material misstatement of income, expenditures or assets. EOUST and the Justice Department may take civil or criminal action against a debtor if a material misstatement is found and not explained.
The New Jersey Supreme Court held that New Jersey may apply its corporation business tax notwithstanding a taxpayer’s lack of a physical presence in the state. 10/26/06
affirming the lower court and holding that the U.S. Supreme Court’s holding in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), should be limited to the area of sales and use tax nexus. Lanco, Inc. v. Director, Division of Taxation, New Jersey Supreme Court, per curiam, No. A-89-05, October 12, 2006
The Pension Protection Act of 2006 (PPA) requires a “record” 10/25/06
(written communication from the charity (including the charity name, date and amount or a bank record such as a cancelled check) of ALL cash donations to charity. Clothing and household items donated after August 17, 2006 must be in “good” used condition or better or no deduction is allowed. The IRS has authority to deny deductions of items with minimal monetary values (e.g., used socks).
Payment obligations of a disregarded entity are taken into account only to the extent of the net value of the disregarded entity as of the date on which the partnership determines the partner’s share of partnership liabilities, except to the extent the owner of the disregarded entity otherwise is required to make a payment with respect to such obligation of the disregarded entity. The owner of the disregarded entity must report the entity’s net value to each partnership for which the disregarded entity may have one or more payment obligations, raising confidentiality concerns. T.D. 9289.
(pull-down menu under “I need to … ” “Set Up a Payment Plan)” available M-F 6am-12:30am; Sat 6am-10pm; Sun 4pm-midnight (EST) for individual taxpayers (or authorized representative) to self-qualify, apply for a payment agreement and receive immediate notification of approval. Interest and penalties will continue to accrue. To qualify, a taxpayer needs:
IRS issued “tie breaking” rules where multiple taxpayers claim same child 9/28/06
he parents —
the custodial parent releases the claim to the exemption to the noncustodial parent in a written declaration that the noncustodial parent attaches to the noncustodial parent’s tax return.
Section 152 was amended by § 201 of the Working Families Tax Relief Act of 2004 (WFTRA), Pub. L. No. 108-311, 118 Stat. 1169, effective for taxable years beginning after December 31, 2004, establishes a uniform definition of “qualifying child” under (1) head of household filing status under § 2(b), (2) the child and dependent care credit under § 21, (3) the child tax credit under § 24, (4) the earned income credit under § 32, (5) the exclusion for dependent care assistance under § 129 (which incorporates by reference the definition of qualifying child or other qualifying individual under § 21), and (6) the dependency deduction under § 151.
the definition of “digital products”. The latest efforts focused on defining 3 specific types of digital products: “audio visual works,” “audio works,” and “book.” Businesses have objected to states taxing other, undefined digital products under the state’s definition of “tangible personal property,” rather than enacting a separate imposition statute.
defining durable medical equipment” and approving in concept a list categorizing health care items. The SLAC was directed to draft an appropriate interpretive rule to implement this list.
The Board directed the SLAC to draft an interpretive rule for Board consideration on application of the existing Agreement definition of “bundled transaction.” The rule will provide that the sales price of the de minimis taxable products in a transaction subject to the definition’s 10% de minimis test will not be taxable, and the sales price of the taxable products that are not the primary portion of a transaction subject to the 50% primary test (applicable to food an medical products) will not be taxable. In both cases, states can deny a resale exemption or require payment of tax on the purchase price.
Final regulations effective September 6, 2006 reflect § 6502 restrictions pursuant to § 3461 of IRS Reform and Restructuring Act of 1998 (RRA ’98, P.L. 105-206) to IRS’s ability to extend the 10-year collection period, T.D.9284, 9/5/06, amending Reg. § 301.6502-1. The regulations address extension agreements executed on or after January 1, 2000. RRA ’98 limited the IRS and taxpayer ability to mutually agree to extend the 10 year limitations period to: (1) the time an installment agreement is entered into; or (2) prior to release of a levy, if the release occurs after the expiration of the original period of limitations on collection. 9/14/06
Form 990-T, used to report unrelated business income tax, has been designated a public record. Unrelated business income comes from any regularly carried on activity that is not substantially related to the organization’s exempt purpose. The organization’s need for income to conduct its program and further its mission does not affect the tax or the reporting obligations for unrelated business income.
Parent organizations that control subsidiary corporations have new disclosure requirements on IRS Form 990. Subsidiary corporations may be nonprofit or for-profit entities, and the subsidiary often pays interest, annuities, rents, or royalties to the nonprofit parent corporation. These payments to the nonprofit parent corporation by its subsidiaries are generally excluded from unrelated business income tax. Certain facts and circumstances in this parent-subsidiary relationship are subject to complex statutory provisions found in section 512(b)(13) of the Internal Revenue Code. IRC Section 6033(h) reporting requirements: (1) List the amount of any interest, annuities, royalties, or rents received from each controlled entity; (2) List any loans made to each controlled entity; and (3) List any transfer of funds between the controlling organization and each controlled entity. For more information.
