William P Cook

Tax Alerts

Tax Briefing(s)

ACA Repeal and Replacement 2016 Tax Year-In-Review Post-Election Tax Policy Update

Not all penalties/interest may be suspended for disaster victims
IRS Chief Counsel has clarified that taxpayers affected by disasters, who had taxes due prior to the start of the postponement period granted for disaster relief, and who did not pay before that due d...

Supreme Court upholds ERISA exemption for church-affiliated pension plans
The U.S. Supreme Court, in Advocate Health Care Network v. Stapleton, SCt., June 5, 2017, has held that a defined benefit (DB) plan maintained by a principal-purpose organization, one controlled by or...

Chief Counsel limits reach of Mescalero in employment tax discovery
In what is likely not to be the end of the matter, IRS Chief Counsel has advised that the Tax Court decision on Mescalero, 148 TC —, No. 11, Dec. 60,867, earlier this year does not stand for the...

Over- and underpayment interest rates remain same for third quarter 2017
Although the Federal Reserves’ gradual interest rate increases may eventually impact the interest rates that the IRS uses to bill underpayments and pay on overpayments, they have not yet reached...

Tax Court finds lack of profit motive in auto racing business
An automobile racing enthusiast lacked an actual profit motive in running his business, the Tax Court has recently held. The taxpayer genuinely enjoyed racing but his pattern of losses as well as &ldq...

Software engineer denied deductions for Executive MBA degree
Expenses for an MBA degree may or may not be deductible depending upon a taxpayer’s current employment situation. Take two close cases with opposite results:In Creigh, TC Summary Opinion 2017-26...

President directs IRS to exercise discretion in enforcement of “Johnson amendment”
An Executive Order, issued on May 4, directs the IRS to exercise maximum discretion in its enforcement of the "Johnson amendment" concerning Code Sec. 501(c)(3) charitable/religious organizations. &nb...

IRS updates FAQs on passport certification
In 2015, Congress added Code Sec. 7345 as part of the Fixing America’s Surface Transportation Act of 2015 (FAST Act). Upon receiving certification of seriously delinquent tax debt from...

No equitable relief from missing tax court deadline for innocent spouse review
The Third Circuit Court of Appeals has found that the Tax Court properly dismissed for lack of jurisdiction an individual’s petition for review of the IRS’s denial of innocent spouse relie...

Stock broker proves real estate professional status for rental losses
Winning real estate professional status –and the benefits gained from taking business deductions and losses from an “active” rather than “passive” business-- often depend...

CBO reports on top tax incentives/expenditures
The Congressional Budget Office (CBO) issued a report in mid-March about current tax incentives. Tax expenditures, CBPO explained, reduce the amount of revenue that is collected for any given set of s...

IRS updates 401(k) hardship distributions exam materials
The IRS Tax Exempt and Government Entities Division (TE/GE) has updated guidance used to determine whether a Code Sec. 401(k) plan hardship meets the safe-harbor standards set forth in applicable regu...

Employee consent requirements for employer refund claims released
The IRS recently issued the employee consent requirements that an employer need to adhere to in order to support a claim for refund of overpaid taxes under the Federal Insurance Contributions Act (FIC...

New Offers in Compromise policy starts April 27
The IRS informed taxpayers and tax professionals of its updated policy with regards to the Offer in Compromise (OIC) application process. OIC applications received on or after March 27, 2017, will now...

Tax refund offsets may be used toward unpaid debts
A taxpayer who incurs an unpaid debt may notice a reduction in his or her federal tax refund. The Treasury Offset Program is allowed to use all or part of a taxpayer’s federal refund to settle u...

Passport certifications will begin in early 2017, IRS posts on website
The IRS has informed taxpayers via its website that the agency will begin, in early 2017, to remit certifications to the U.S. State Department for individuals who are seriously delinquent in paying th...

