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2022 Tax Updates – Tax Attorney Chaya Kundra To Speak At Webinar On Oct 19

On Behalf of | Sep 14, 2022 | Blog |

Expansion of Membership Permissible: IRC 501: The IRS accepts the Voluntary Employees’ Beneficiary Association Plan (“VEBA”)’s proposal to expand its eligible membership to include all former employees. It does not matter if said former employees was a member of VEBA while in active service or retired annuitants. See, § 501(c)(9) and Reg. § 1.501(c)(9)-2(a). (PLR 202236004).

TIMING IS STILL KEY. After Exempt Org failed to respond to IRS within 30 days allotted by notice, IRS issued final adverse determination that it no longer qualified as Code Sec. 501(c)(3). (PLR 202236011)

IRC §1398: Tax Attributes & Bankruptcy Estate: Taxpayer/Chap. 11 debtor’s negligence and malpractice claims against its business consultant/accountant’s failure to make a IRC 1398 short year election or to advise about this was rejected; taxpayer incurred personal tax liability that he could have avoided; however court found that even if the failure to elect/advise was substantial factor in causing the owed taxes, no evidence was provided speaking to what would have happened had election been made; nor were damages quantified. Nevertheless, certain other claims against consultant were upheld. (In Re: Jackson, III, Bktcy Ct CT, 130 AFTR 2d ¶2022-5184)

IRC §2010: Unified Credit, Estate Tax, Portability: 120-day extension granted to make Code Sec. 2010(c)(5)(A) portability election, to allow surviving spouse unused DSUE amount, where it was shown that the estate acted reasonably and in good faith and granting relief wouldn’t prejudice govt.’s interests. (PLR 202236009)

IRC §§ 6501, 6662: Limitations on Assessments & Accuracy Penalties: IRS not barred from assessing accuracy-related penalty based on substantial gross income omissions under IRC § 6501(e) over years taxpayers failed to report husband’s Swiss bank commissions and other income. While assessments were made outside IRC § 6501(e)’s 6-year period, they were allowable due to suspension under IRC §7609(e) given IRS’ intervening John Doe summons to Swiss bank. Said penalties were upheld on summary judgment. Taxpayers also claimed IRS failed to comply with IRC § 6751(b)’s written supervisory approval prerequisite, IRS showed this approval via Forms 5345-D prior to first formal communication of penalties to taxpayers. Taxpayers had filed amended returns that were disregarded as qualified amended returns precluding penalties under Reg. § 1.6664-2(c)(3) because the amended returns were filed after IRS served Code Sec. 7609(f) John Doe summons on Swiss bank and taxpayers were in class of persons identified in summons. (Johannes Lamprecht, et ux. v. Commissioner, (2022) TC Memo 2022-91, 2022 RIA TC Memo ¶2022-91)

We look forward to seeing you at our next meeting which you are able to join virtually or in person on Wednesday, October 19th at noon at our office at 108 South Washington Street, Rockville, MD 20850 or on-line at https://us02web.zoom.us/j/83155533237?pwd=WTRlMmxXcTVydVJQMUVaQThyYmxMZz09. Meeting ID: 831 5553 3237 and Passcode: 829403.