After receiving a levy, a bank’s setoff of a taxpayer’s account does not excuse the bank from honoring the levy. A bank’s liability for honoring a levy is determined as of the time it receives the notice of levy. A subsequent setoff does not eliminate Bank A’s liability to the Service. While a bank priority interest under section 6323(b)(10) does not relieve the bank of its obligation to honor the levy, the Service may release a levy when a bank proves its superpriority interest under section 6323(b)(10). A Bank can contact the Service informally, or timely file a wrongful levy suit in federal district court pursuant to section 7426(a)(1), otherwise, the statute of limitations bars such a suit.
PCAs and their employees must observe all of the Internal Revenue Code’s (“IRC”) protections for taxpayer rights in the collection process to the same extent as IRS employees, § 6306(b)(2);
a 3 year pilot program targeting tip reporting in the food and beverage industry. Employers who participate in ATIP report tip income of their employees based on a formula that uses a percentage of gross receipts, which are generally attributed among employees based on employer practices. Participation in ATIP is entirely voluntary for both employers and employees. An employer may participate in ATIP if, in the year prior to enrollment, at least 20 percent of the employer’s gross receipts from food and beverage sales are charge receipts showing charged tips and at least 75 percent of the employer’s tip-earning employees agree to participate. This test is done for each of the employer’s establishments that seek to enroll in ATIP. To enroll in ATIP, an eligible employer checks the designated box on its Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. For employers participating in ATIP, the IRS will not initiate employer-only Code Sec. 3121(q) examinations and tip income reporting requirements will be reduced. Participating employees will not need to keep a daily tip log and the IRS will not initiate an employee tip examination during ATIP participation. Rev Proc. 2006-30 (July 31, 2006).
The Tax Court held it did not have jurisdiction to decide the appeal of denial of innocent spouse relief in the case of a “non deficiency stand-alone” petition 8/3/06
“non deficiency” because the IRS accepted his amended return as filed and asserted no deficiency against him, and “stand-alone” because his claim for innocent spouse relief was made under section 6015 and not as part of a deficiency action or in response to an IRS decision to begin collecting his tax debt through liens or levies. Petitioner’s wife did not report embezzlement income on their joint 1999 return. After she was caught, Petitioner and his wife filed an amended tax return that reported the embezzlement income. Petitioner then applied for relief from joint and several liability under IRC sec. 6015(f). Billings v. Commissioner, Dkt. No. 6148-03, 127 TC –, No. 2, July 25, 2006, CCH Dec. 56,572. The Tax Court will no longer adhere to its prior holding that sec. 6015(e) gives us jurisdiction over such non deficiency stand-alone petitions. Ewing v. Commissioner, 118 T.C. 494 (2002), rev’d 439 F.3d 1009 (9th Cir. 2006).
Effective July 16, 2006, the Tax Increase Prevention and Reconciliation Act of 2005 (H.R. 4297) requires that a non-refundable 20% of the offer deposit accompany submission of lump-sum offers in compromise (IRC section 7809(b) and Treasury Regulation 301.7122-1(h)), and the first installment accompany submission of periodic payment offers. Taxpayers must specify in writing when submitting their offers how to apply the payments to the tax, penalty and interest due. Otherwise, the IRS will apply the payments in the best interest of the government (IRC section 7122(c)(2)(A)). Taxpayers qualifying for the low-income exemption or filing a doubt-as-to- liability offer only are not liable for paying the application fee, or the payments imposed by TIPRA section 509.
The IRS will notify the trustee within 60 days from the date a “complete” (including all documents and valid return) request is received if the return is being selected for examination or accepted as filed. If selected for examination, the IRS will notify the trustee of any tax due within 180 days after the request is received or within additional time permitted by the bankruptcy court.
which will almost always be a higher rate, and its increase under the Tax Increase Prevention and Reconciliation Act (TIPRA), and is one of the revenue raisers in TIPRA. “Unearned income” (e.g., dividends and capital gains) that would have been taxed at the child’s rate if the child was under age 14 under prior law will now be taxed at the parent’s rate for children ages 14 to 17 when overall income exceeds $1,700. There is no opportunity to “undo” the sale of a 14-17 year old’s stock in early 2006.
