The Bloomberg BNA Federal Tax Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues about federal tax topics. The ideas presented here are those of individuals and Bloomberg BNA bears no responsibility for the appropriateness or accuracy of the communications between group members.
September 19, 2013
by Stephanie Fiumara
For a second year, Bloomberg BNA has released projected inflation-adjusted amounts for thresholds, limits and deductions in the tax code using data from the consumer price index released...
by Shaun Terrill
In DOL Technical Release 2013-04, the DOL clarified that, for purposes of ERISA and certain Internal Revenue Code provisions that the DOL interprets, the term "spouse" will include any individuals...
September 17, 2013
by Vanessa Walts
The DOL is considering a proposal to require pension benefit statements for defined contribution retirement plans to show the current balance of a participant's retirement account, as well as a...
September 13, 2013
An employer must furnish current employees with written notice of their health coverage options by October 1, 2013, if the employer is covered by the Fair Labor Standards Act (FLSA). The Affordable Care Act added this requirement which tells employees about health insurance Exchanges, also called Health Insurance Marketplaces, and employer-sponsored health plan options. An employer must furnish current employees with written notice of their health coverage options by October 1, 2013, if the employer is covered by the Fair Labor Standards Act (FLSA). The Affordable Care Act added this requirement which tells employees about health insurance Exchanges, also called Health Insurance Marketplaces, and employer-sponsored health plan options
September 9, 2013
Breaking up is hard to do, but a little planning can go a long way. For example, in Kumar v. Commissioner , T.C. Memo 2013-184, the Tax Court ruled that a minority shareholder of an S corporation...
September 5, 2013
About 40% of senior financial executives, responding to a survey by Prudential Financial Inc, indicated that they will “seriously consider” transferring their company’s defined benefit plan risk...
August 30, 2013
On September 18, 2013, Bloomberg Law will host a discussion, featuring former U.S. Congressman Phil English and former U.S. Senator Byron Dorgan, just as Congress begins to prepare for the release...
August 29, 2013
On August 29, 2013, in IR-2013-72, the Treasury and the IRS announced that same-sex couples that were legally married in a state or jurisdiction that recognizes same-sex marriages will be treated...
August 26, 2013
Bloomberg BNA launches its new Premier State Tax Library in response to the increased importance of state and local tax planning. This library includes the following new products and tools: ...
August 19, 2013
by Sharon Fountain
An employee dies leaving behind an employer-sponsored qualified retirement account. The same-sex spouse and the parents of the employee both make claims for the benefits. The state in which the...
August 16, 2013
On August 5, in John Hancock Life Ins. Co. v. Commissioner , 141 T.C. No. 1 (8/5/13), the Tax Court ruled for the first time on the income tax consequences of lease-in-lease-out (LILO)...
by J. Patrick Becker
Recently issued proposed rules addressing requests for equitable spousal relief under §6015 (see REG-132251-11 , 78 Fed. Reg. 49242 (8/13/13)), would make permanent a 2011 taxpayer-friendly IRS...
August 9, 2013
In Cozen O’Connor v. Tobits, No. 2:11-cv-00045-CDJ (E.D. Pa. 7/29/13), a Pennsylvania federal court ruled that United States v. Windsor, No. 12-307 (U.S. 6/26/13), required the recognition of a...
August 2, 2013
by Kenneth S. Savell
A recent case, Boeri v. United States , No. 2012-5102 (Fed. Cir. 7/31/13), provides a cautionary tale for nonresidents who have never lived nor worked in the U.S. but nevertheless may have...
July 26, 2013
by Tammara C. Madison
What happens when the court makes a mistake in issuing its decision? What recourse is available to the parties concerned? Does the court vacate its decision and reissue a correct decision, or...
Changes of residence, changes of headquarters, changes in corporate structure, corporate/partnership dissolution, bankruptcy, liquidation, and other occurrences that affect simple things like...
July 22, 2013
Employers need to be aware of their health care-related obligations. Is your monitoring system for implementation of the Affordable Care Act’s rules up to date? Does it accurately and timely display deadlines under the Act and extensions and transition relief that the Department of Treasury and IRS, the Department of Labor, and the Centers for Medicare & Medicaid Services have granted? Does it reflect the 2014 transition relief provided for the employer mandate also known as “pay or play”?
