Scope of Information Reporting Continues to Expand
Information reporting continues to expand as Congress seeks to close the tax gap: the estimated $350 billion difference between what taxpayers owe and what they pay. Despite the recent rollback of expanded information reporting for business payments and rental property expense payments, the trend is for more - not less - information reporting of various transactions to the IRS...

IRS Offers Fixes to New 100 Percent Bonus Depreciation
Taxpayers that place new business assets other than real property in service through 2012 may claim a "bonus" depreciation deduction. Although the bonus depreciation deduction is generally equal to 50 percent of the cost of qualified property, the rate has been increased by recent legislation to 100 percent for new business assets acquired after September 8, 2010...

Next Year's Tax Return Starts with Good Recordkeeping
As the 2011 tax filing season comes to an end, now is a good time to begin thinking about next year's returns. While it may seem early to be preparing for 2012, taking some time now to review your recordkeeping will pay off when it comes time to file next year...

FAQ: What is a Limited Liability Company?
A limited liability company (LLC) is a business entity created under state law. Every state and the District of Columbia have LLC statutes that govern the formation and operation of LLCs...

How Do I? Write Off Bad Business Debts
A business with a significant amount of receivables should evaluate whether some of them may be written off as business bad debts. A business taxpayer may deduct business bad debts if the receivable becomes partially or completely worthless during the tax year...

May 2011 Tax Compliance Calendar
As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of May 2011...

IRS Announces Safe-harbor Election for Allocating Fees in Business Restructurings
The IRS and business taxpayers have been engaged in an ongoing dispute for some time over when to deduct so-called success-based fees paid as the result of acquisition and reorganization transactions. Now, the IRS has decided that compromise is better than creating uncertainty in the marketplace and is offering a "safe harbor" position that may be taken without further resistance...

Tax Reform Debate Heats Up as Deficit Grows
The growing U.S. deficit and the increasing attention being paid to it by financial markets is creating what many see as the "perfect storm" that will drive the debate over tax reform. Whether "tax reform" will include tax increases --and whether "tax simplification" will include a flattening of existing tax rates through cutting back on deductions and credits to which many individuals and businesses...

Tax Court Highlights Strict Rules for Conservation Easement Contributions
The Tax Court recently ruled on a series of three conservation contribution cases, with mixed results for the IRS and taxpayer. A common thread running through all of them is the necessity of taxpayers to adhere closely to the strict rules that are required to win such charitable deductions. Also apparent, however, is the win-win result - for the taxpayer and for the community that benefits...

Latest IRS Statistic of Income Bulletin Reflects Economic Slowdown
The IRS's latest Statistics of Income Bulletin (Winter 2011), just released in April, reveals a significant drop in taxable income, reflecting the economic slowdown. The IRS also reported a drop in alternative minimum tax (AMT) revenue...

IRS Adds to Rules on Reporting and Withholding on Foreign Accounts
The IRS has issued additional guidance under the Foreign Account Tax Compliance Act (FATCA) provisions in the Hiring Incentives To Restore Employment (HIRE) Act of 2010, which impose reporting requirements on foreign financial institutions (FFIs) that hold accounts on behalf of U.S. persons worth more than $50,000...

Tax Alerts - April 2011

To ensure compliance with requirements imposed by the IRS, please note, any advice contained in this publication was not intended, or written, to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This publication is distributed with the understanding that the publisher and distributor are not providing legal, accounting or other professional advice and assume no liability whatsoever in conjunction with the information contained within this publication.