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2021 Tax Season Updates

On Behalf of | Jan 13, 2022 | blog |

2021 Tax Season Begins 1/24: IRS says it has updated its programming to accommodate recipients of advance child tax credit (CTC) payments and those eligible for “recovery rebate credit.” (IR 2022-8, 1/10/22)

US Supreme Court & Timing of USTC Petition: Petitioner says one-day-late filing over disputed IRS penalty is not a time-bar under Code Sec. 6330 according to attorneys for Boechler.

IRC 6248, Bankruptcy & Needs Based Programs: Bankruptcy court denies Chap. 7 trustee’s claim for turnover of taxpayer’s petition-filing year refund is affirmed as ACTC and EIC are federally-administered needs-based programs; trustee’s arguments that such credits weren’t “federal aid assistance” were unavailing. (In Re: Moreno, U.S. BAP 9, 129 AFTR 2d ¶2022-304)

IRC 6011 & Repatriation: Taxpayer was granted stay on repatriating monies from foreign accounts to satisfy FBAR judgment as prejudice to govt. was minimal and taxpayer’s liquidation could result in additional tax liability. (U.S. v. Schwarzbaum, DC FL, 129 AFTR 2d ¶2022-303)

U.S. Senators introduce Supporting Early-Childhood Educators’ Deductions (SEED) Act for early childhood educators to claim the existing above-the-line $250 tax deduction for K-12 teachers applying to the cost of supplies, books and other materials for their classrooms.

IRS work force grows by 0.4% in fiscal 2021 while temporary personnel shrank by nearly 23%, IRS said in its annual report released January 7.

IRC 263—Capital expenditures—amounts paid to facilitate acquisition; success-based fees; safe harbor—extensions: Taxpayer granted 60-day extension to file safe harbor election for success-based fees under Rev Proc 2011-29, 2011-18 IRB 746, Sec. 4.01(3). (PLR 202201012)

IRC 2010: Unified credit against estate tax: Estate was granted 120-day extension to make Code Sec. 2010(c)(5)(A) portability election to allow decedent’s surviving spouse to take unused DSUE amount into account. (PLR 202201007, PLR 202201009)

IRC 6663 & Fraud Penalties: USTC properly upheld fraud penalties against Petitioners in respect to underpayments relating to significant unreported income; argument that IRS didn’t comply with Code Sec. 6751(b)’s written supervisory approval prerequisite foreclosed by prior stipulations. (Wegbreit v. Comm., CA 7, 128 AFTR 2d ¶2021-5497)