July 19, 2013
The deadline is July 31, 2013, for sponsors of self-insured group health plans to pay Patient-Centered Outcomes Research (PCOR) Trust Fund fees to the IRS. The fee applies to accident and health coverage, retiree coverage, and COBRA coverage. It does not apply to excepted benefits or to programs that do not provide significant benefits in the nature of medical care or treatment.
July 10, 2013
In addition to cash salary or wages, employers can provide employees with a wide array of benefits. These benefits can take many forms, including: (1) advances or reimbursements for employee...
July 5, 2013
After hearing complaints from employers about burdensome reporting requirements under the Affordable Care Act, the IRS and the White House announced that these requirements will be suspended for...
June 28, 2013
According to a survey conducted by benefits consulting firm Mercer and CFO Magazine, sponsors of defined benefit pension plans are increasingly interested in purchasing annuities to transfer plan...
June 26, 2013
On June 26, 2013, in a 5-4 decision, the Supreme Court ruled that the Defense of Marriage Act violates due process and equal protection principles applicable to the federal government. The Court...
June 21, 2013
On June 17, 2013, Bloomberg BNA launched several enhancements on the Tax and Accounting Center, including new products and as well as improvements on existing products. We are very excited about...
June 18, 2013
In an effort to offset the cost of maintaining low student loan interest rates, Congress recently considered limiting beneficiaries' ability to defer paying taxes on inherited retirement accounts. ...
June 13, 2013
Oh to be young. On June 12, Bloomberg TV's Street Smart reported that a newly wed couple has proposed transacting in bitcoin exclusively, i.e., no U.S. dollars, for the first 90 days of their...
May 23, 2013
Casinos make money in the long run. A casino may not be making money at any given moment, such as when a visitor wins a large jackpot, and a casino may not even want "money" in every situation....
May 20, 2013
A taxpayer who has a self-directed IRA and who guarantees a loan entered into by a company the shares of which are owned by the IRA runs afoul of the tax Code’s prohibited transaction rules, causing the account to fail to qualify as an IRA, according to the Tax Court in Peek v. Comr., 140 T.C. No. 12 (2013).
April 29, 2013
In CCA 201315026, the IRS considered taxpayer’s request for assistance in determining whether there is a continuation of a partnership where the Original Partnership merges with an existing...
April 18, 2013
If you have a self-insured group health plan, you should care about the Affordable Care Act’s Transitional Reinsurance Program because you will help to fund it. Your plan will submit “contributions” for plan years beginning in the 3-year period starting January 1, 2014, to the Department of Health and Human Services.
Although the European Union could not gain the support needed to implement the Tobin tax on financial transactions, 11 EU countries are expected to implement the tax on their own this year. See...
April 12, 2013
A supplemental benefit paid to a pension plan participant was an accrued benefit and subject to the terms of a qualified domestic relations order (QDRO), according to the U.S. Court of Appeals for the Third Circuit. Gruber v. PPL Retirement Plan, No. 12-2123 (3d Cir. 4/9/13).
April 4, 2013
Bloomberg BNA is presenting a webinar on May 23, from 1:00-2:30 p.m., ET, focusing on the new regulations on retirement income issued on January 9, 2013, by the Puerto Rico Department of the Treasury under the Puerto Rico Internal Revenue Code of 2011. Carlos Gonzalez, author of the Bloomberg BNA Tax & Accounting Portfolio No. 324, International Pension Planning — Puerto Rico, and Eugene Holmes, Senior Counsel, Proskauer Rose LLP, Washington, D.C., will take your questions on the Puerto Rico income taxation of benefits and payments from retirement plans covering Puerto Rico recipients and related administrative issues.
March 19, 2013
Practitioners are suggesting that Verizon Communications’ decision to pay Prudential Insurance Company of America an $8 billion premium to take over monthly pension payments to 41,000 retirees was a “game changer” in the increasing de-risking strategies for defined benefit plans being pursued by employers, and may have altered the landscape of pension de-risking that relies on annuity forms of distribution.
March 11, 2013
In late March, the Supreme Court will hear arguments in a pair of same-sex marriage cases that could have widespread federal tax impacts. One case tests the constitutionality of the Defense of...
February 28, 2013
Bloomberg BNA is presenting a workshop on March 6 focusing on compliance by small employers with the Patient Protection and Affordable Care Act. Alden Bianchi of Mintz Levin Cohn Ferris Glovsky and...
February 20, 2013
In Section 407(a)(3)(E) of the American Taxpayer Relief Act of 2012 (2012 ATRA), Congress enacted a new rule applicable to hydropower facilities that produce incremental hydropower production (i.e.,...
