Federal & State Tax News


Vehicle depreciation limits likely to drop for 2018

Friday, December 1, 2017

Some “luxury vehicle” depreciation caps for cars and trucks first placed in service in 2018 are likely to drop. The projection is based on consumer price data released by the Bureau of Labor Statistics in October. The IRS will announce official amounts, likely before year-end or early next year. 2018 vehicle depreciation caps The projected […]

Appeals court upholds $1 million FBAR fine

Friday, December 1, 2017

A $1 million penalty for failing to disclose a foreign financial account has been upheld by a federal appeals court. The Ninth Circuit rejected the taxpayer’s argument that the penalty was unconstitutional. FBAR A U.S. person with financial interests in or signature authority over foreign financial accounts generally must file FinCEN Form 114, Report of […]

New law protects family farms from IRS priority in bankruptcy

Friday, December 1, 2017

A new law allows family farms to sell off part of their farmland to fund their Chapter 12 bankruptcy reorganization without having to treat the resulting capital gain as a priority claim of the IRS. President Trump signed the bipartisan Family Farmer Bankruptcy Clarification Act of 2017 (Sen 1237) on October 26. Background In 2012, […]

Tax Court allows estimated COGS/expenses to offset unreported eBay sales

Friday, December 1, 2017

A taxpayer had unreported business income from online sales of coins. Nevertheless, the Tax Court allowed the Cohan rule to estimate the taxpayer’s cost of goods sold (COGS) and deductible postage and packing expenses. Background The taxpayer bought and sold coins and related items in online eBay auctions. These payments were reflected on Form 1099-K, […]

Business owner liable for unpaid employment taxes despite lock-box

Friday, December 1, 2017

Despite a “lock-box” arrangement, a business owner was liable for unpaid employment taxes. A federal appeals court found that the individual had sufficient control over the business and also knew that the taxes were unpaid. The court upheld the trust fund recovery penalty imposed by the IRS. Background The owner had borrowed money to finance […]