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About This Blog

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.


Federal Tax

December 19, 2014

No Pay-or-Play Responsibility, But Reporting Required by Employers Just the Same

Does an employer that is not subject to the employer shared responsibility requirements have information reporting obligations for coverage offered to its full-time employees?

December 16, 2014

Health Care Pay-or-Play’s Take on Seasonal Workers and Seasonal Employees

Aren’t “seasonal worker” and “seasonal employee” interchangeable terms? Not when you are interpreting the employer shared responsibility provisions under the Affordable Care Act.

December 15, 2014

Treasury Releases Regulations Governing Retirement Savings Bonds

On January 29, 2014, President Obama issued a memorandum directing the Secretary of the Treasury to develop by year-end a new retirement savings security (originally called a “ myRA ”) focused...

December 8, 2014

Congratulations, You May Already Be Able to Direct Your Money Any Way You Want!

I couldn't help but think of the Publisher's Clearing House prize patrol as I read recent IRS guidance clarifying the taxation of rollovers from qualified plans to multiple destinations.  ...

December 5, 2014

Blazing a New Trail: The Brass Tacks About a Potential Grass Tax

State legislators have followed the general public opinion and have begun to legalize the sales and use of marijuana. Federal lawmakers now must contemplate whether they should follow suit. As with most commodities generating revenues, the issue of taxation must be addressed. A recent study by the Congressional Research Service explores the potential issues surrounding a federal marijuana excise tax.

December 4, 2014

Using IRA Funds for Personal Loans—How Bad Timing Affects a Good Cause

Your client took a short-term loan from her IRA, but the rollover of the amount was delayed. Can a letter ruling save the day?

December 3, 2014

When Your Return Preparer Betrays You

Identity theft has been pervasive.  In an earlier blog ( Identify Theft Pervasive, Overwhelms IRS (Dec. 1, 2014)) I discussed that while the IRS has increased its activity in the fight against...

December 2, 2014

Strict Documentation Required for Use of Vacation Rental Property

Tax practitioners often lecture clients about the importance of documentation.  Many clients don’t adhere to the advice, but even those that keep meticulous records can be surprised that the...

December 1, 2014

Identify Theft Pervasive, Overwhelms IRS

By now you may have heard one or more of the horror stories: the taxpayer files a return and eagerly awaits the expected refund, until he receives a letter from the IRS informing him that a...

December 1, 2014

The Importance of Being Shrewdest – Why Plan Participants Must Read Plan Provisions Carefully

A recent tax court decision shows that, while qualified plans must offer participants the chance to roll over benefits, qualified plans are not REQUIRED themselves to accept rollovers, even where the plan regularly accepts employee contributions.

November 28, 2014

Even Tax Lawyers Have a Stake in College Sports

With the arrival of the college football bowl season and college basketball regular season, there are few times of the year when sports fans across the nation pay closer attention to the...

November 26, 2014

Daily Employer-Provided Meals: As Taxable As They Are Delicious

Buried on page 8 of the IRS’s 2014-2015 Priority Guidance Plan, in the third item of subsection B, under the “Executive Compensation, Health Care and Other Benefits, and Employment Taxes” heading,...

November 26, 2014

I’m Afraid to Ask… Is this Slice of Cake Taxable?

Friends often ask me all sorts of questions when they first find out I am a tax attorney.  Some examples: Friend: Can I deduct the cost of these new shoes? Me: No. Friend: But I’m going to...

November 25, 2014

Potential Defense to Recent Infringement Lawsuit Could Shed Doubt on Patentability of Any ERISA Strategies

Many advisory firms that provide clients with computer-based investment programs designed to provide investment advice to participants in participant-directed retirement plans are closely...

November 23, 2014

New IRS Revenue Ruling Clarifies Taxation of Transit Benefits Provided via Electronic Media

Employers who provide transit benefits for their employees should pay close attention to an IRS ruling released last week, Rev. Rul. 2014-32, which provides updated guidance on the use...

November 19, 2014

Successor of TARP Recipient Can't Use Extended NOL Carryback

Successor of troubled asset relief program recipient can't use extended NOL carryback

November 17, 2014

IRS Releases Form for Individuals Claiming the Premium Tax Credit

The IRS has released the 2014 Form 8962, which individuals will use to determine their premium tax credit and to reconcile it with advance payments.

November 17, 2014

Another Affordable Care Act Deadline Extended – The Transitional Reinsurance

Self-insured group health plans and health insurance issuers received a last minute extension to file their transitional reinsurance annual enrollment count for 2014.

November 5, 2014

Close of Minimum Value Loophole May Launch Additional Duty for Some Employers

An employer that sponsors a self-insured group health plan for its full-time employees asks, “Don’t I escape ‘pay or play’ as long as the plan that I offer to my full-time employees is affordable and provides minimum value under the MV Calculator, even though it does not cover in-patient hospitalization services?” The IRS is taking action to ensure that the answer is “no,”

October 30, 2014

AICPA Challenge to the Voluntary Annual Filing Season Program Cannot Stand

The D.C. District court, which last year permanently enjoined the IRS from enforcing its registered tax return preparer program (see Loving v. IRS , 917 F. Supp. 2d 67 (D.D.C. 2013)), recently...

