The IRS has denied tax-exempt status to a religious organization espousing a belief in “celestial marriage,” which includes “a plurality of wives.” The organization argued that celestial marriage is a private religious relationship and does not constitute bigamy, but the IRS pointed to contrary rulings and said, “Because you advocate and engage in activities that contravene state laws and state and federal public policy, you cannot be a valid religious trust.”
Changes are coming to two resources that are often used by tax researchers. The IRS says they will continue to produce the Internal Revenue Bulletin, a weekly collection of rulings, procedures and other guidance, but will stop mailing paper copies. No great loss there: the PDF is readily available online. The Cumulative Bulletin, a semiannual compendium of this guidance (together with some other items) won’t be produced at all. If your collection runs through 2008 (the last ones produced) it is now complete.
Elimination of the largely redundant Cumulative Bulletin will be a time-saver for legal publishers who have had to run a last minute check before publication to determine whether a citation to IRB has to be updated to CB.
The IRS has announced that forms previously on hold for reprogramming due to late changes in the tax law will now be accepted.
A few years ago, to stimulate the housing market Congress created a special credit for certain people buying homes. It was called the first-time homebuyer credit, although it wasn’t strictly limited to people who had never owned a home. The first version of the credit was really an interest-free loan made through the tax system: qualified taxpayers received the credit in the year they bought the home but had to repay it through “recapture” of the credit over a number of years. If you claimed this version of the credit and are unsure where you stand in terms of repaying it, the IRS has a new tool on its website where you can look up this information. (Taxpayers who used the revised version of this credit do not have to repay it.)
link: First Time Homebuyer Credit Account Look-up
March 2, 2013
By Kaye A. Thomas
If you’ve made multiple purchases and sales of stock in the same company (or shares of the same mutual fund) within the same year, you may have been surprised at what was reported on Form 1099-B. This report of the tax consequences of your sales may seem to bear little relationship to the actual activity in your account. If your trading activity includes wash sales, it may be all but impossible for you to determine whether the results reported on this form are correct. From what I’ve seen, there’s a good chance they aren’t.
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Forbes quotes us in this article about estimated tax concerns of high-income taxpayers following the tax increases that took effect as of 2013.
more info: Free online guide to estimated tax payments
Not one to mince words, Judge Posner of the Court of Appeals instead diced the plaintiffs in a case brought by clients of UBS against the bank for failing to protect them from the consequences of their failure to report income earned by foreign bank accounts. “The plaintiffs are tax cheats,” the opinion states, and goes on to compare this case with one that is famous in legal lore as the Highwayman’s Case, in which a criminal sued his partner over division of the profits. (In that case, the court refused to hear the dispute, and both parties were hanged.) Judge Posner seemed unimpressed with the plaintiffs’ attorneys as well, observing, “The plaintiffs advance a variety of common law claims without indicating the state or nation whose law gives rise to them.”
We’ve posted this case, Thomas v. UBS AG (PDF), for its entertainment value. Our author wants to be clear that the named plaintiff is “some other Thomas.”
February 6, 2013
By Kaye A. Thomas
Brokers and mutual fund companies are now required to report your cost basis and holding period in addition to sales proceeds when you sell shares. The requirement doesn’t apply to all shares, however. What’s more, even when they follow all the rules, brokers may report incorrect figures. Taxpayers can’t rely blindly on these reports.
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Following the Loving decision (reported here), in which the judge granted an injunction against IRS enforcement of its registered tax return preparer regulations, the IRS temporarily shut down its online system for obtaining a preparer tax identification number (“PTIN”), which is needed by all paid preparers (including lawyers, CPAs and enrolled agents). Following clarification of that decision, the online PTIN system is up and running again.
Contrary to at least one published report, the Loving case does not affect the ability of the IRS to require a PTIN or to charge a user fee for those who obtain one.