Federal & State Tax News

IRS releases guidance on payroll tax credit for small business research expenses

Monday, May 1, 2017

Interim guidance describes for small businesses the new payroll tax credit election for increasing research expenses. The IRS also provided a special rule for 2016 for small businesses that did not claim the credit but want to claim the credit before year-end 2017. The interim guidance reflects changes made to the research credit by the […]

Tax refund offsets may be used toward unpaid debts

Monday, April 3, 2017

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 unpaid federal or state debts, to include unpaid individual shared responsibility payments. For example, the IRS is prohibited from […]

Future pension payouts not counted as asset in determining insolvency exclusion

Wednesday, March 1, 2017

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 exclusion from cancellation of indebtedness income. The court rejected the IRS’s argument that the ability of the taxpayers to use their monthly pension […]

Dentist persuades Tax Court of material participation in real estate business

Wednesday, March 1, 2017

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, the losses were not barred by the passive activity rules. The taxpayer was a dentist married to another dentist with whom he shared a […]

Tax returns lacking ACA coverage status will not be rejected

Wednesday, March 1, 2017

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 returns that fail to indicate coverage, an exemption or a shared responsibility payment. The IRS had planned to reject these returns (known as “silent […]