Tax returns lacking ACA coverage status will not be rejected
The IRS has announced that it will continue to process individual returns that do not report the taxpayer’s health coverage status under the Affordable Care Act (ACA). The IRS will accept return...

Dentist persuades Tax Court of material participation in real estate business
The Tax Court determined, in Zarrinnegar v. Commissioner, TC Memo. 2017-34, that a dentist by profession, was a real estate professional, and therefore could deduct rental real estate losses. As such,...

IRS confirms automatic six-month extension for C corporations
The IRS has confirmed that a new revision of the Instructions for Form 7004 correctly reflects that calendar year C corporations are eligible for an automatic six-month extension. Code Sec. 6081(a) pr...

Future pension payouts not counted as asset in determining insolvency exclusion
The Tax Court, in Schieber v. Commissioner, TC Memo. 2017-32, found that the right to a continuing monthly payment state pension plan was not an asset in determining insolvency for purposes of exclusi...

AK - Interest rates increased for Q3 2017
The Alaska interest rate for most delinquent taxes increases to 4.75% (formerly, 4.5%) for the period July 1, 2017, through September 30, 2017. For that quarter, the oil and gas production tax interes...

AR - Taxability of transactions between construction contractor and subsidiary discussed
The Arkansas Department of Finance and Administration (department) issued a revenue legal counsel opinion clarifying that, for sales tax purposes, proposed transactions between a construction contract...

CA - BOE discusses updated rules
The California State Board of Equalization (BOE) notes two recent property tax rule amendments concerning corrections on the assessment roll and requests for certain extensions of time. The updates we...

CO - Rural health care preceptor tax credit amended
The Colorado Department of Revenue has amended the rule pertaining to the personal income rural health care preceptor credit in order to clarify the requirements for claiming the credit. Beginning Jan...

DE - Franchise tax increases enacted
Delaware Gov. John Carney has signed legislation that increases the maximum corporation franchise tax computed using either the authorized shares method or the assumed capital value method from $180,0...

FL - Exemption enacted for medical marijuana and marijuana delivery devices
A Florida sales and use tax exemption is enacted for marijuana and marijuana delivery devices. "Marijuana" is defined as all parts of any plant of the genus Cannabis, whether growing or not,...

GA - Taxpayer’s lack standing to challenge education tax credit
The Supreme Court of Georgia has upheld a lower court’s ruling that Georgia taxpayers lack standing to constitutionally challenge the qualified education tax credit available against corporate a...

HI - Guidance for withholding of tax on disposition of real property updated
The Hawaii Department of Taxation has updated its guidance on the withholding of tax on the disposition of Hawaii real property by nonresident persons. Every transferee/buyer is required to withhold a...

IL - Tax rate increase, domestic production activities addback, and other changes enacted in Illinois
Illinois budget legislation has been enacted over Gov. Bruce Rauner’s veto that increases corporate and personal income tax rates, creates an income and personal property replacement tax addback...

IN - Assessment upheld as taxpayer failed to establish employees were independent contractors
An Indiana corporate income taxpayer’s protest of an assessment of withholding tax was rejected because it failed to establish that certain workers on its payroll were independent contractors an...

IA - Taxpayer not entitled to capital gain deduction
A capital gains deduction claimed on an Iowa personal income tax return was properly disallowed because the taxpayer had not held the land for the requisite 10 year period and the sale was strictly a ...

LA - Payments authorized for owners of solar energy system affected by tax credit cap
The Louisiana Department of Revenue has issued a news release informing corporate and personal income taxpayers that it will process and pay claims for state tax credits to owners of qualifying reside...

ME - Budget bill repeals surcharge, makes other tax law changes
Maine Gov. Paul LePage has signed a budget bill makes various changes to personal income tax, property tax, hospital tax, real estate transfer tax, and tax administration provisions.Personal Income Ta...

MD - Taxpayers warned of new phone scam linked to IRS’s electronic federal tax payment system
The Comptroller of Maryland has issued a news release alerting personal income taxpayers to a new phone scam linked to the IRS’s Electronic Federal Tax Payment System (EFTPS) in which scammers c...

