Tax Measures Large and Small Await Congressional Action
Congress has returned to work after its August recess under a tight deadline to reduce the federal budget deficit and also, possibly, extend some expiring tax incentives. Between now and the end of the year, Congress could enact significant tax reform in a deficit reduction package; or it may take a piecemeal approach. All this Congressional activity contributes to uncertainty in tax planning...

Identifying Investment-related Issues from Fluctuating Markets
With the stock market fluctuating up and down (but especially down), some investors may decide to cash out investments that they initially planned to hold.  They may have taxable gains or losses they did not expect to realize. Other investors may look to diversifying their portfolios further, moving a more significant portion into Treasury bills, CDs and other "cash-like" instruments...

Back-to-School Look at Education Tax Benefits
The start of the school year is a good time to consider the variety of tax benefits available for education. Congress has been generous in providing education benefits in the form of credits, deductions and exclusions from income. The following list describes the most often used of these benefits...

How do I - Claim the Adoption Tax Credit?
Adoptive parents may be eligible for federal tax incentives. The Tax Code includes an adoption tax credit to help defray the costs of an adoption.  Recent changes to the adoption tax credit make it very valuable...

FAQ - What is a Tax Return Transcript?
Taxpayers can request a copy of their federal income tax return and all attachments from the IRS. In lieu of a copy of your return (and to save the fee that the IRS charges for a copy of your tax return), you can request a tax transcript from the IRS at no charge. A tax transcript is a computer print-out of your return information...

September 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 September 2011...

IRS Unveils Form and Rules for 2010 Carryover Basis Election
The IRS has issued guidance on how estates of decedents dying in 2010 may elect to carryover basis treatment in lieu of the federal estate. The election, enacted by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act, generally must be made on Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent on or before November 15, 2011...

IRS Issues Guidance on Two New Health Care Reform Measures
The IRS recently issued guidance on two new health care reform measures. The Patient Protection and Affordable Care Act (PPACA) provides a health insurance premium assistance credit to qualifying individuals and mandates that health insurance information be given to individuals...

Third-party Agreements No Shield From Trust Fund Recovery Penalty
A recent decision by the Court of Appeals for the Fourth Circuit reinforces the dangers of failing to pay federal payroll taxes. A company president argued that he was not liable for the trust fund recovery penalty because the business' creditors were effectively in charge. The court rejected his argument and held him liable for the trust fund recovery penalty (TFRP)...

Court Overturns Decision Finding Spouse Not an Employee of Small Business
Small businesses often rely on family members to help with the work. When a family member is also an employee, complicated tax and benefits issues can arise. The Court of Appeals for the Tenth Circuit recently reversed the Tax Court's decision that the wife of a small business owner was not an employee of the business...

IRS Nixes Refunds of Airline Excise Taxes
For a brief time this summer, some airline ticket taxes expired and it seemed that passengers might be entitled to refunds. Instead, Congress reinstated the taxes retroactively, which, according to the IRS, denies any refunds. The IRS has posted guidance for passengers on its website...

PA - Averaging Methodology for Determining Merged Bank Share Value Could Have Unconstitutional Result
For purposes of the Pennsylvania bank and trust company shares tax, use of the statutory six-year averaging methodology to determine the taxable share amount for certain bank mergers (combination provisions) could violate the state's constitution. However, severance of the combination provisions from the tax law was not required...

Tax Alerts - August 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.