February 14, 2013
Bloomberg BNA is presenting a workshop on February 21 focusing on compliance by large employers with the Patient Protection and Affordable Care Act. Alden Bianchi of Mintz Levin Cohn Ferrris...
February 5, 2013
The Pension Protection Act of 2006 (PPA) added special funding rules for significantly underfunded multiemployer pension plans. According to a study conducted by the DOL, IRS and PBGC, about 68% of...
January 30, 2013
The House Ways and Means Committee believes that a leading cause of the 2008 financial crisis was the complicated set of rules on taxation of financial instruments and products. On January 24,...
January 7, 2013
In a surprising turn of events, Rev. Proc. 2013-6, the IRS’s most-recently updated procedure for issuing determination letters on the qualified status of various retirement plans, was revised to...
December 20, 2012
Taxpayers facing liability under the new §1411 net investment income tax (NIIT) that takes effect for tax years after 2012 have been asking whether a prior year capital loss carryover may be...
November 30, 2012
Employer pension plans are rapidly disappearing, making retirement savings critical. The risk is that people will outlive their savings. Those nearing retirement, as well as the federal government...
Bloomberg BNA's inaugural Tax Policy & Practice Summit, held in Washington, DC, the week after the November election, featured lively panel discussions, presentations, and Q&A on the fiscal...
A trend appears to be developing in which defined benefit plan sponsors are using pension plan assets to purchase group annuity contracts from insurers who then assume the obligation to make future annuity payments to the company’s retirees. Employers view these transfers as “de-risking” their pension plans while improving the company's longer-term financial profile. Recently, retiree participants of the Verizon Communications, Inc. defined benefit plan filed a putative class action in a federal district court claiming that the company's plan to transfer $7.5 billion in pension assets to Prudential Insurance Co. to purchase annuities violates Verizon’s fiduciary duties under ERISA and interferes with the retirees' protected rights.
November 26, 2012
Employers in some states could pay more in unemployment taxes in 2012 due to the states' failure to repay federal loans. Employers in affected states would have to pay additional taxes by January...
Having distributed the first set of fee disclosure documents this summer and initial quarterly statements of plan fees and expenses this fall, it's time for 401(k) plan administrators to turn their...
November 16, 2012
While the nation’s attention has been focused on the so-called “fiscal cliff” and its impact on taxpayers – and with good reason – less visible has been the practical impact on tax practitioners who...
November 13, 2012
An issue that comes up frequently with employers is whether severance payments to employees are subject to FICA taxation (OASDI and HI taxation). Recent Circuit cases have muddied the waters by...
November 2, 2012
GM and Ford, sponsors of two of the largest pension plans in the country, are offering lump sum settlements to retirees who are already collecting monthly pension benefits. The IRS approved each...
October 5, 2012
Two bills passed by the California legislature and signed by the governor set the stage for the first state-sponsored retirement program for employees of private employers. If the program moves...
October 4, 2012
As of August 31, 2012, the IRS no longer provides letter-forwarding services on behalf of plan sponsors or administrators of qualified retirement plans to locate missing participants who may be...
October 3, 2012
Bloomberg BNA Tax Policy Summit: Post-Election Answers to "What Now" "Taxmaggeden," new reporting requirements under "Obamacare," and competing tax reform initiatives are just some of the...
September 27, 2012
While working on the Bloomberg BNA 2013 Projected Tax Rates , we were analyzing the Earned Income Credit and noticed something interesting. Section 32(b)(3)(B)(i), added by the American Recovery...
September 24, 2012
The Treasury Department has proposed changes to the Circular 230 rules that will significantly simplify and streamline the existing rules for written tax advice by removing current Circ. 230 §10.35...
September 20, 2012
The last day of 2012 ends the two-year transition period for employers to revise employment agreements that require executives separated from service to sign a release of claims document before receiving post-termination pay and avoid further compliance problems under §409A.
September 4, 2012
In Neff v. Comr., T.C. Memo 2012-244, a case involving split-dollar life insurance arrangements entered into before the effective date of the 2003 final split-dollar regulations, the Tax Court held that two employees covered under life insurance policies realized income from a December 2003 rollout of the arrangements.
August 24, 2012
Tax policy issues related to partnerships and pass-through entities are both political and economic as the predominant form of investment and business entity is now the limited liability...