MS - Second amendment sales tax holiday set for August 25-27
The 2017 Mississippi Second Amendment Weekend (MSAW) sales tax holiday will take place between 12:01 a.m. Friday, August 25, 2017, and 12:00 midnight, Sunday, August 27, 2017. During this holiday peri...

MO - Works training program provisions amended
Missouri Works Training Program provisions, which allow qualified companies to partner with a Missouri community college district or other participating local educational agency and be eligible for a ...

NE - Guidance for construction contractors updated
The Nebraska Department of Revenue has updated sales and use tax guidance relating to construction contractors. Contractors making payments to a subcontractors that is performing construction contract...

NV - Additional credit amount authorized for scholarship organization donations
Recently enacted Nevada legislation authorizes the Department of Taxation to allow additional credit amounts to be claimed against the modified business tax and the financial institution modified busi...

NH - Statewide exemption enacted for commercial, industrial construction
For New Hampshire property tax purposes, any city or town in the state may adopt a new construction exemption for commercial or industrial uses, or both. The exemption applies only for municipal and l...

NM - Deduction disallowed as taxpayer did not operate a “for-profit” activity
A New Mexico administrative hearings officer upheld the Department of Taxation and Revenue’s (department) decision not to allow a taxpayer a personal income tax deduction for losses incurred in ...

NY - Authorization for yonkers surcharge and nonresident earnings tax extended
Under recently enacted New York legislation, authorization for the city of Yonkers to impose a personal income tax surcharge and a nonresident earnings tax has been extended for two years, through tax...

NC - Veto override enacts rate reductions in North Carolina
The North Carolina General Assembly has overridden Gov. Roy Cooper’s veto of the biennium budget bill, which will reduce corporate income tax rates from 3% to 2.5% and the personal income tax ra...

OK - Local rate changes updated
The Oklahoma Tax Commission has announced that effective July 1, 2017, the city of Stroud will impose a new 4% lodging tax.The following local Oklahoma sales and use tax changes are effective October ...

OR - Volunteer firefighters assocation checkoff added
Oregon has enacted legislation to add the Oregon Volunteer Firefighters Association to list of entities eligible for a personal income tax return checkoff contribution. Ch. 487 (S.B. 378), Laws 2017, ...

PA - Forfeiture process, procedures conformed to general provisions
Pennsylvania provisions relating to forfeitures for violations of the liquid fuels and fuels tax have been amended to conform to new general provisions relating to forfeiture process and procedures fo...

SC - Tax credits for tuition payments and exceptional SC donations discussed
The South Carolina Department of Revenue (SCDOR) has issued a news release for corporate and personal income tax purposes, which contains information about both the parental (refundable) tax credits f...

TN - Tax holiday will be held last weekend in July
The Tennessee Department of Revenue reminds taxpayers that the sales tax holiday will be held on July 28 through July 30, 2017. Items that qualify for the holiday include general apparel that costs $1...

TX - LLC’s aircraft purchase not qualified for resale exemption
A limited liability company’s purchase of an aircraft did not qualify for a sale-for-resale exemption from Texas use tax because the owner did not purchase the aircraft for the sole purpose of l...

UT - Part of refund claim was not barred by statute of limitations
Although a taxpayer’s claim for a Utah personal income tax refund for 2004 was filed more than three years from the due date of the return, including extensions, the refund request was not compl...

VA - Reminder issued on upcoming sales tax holiday
The Virginia Department of Taxation has issued a reminder to taxpayers about the sales tax holiday being held from August 4 through August 6, 2017, during which consumers can purchase qualifying schoo...

WY - Local rates, drop shipments, resort fees, other topics discussed
A Wyoming Department of Revenue newsletter announces local sales tax rate changes and discusses drop shipments, resort fees, and other sales tax topics.July 2017 Local Rate ChangesAs previously report...