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Andy Hein, General Manager - Alma Telephone Company "Our company's recent and significant experience with Warinner, Gesinger & Associates came when they helped convert us from average schedule to cost reporting. In addition, WGA provided us with some strategic planning and fin

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Treasury official says FATCA and foreign tax credit guidance is forthcoming - Category : Federal Tax Updates
Lengthy and much awaited guidance on the Foreign Account Tax Compliance Act (FATCA), that expand the information reporting requirements imposed on foreign financial institutions (FFIs) and impose withholding, documentation, and reporting requirements with respect to certain payments made to specified foreign entities, is in the final stages of building clearance, a Treasury official said February 2. The proposed regs will provide for reduced due diligence requirements by financial institutions where possible, and additional lead time for implementation. Additionally, foreign tax credit guidance is also forthcoming under Code Sec. 909 and Code Sec. 901(m).

Proposed regs would flesh excise tax on post-2012 medical device sales - Category : Federal Tax Updates
IRS has issued proposed regs on the Code Sec. 4191 excise tax on post-2012 sales of medical devices, which was enacted by the Health Care and Education Reconciliation Act of 2010 in conjunction with the Patient Protection and Affordable Care Act. Manufacturers, importers, and producers of taxable medical devices would be affected by the proposed regs, which would flesh out the statutory provisions, as explained in this article.

Power purchase agreement was capital asset qualifying for capital gain treatment - Category : Federal Tax Updates
IRS has privately ruled that a power purchase agreement was a capital asset under Code Sec. 1221 in the hands of the wholly owned subsidiary of a parent engaged in electric power generation and distribution. Any gain from the assignment of this right to a buyer qualified for capital gain treatment.

Code Section 61—Gross receipts—computations.
Cash method trucking business owner was denied claim to reduce gross receipts by amounts contradicting what was reported on operative years' returns: taxpayer offered no proof that amounts originally reported weren't correct. (Sue Colvin, et vir. v. Commissioner, (2012) TC Memo 2012-26, 2012 RIA TC Memo ¶2012-26 )

Code Section 162—Business deductions—ins. premiums—reserve funds.
Tax Court properly determined that temporary staffing business/taxpayer wasn't entitled to Code Sec. 162 deduction for funds remaining in ins. co. (co.) loss fund, which taxpayer had deposited with same to cover its reimbursement obligations to primary insurer under worker's compensation and employer liability policies: notwithstanding taxpayer's argument, arguing that when reading policies and reimbursement contract as whole, there was requisite shifting of risk such that stated funds comprised deductible ins. premiums payable to primary insurer, record showed that there was no such shift in risk. Rather, funds were simply held as deposit in anticipation of potential future loss reimbursements. (F.W. Services, Inc. & Subsidiaries v. Comm., CA 5, 109 AFTR 2d ¶2012-391F.W. Services, Inc. & Subsidiaries v. Comm., CA 5, )

Code Section 162—Review of Tax Court decision—what must be proved—deficiencies—business deductions—effect of stipulations and settlements—limitations periods on assessment—suspensions—late returns—proof shifting—credible evidence—failure to timely file returns and accuracy-related substantial understatement and negligence penalties—burden of proof and production—joint returns—innocent spouse relief—knowledge or reason to know—allocation of items—equity—jurisdiction—effect of filing refund suits in other courts—frivolous claims—delay—sanctions.
Tax Court decision upholding deficiencies and penalties against married attorneys in amounts to which wife agreed in stipulated settlement was affirmed: wife, although attempting to raise appeal arguments regarding untimely assessments, incorrect stipulations, and/or IRS not meeting its burden of proof and production, was deemed to have waived her right to appeal since she had voluntarily consented to entering judgment in Tax Court and Tax Court had jurisdiction to do so. Fact that husband had in interim filed refund suit in Court of Federal Claims was irrelevant and didn't divest Tax Court's jurisdiction in these proceedings; in fact, that refund suit was precluded because there had been no collection and thus no basis for refund in 1st place. And there was nothing in record indicating that enforcing stipulated decision would result in manifest injustice. Further, wife had no standing to raise any arguments on appeal on husband's behalf. And post-judgment motions that she filed on basis of already rejected arguments were properly denied. Her request to sanction IRS and IRS attorneys was also properly denied. (Smith v. Comm., CA 10, 109 AFTR 2d ¶2012-394Smith v. Comm., CA 10, )