August 16, 2012
Although many employers have been struggling to keep their defined benefit pension plans adequately funded, other companies find that they now have a surplus of assets held in trust for retirement...
August 10, 2012
The latest in pension funding relief, the Moving Ahead for Progress in the 21st Century Act (MAP-21), addresses the problems facing pension plans in several ways. The legislation tinkered with the...
July 31, 2012
We are pleased to announce that the RATE Coalition will be presenting a panel discussion at the inaugural Bloomberg BNA Tax Policy & Practice Summit on November 13-14, 2012, in Washington, DC....
July 23, 2012
Bloomberg BNA will host its inaugural Tax Policy & Practice Summit on November 13-14, 2012, in Washington, DC. One week after the November election, the Summit will focus on the impact of the...
July 17, 2012
Do the quirky facts in Bidwell v. University Medical Center, Inc. justify the Sixth Circuit's decision that a plan administrator was not liable for $101,900 in losses to two §403(b) plan participants after it transferred the participants' investments from a stable value fund to a qualified default investment alternative (QDIA) without first receiving investment directions from the participants?
July 2, 2012
With regard to the well-settled “abuse of discretion” standard the Tax Court utilizes in CDP cases, a secondary question arises, namely, the standard the court should use with respect to the...
June 1, 2012
The IRS has issued proposed regulations that would make it more difficult to defer taxation on restricted property that is subject to conditions unrelated to the performance of future services.
May 29, 2012
The IRS recently announced more changes to its offer-in-compromise (OIC) program as part of its “fresh start” initiative designed to help financially distressed taxpayers in IR-2012-53 (5/21/12).
May 23, 2012
Many questions remain unanswered for low-income employees who wonder whether they may enroll in a qualified health plan and claim the health insurance premium tax credit beginning in 2014 or...
May 21, 2012
In PLR 201220004, an accrual method subchapter S corporation filed for Chapter 11 protection and planned to issue a combination of cash, new debt, and stock to its creditors pursuant to its (as...
May 15, 2012
The Internal Revenue Service can assesses numerous penalties against employers in connection with payroll taxes — including for late filing, making late payments, and failing to pay electronically — so it is important for practitioners to understand the ways available to them for winning reduction or abatement of penalties for their clients.
May 11, 2012
In a case of first impression, the Tax Court held that dismissal of a taxpayer’s petition seeking review of IRS collection actions under §6330(d) does not violate the bankruptcy automatic stay under 11 U.S.C. §362(a)(8).
April 27, 2012
The U.S. Supreme Court’s 5-4 decision in U.S. v. Home Concrete & Supply LLC, v. Comr., No. 11-139 (S. Ct. 4/25/12) seems clear enough – an overstatement of an asset’s basis resulting in an understatement of gain on its sale is not an “omission from gross income” of 25% or more for purposes of §6501(e)(1)(A) such that the normal three-year statute of limitations on assessment is extended to six years.
April 16, 2012
The IRS has posted to its website updates to the National Collection Financial Standards used to evaluate a taxpayer’s ability to pay and other financial circumstances primarily in connection with installment agreements and offers in compromise. The revised standards are effective April 2, 2012.
The IRS’s recently updated version of Form 2848, Power of Attorney and Declaration of Representative (Rev. March 2012), presents several traps for taxpayers and practitioners alike.
March 23, 2012
Have difficult economic times caused small retirement plans to cut back on compliance with the tax laws? According to the March 20 issue of the IRS electronic newsletter, Employee Plans News, 1 in 4 smaller retirement plans reviewed starting in 2007 under the IRS’s LESE (“Learn, Educate, Self-Correct, and Enforce”) project had engaged in at least one prohibited transaction.
March 15, 2012
Much of the debate in presidential primaries has centered on the perceived need for tax reform. Such reform would require substantial changes to the current version of the Internal Revenue Code, which, when enacted in 1986, was considered to represent “one of the most comprehensive revisions of the Federal income tax system since its inception.”
March 15th is tax day for many corporations. As you prepare to file 2011 income tax returns, keep in mind that small businesses may be eligible for a tax credit to offset the cost of providing health insurance to their employees.
Deadline for Furnishing Notice of Health Coverage Options Approaches for Employers
DOL Releases Guidance Adopting State-of-Celebration Definition of Marriage for Same-Sex Spouses
Bloomberg BNA Releases Projected Inflation Adjusted Tax Figures
Buy-Sell Agreement?
DOL Proposal To Disclose Lifetime Income Projections Criticized