William P Cook

Tax Alerts

Tax Briefing(s)

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

Identity thieves now targeting businesses, IRS warns
The IRS recently reported good news about tax-related identity theft. Since 2015, the IRS has seen a decrease in identity theft of individuals. However, identity thieves are stepping up their scams ag...

401(k) loan taxable when payments missed
A loan from a 401(k) plan can be a valuable source of funds, especially when most other avenues for quick cash are unavailable. Aside for the admonition that retirement savings need to be kept for ret...

IRS examiners given instructions on handling partnership audit elections
The IRS has provided interim guidance to its examiners on handling early "opt-in" elections for the new centralized partnership audit regime, for tax periods beginning after November 2, 2015, and befo...

No “direct entry” allowed into less onerous offshore disclosure program
The D.C. Circuit Court of Appeals has affirmed that the Anti-Injunction Act (AIA) bars a taxpayer from switching from the earlier Offshore Voluntary Disclosure Program (OVDP) to the more favorable Str...

Pre-game meals fully deductible as de minimis fringe
Rebuffing the IRS, the Tax Court has found that a professional sports team (reportedly, the Boston Bruins) could deduct the full cost of pre-game meals for away games. The Tax Court held that the meal...

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 - Credit provisions amended, repealed; interest provisions changed in Alaska
For purposes of Alaska oil and gas production tax, the tax credit fund cannot purchase new credit certificates, one credit is repealed, and one credit is extended to corporate income tax liability. In...

AR - Local tax rate changes for 4th quarter announced
The following Arkansas local sales and use tax rate changes will take effect October 1, 2017.City RatesBlytheville (Mississippi County) will increase its local rate from 1% to 1.5%.Eureka Springs (Car...

CA - Process for veterans’ organizations to obtain state tax-exempt status simplified
California corporation franchise and income tax provisions allowing certain federally tax-exempt organizations to use a simplified process to obtain state tax-exempt status have been amended to allow ...

CO - Notice and reporting requirements for non-collecting retailers clarified
The Colorado Department of Revenue has issued an emergency regulation in order to clarify how a retailer that does not collect Colorado sales tax must comply with notice and reporting requirements tha...

DE - W-2 and 1099 FAQs updated for 2017 tax year
The Delaware Division of Revenue has updated its answers to frequently asked questions (FAQs) regarding W-2 and 1099 personal income tax withholding information for the 2018 reporting period. The FAQs...

FL - Exemption for animal and aquaculture health products discussed
The Florida Department of Revenue provides guidance regarding the newly enacted sales and use tax exemptions for animal and aquaculture health products. Effective July 1, 2017, animal health products ...

GA - Taxpayer claiming credits beyond deadline subject to late-filing penalty
The Georgia Department of Revenue has issued a letter ruling determining that a personal income taxpayer could not delay payment of taxes beyond the statutory payment deadline in anticipation that a f...

HI - Public service company tax and bank franchise tax requirements outlined
The Hawaii Department of Taxation has issued an announcement that describes the obligations of public service companies subject to the public service company (PSC) tax under Chapter 239, HRS, and bank...

IL - Nexus of medical transcription service provider discussed
The Illinois Department of Revenue (department) issued a general information letter discussing whether a taxpayer's medical transcription services created nexus with Illinois, subjecting the services ...

IN - Social security number not required for dependent exemption
An Indiana personal income taxpayer was entitled to claim the dependent exemption for his three children even though he failed to provide the dependents' Social Security numbers (SSNs) on his Indiana ...

IA - Reminder issued about upcoming tax holiday
The Iowa Department of Revenue has issued a reminder about the upcoming annual sales tax holiday. The 2017 sales tax holiday will be held from 12:01 a.m. on Friday, August 4, 2017, until midnight on S...

LA - Tax holiday shoppers may claim education expense deduction
Shoppers during the Louisiana Annual Sales Tax Holiday held on August 4-5, 2017 (Friday-Saturday), are encouraged to retain receipts on their purchases of back-to-school items, such as supplies, unifo...