Not included are: the state and local sales tax deduction, tuition deduction, some employment tax credits, teacher’s classroom expense deduction, limited charitable deduction for non-itemizers, and other incentives. Other extenders may be attached to other pending legislation. This is apparently a result of keeping the bill’s cost below $70MM so it would have “reconciliation protection” and not require 60 votes in the senate to pass.
because he filed returns for those years more than 2 years before filing his bankruptcy case, although after the IRS had prepared substitute returns, issued notices of deficiency, and assessed taxes, interest and penalties. The filer’s subjective intent and timeliness were determined to be irrelevant. Colsen, CA-8, 2006-1 USTC ¶50,300, affirming a BAP-8 decision, 2005-1 USTC ¶50,240. The United States asserted that a 1040 form filed by taxpayer after the IRS has gone to the trouble and expense of preparing substitute returns and assessing the relevant tax liability serves no purpose under the tax laws and thus cannot have been an “honest and genuine endeavor” to satisfy the tax laws as required by Beard, CCH Dec. 41,237, 82 T.C. 766, 774-79 (1984), aff’d 86-2 USTC ¶9496, 793 F.2d 139 (6th Cir. 1986) ( per curiam). The Sixth Circuit has ruled for the government in a similar situation in Hindenlang v. United States (In re Hindenlang), 99-1 USTC ¶50,214, 164 F.3d 1029, 1034-35 (6th Cir. 1999), cert. denied, 528 U.S. 810 (1999). the Fourth Circuit held that a debtor’s tardiness is relevant to the question of whether a 1040 form should be considered an honest and genuine attempt to comply with the tax laws, and decided that a purported return filed by a nonchalantly noncompliant debtor after the IRS estimated his tax liability did not meet the requirements of Beard. Moroney v. United States (In re Moroney), 2004-1 USTC ¶50,141, 352 F.3d 902, 906 (4th Cir. 2003). The Seventh Circuit has also refused to recognize a post-assessment filing as a return. Payne, 2006-1 USTC ¶50,106, 431 F.3d at 1057. The Supreme Court has observed that even admittedly fraudulent returns can be returns under the tax laws, if they “appeared on their faces to constitute endeavors to satisfy the law.” Badaracco v. Commissioner, 84-1 USTC ¶9150, 464 U.S. 386, 397 (1984).
The Eighth Circuit noted Mr. Colsen’s 1040 forms contained data that allowed the IRS to calculate his tax obligation more accurately, resulting in thousands of dollars of abatements of tax and interest, in contrast to the situation in Hindenlang, 99-1 USTC ¶50,214, 164 F.3d at 1031, where the taxpayer’s forms contained essentially the same information as the substitute forms that the IRS prepared and the calculation of tax did not change substantially.
S. 2721 was introduced on May 4, 2006 and referred to the Finance Committee, and is intended to establish a “bright-line” physical presence standard for state business activity taxes (BAT) 5/18/06
S. 2721 was introduced on May 4, 2006 and referred to the Finance Committee, and is intended to establish a “bright-line” physical presence standard for state business activity taxes (BAT) and extend the protections of P.L. 86-272 to all business activity taxes (not just net income taxes) has been introduced in the U.S. Senate. Similar legislation (H.R. 1956) introduced in the U.S. House of Representatives in 2005 was subsequently incorporated into H.R. 4845, introduced on March 2, 2006.
IRS Chief Counsel announced a new, stream-lined technical advice memoranda (TAM) process with accelerated 120 day deadline (currently loosely 180 days), plus “Case-specific” strategic advice (case-specific legal advice memorandum) and Industry“generic” advice (generic legal advice memorandum). Taxpayers may be allowed to participate but mandatory conferences as a matter of right. Taxpayers will have 10 days instead of 21 days to respond to additional information requests. CC-2006-13. The next annual TAM procedure is expected to be published in January 2007 as Rev. Proc. 2007-2, but the process may be adopted immediately.
An Ohio proposal permitting sellers to source intrastate sales on an origin basis and sales into the state from out-of-state locations on a destination basis or at a single statewide rate, and Buyer refund process if single rate exceeded the local rate, and a Texas proposal to permit use of intrastate origin basis without the single rate and refund options were both defeated. The Board approved contract terms for companies approved as a certified service providers (CSPs). Compensation to CSPs for “volunteer” sellers is from the taxes collected based on a formula and is the only compensation the CSPs can receive. Volunteer sellers are those that register through the SST site and does not have a legal requirement to register. The board also approved a number of interpretations to SST provisions. Pending is a definition of “digital goods”. The Governing Board will meet August 28-31, 2006, in Bismarck, North Dakota.
The Federal Trade Commission (“FTC”) announced a Business Opportunity Rule Notice of Proposed Rulemaking on April 5, 2006. A press release and copy of the Notice. 4/5/06