Code Section 167—Deprecation deductions—proof.
Trucking business owner was denied claims for additional depreciation deductions above amount IRS allowed: taxpayer offered no evidence to support additional deduction. (Sue Colvin, et vir. v. Commissioner, (2012) TC Memo 2012-26, 2012 RIA TC Memo ¶2012-26 )

Code Section 167—Depreciation deductions—accelerated cost recovery system—electricity produced from certain renewable resources—wind-powered generating facility.
LLC that is developing wind-powered generating facility won't be precluded from treating each wind turbine generator in its project as “placed in service” for purposes of allowance of Code Sec. 167 and Code Sec. 168 depreciation deductions and Code Sec. 45 renewable energy production credit, by reason of any temporarily limited capacity of transmitter's line if transmitter doesn't complete transmission upgrades by stated date, temporary operation of taxpayer's substation and transmission system to accommodate any such limitations of line until transmitter completes transmission, or any curtailment by purchaser due to transmission congestion. (PLR 201205005 )

Code Section 168—Deductions—depreciation—election not to deduct additional first year depreciation—extensions.
Taxpayer was granted 60-day extension from date this letter was issued to make election not to deduct additional 1st year depreciation under Code Sec. 168(k) for all property placed in service during tax years ending on stated dates that qualifies for additional first year depreciation deduction. (PLR 201205003 )

Code Section 274—Business deductions—meals and per diem expenses—strict substantiation—destroyed records.
Trucking business owner was denied claims for additional Schedule C deductions for meals and per diem expenses allegedly paid to drivers: taxpayer didn't prove that IRS had not properly accounted for stated meals expense; didn't provide credible evidence of how many drivers she had, how long on average they were away from home, or how much their per diem was; and didn't otherwise reasonably reconstruct per diem expenditures within meaning of section Reg. § 1.274-5T(c)(5). Arguments that records were destroyed in flood wasn't excuse (Sue Colvin, et vir. v. Commissioner, (2012) TC Memo 2012-26, 2012 RIA TC Memo ¶2012-26 )

Code Section 408—IRAs—waiver of rollover requirement—error by financial advisor.
Pursuant to Code Sec. 408(d)(3)(B), IRS waived 60-day rollover requirement where taxpayer's failure to timely roll over funds was due to error by his financial advisor. So, taxpayer was granted 60-day extension from date this letter was issued to make rollover contribution to IRA, and provided all other requirements of Code Sec. 408(d)(3) were met, contribution would be considered valid rollover contribution. (PLR 201205021 )

Code Section 412—Employee benefit plans—extension of amortization period for unfunded liabilities.
Taxpayer was granted conditional approval for modification of prior letter ruling approving 10-year extension of amortization period for pension plan's unfunded liabilities described under Code Sec. 412(b) and § 302(b)(2)(B) of ERISA for plan year beginning on stated date. (PLR 201205020 )

Code Section 412—Minimum funding standards—variances—defined benefit plans—restrictions on plan amendments.
IRS granted co.'s request that Code Sec. 412(c)(7)(A) and § 304(b) of ERISA do not apply to pension plan's amendment to cease benefit accruals effective stated date, and establishment of savings plan effective as of later stated date. (PLR 201205022 )

Code Section 431—Multiemployer plans—minimum funding standards—unfunded liabilities—extension of amortization periods.
Taxpayer was granted 5-year automatic extension under Code Sec. 431(d)(1)(A) for amortizing unfunded liabilities as of stated date for multiemployer plan. (PLR 201205023 )

Code Section 501—Exempt orgs.—exempt status—final adverse determinations.
IRS issued final adverse determination that org. didn't qualify for Code Sec. 501(c)(3) exempt status, effective date of its incorporation, where corp.'s proposed activities would result in its net earnings substantially benefitting related for-profit corp., its officers and shareholders. (PLR 201205010 )

Code Section 501—Exempt orgs.—exempt status—final adverse determinations.
IRS issued final adverse determination revoking Code Sec. 501(c)(3) org.'s exempt status, effective stated date, where org. failed to file protest to proposed adverse determination within requisite 30 days. (PLR 201205011 )

Code Section 501—Exempt orgs.—exempt status—final adverse determinations.
IRS issued final adverse determination revoking org.'s exempt status as org. described in Code Sec. 501(c)(4) and Code Sec. 501(c)(6), effective stated date, where org. failed to file protest to proposed adverse determination within requisite 30 days. (PLR 201205014 )

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News & Notes

10/14/2006 - WGA 19th Annual Seminar Nov 28th - 29th, 2006 ...details

7/1/2006 - Gesinger Awarded Distinguished Associate Member Service Award ...details

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