ME - Maine enacts headquarters credit
Maine Gov. Paul LePage has signed legislation that creates a refundable corporate and personal income tax credit for the construction or expansion of major business headquarters in the state as long a...

MD - Tax holiday reminder issued
The Maryland Comptroller has reminded taxpayers that the annual sales tax holiday will take place from August 13, 2017 through August 19, 2017. Qualifying apparel and footwear $100 or less per item, a...

MS - Local tax changes in brandon, byram, pascagoula, and southaven announced
The Mississippi Department of Revenue has announced the following local lodging and restaurant tax developments.Brandon. A special tax of 3% will be levied on the gross proceeds of room rentals o...

MO - Taxability of fees for arcade games, pinball machines, and jukebox discussed
Fees charged by a brewery and arcade for the use of its arcade games, pinball machines, or jukebox are not subject to Missouri sales tax. The taxpayer's arcade games, pinball machines, and jukebox are...

NE - SST certificate of compliance updated
The Nebraska Department of Revenue has revised its Streamlined Sales and Use Tax (SST) Agreement Certificate of Compliance in order to respond to the product definition for "feminine hygiene prod...

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 - IRC conformity updated and BPT/BET rates reduced
The New Hampshire Department of Revenue Administration has issued a technical information release summarizing recent legislative changes enacted in HB 517, Laws 2017. That legislation made changes to ...

NM - Business owner personally liable for tax
A trucking business owner (taxpayer) was personally liable for New Mexico gross receipts tax because he operated the business as a sole proprietorship. Generally, a sole proprietor is personally liabl...

NY - New York addresses taxability of cloud collaboration service, including hardware and software
A taxpayer’s sale of a cloud collaboration service product is subject to New York state and local sales taxes because it constitutes prewritten software. The taxpayer’s purchase of hardwar...

NC - Department discusses exemption for large fulfillment facilities
The North Carolina Department of Revenue reminds taxpayers of a sales and use tax exemption for large fulfillment facilities. Effective July 1, 2017, and applicable to sales or purchases made on or af...

OK - Local tax change announced
The city of Geary, Oklahoma, will increase its local sales and use tax rate from 3% to 3.5%, effective October 1, 2017. Other local tax changes effective October 1, 2017, were previously reported.&nbs...

OR - Alternative energy system exemption extended
For Oregon property tax purposes, the exemption for property consisting of solar, geothermal, wind, water, or methane gas systems is not allowed for tax years beginning after July 1, 2023. Formerly, t...

PA - DOR discusses review programs
A Pennsylvania Department of Revenue newsletter discusses reviews of corporate income tax Schedule C; sales, use, and hotel occupancy tax; and electronic sales suppression.Schedule C ReviewCorporate i...

SC - 2017 Per capita figures released
The South Carolina Department of Revenue has released the most recently available per capita income figures for all South Carolina counties, as well as the state figure, for the purpose of calculating...

TN - Construction of fiber-to-the-home network infrastructure is taxable
The lump-sum price that a taxpayer charges for the engineering, procurement, and construction of a fiber-to-the-home network is subject to Tennessee sales and use tax. The issue of whether an item of ...

TX - policy revised for treatment of net losses from sale of investments and capital assets for apportionment purposes
The Texas Comptroller of Public Accounts has revised its policy regarding the franchise tax treatment of net losses from the sale of investments and capital assets in calculating gross receipts for ap...

UT - Local rate schedules updated
The Utah State Tax Commission has updated its local sales and use tax rate schedules to reflect rate changes that are effective, October 1, 2017:Emery County will impose a 0.25% county option highway ...

VA - 2016 Returns filed on extension addressed
The Virginia Department of Taxation has issued a tax bulletin explaining the impact of recent federal legislation and administrative action by the IRS on the Virginia corporate income tax filing exten...

WY - Valuation reduction denied due to insufficient evidence
For property tax purposes, a county board of equalization’s (county board) decision affirming an assessor’s 2015 valuation of a property was affirmed by the Wyoming State Board of Equaliza...