October 29, 2014

U.S. Supreme Court Plans to Address Limitations Period for Retirement Plan Fee Litigation

When does the clock start ticking on ERISA retirement plan participants’ claims brought against plan fiduciaries because the plan offers investment options with higher fees when comparable lower-cost alternatives are available? The U.S. Supreme Court granted certiorari in Tibble v. Edison Int’l

October 22, 2014

SSA Releases 2015 Social Security Changes

On October 22, 2014, the Social Security Administration released a Fact Sheet of the 2015 Social Security changes.  The most important changes include the following: 1.   The social security...

October 6, 2014

Is Profligacy Enough to Defeat Tax Discharge in Bankruptcy?

The 9 th Circuit in Hawkins v. Franchise Tax Bd. of Cal., 3:10-cv-02026-JSW, 2014 BL 255142 (9th Cir. 2014), recently held that, in order to apply 11 U.S.C. §523(a)(1)(c)’s exception from...

September 30, 2014

Roth IRAs and the Magical Disappearing and Reappearing Compensation Trick for Individuals with Foreign Earned Income

When is foreign-earned income not income for Roth IRA contribution purposes?   The answer to that question depends on the Roth IRA contribution limit in effect.  Under an annual IRS “dollar...

September 12, 2014

More Informal Clarification Provided on the 1-Rollover Rule Applicable to IRAs

In its September 11, 2014 webinar on retirement news and hot topics, an IRS employee, not speaking in an official capacity for the IRS, provided more information with respect to the effect of ...

September 12, 2014

The IRS Wants You to Know About the Form 5500-EZ Penalty Relief Program Before It’s Too Late

In its online webinar on Retirement News and Hot Topics held on September 11, 2014, the IRS discussed its Form 5500-EZ Penalty Relief Program for certain plan sponsors that failed to file an...

September 11, 2014

Calendar and Timelines Help Employers Keep Track of Affordable Care Act Obligations

The Affordable Care Act presents an ongoing challenge both for regulators formulating guidance and for employers and their professional advisers trying to keep up with that guidance and related deadlines and transition relief. The compliance calendar and timelines in the Health Care Reform Adviser on Bloomberg BNA’s Tax and Accounting Center help you keep track of what needs to be done.

August 29, 2014

What is a Willful Attempt to Evade Tax?

Among the many “gray areas” of taxation is what constitutes a willful attempt to evade or defeat tax.  The answer may lie in what circuit court has jurisdiction over the question.   In Vaughn...

August 20, 2014

The Final Tangible Property Regulations

The "Final" Final Tangible Property Regulations The final regulations issued as T.D. 9689 on August 18, 2014 represent the last major component of the IRS's long-running effort to provide...

August 14, 2014

College Student-Athletes Tell NCAA to Share the Wealth: Potential Tax Implications of the O’Bannon v. NCAA Antitrust Case

In  O'Bannon v. National Collegiate Athletic Association , No. 4:09-cv-03329-CW, 2014 BL 221080 (N.D. Cal. Aug. 8, 2014), the National Collegiate Athletic Association (NCAA) was found to be in...

August 11, 2014

Hacienda Issues Administrative Determination Letter Detailing Procedures for 2014 Prepayments of Puerto Rico Retirement Plan Amounts

Between July 1, 2014 and October 31, 2014, individuals participating in retirement plans operating in PR, whether qualified or not, can elect to prepay all or a portion of their accumulated...

August 8, 2014

Protection Required – Agencies Issue Guidance on Notice Requirements When Dropping Preventive Services

In Burwell v. Hobby Lobby Stores, Inc. , No. 13-354, 2014 BL 180313 (U.S. June 30, 2014), the Supreme Court ruled that regulations requiring closely held for-profit companies to provide...

August 7, 2014

Implementation of 2014 Puerto Rico Tax Prepayments by Plan Sponsors Is Optional

On July 1, 2014, the Governor of the Commonwealth of Puerto Rico signed House Bill 1919 into law, which became Act. 77-2014.   Generally, this Act provides rules on certain prepayments of P.R....

July 25, 2014

Redemptions of Shares in Floating NAV MMFs Are Exempted from Wash-Sale Rules

On July 23, 2014, the IRS announced in Rev. Proc. 2014-45, 2014-33 I.R.B. __ relief for shareholders of certain money market funds (MMFs). Unlike other types of mutual funds, MMFs have...

June 27, 2014

IRS Encourages Practitioners to Get Rid of Circular 230 Disclaimers in E-mails, Other Written Communications

Recently finalized Circular 230 rules (see T.D. 9668, 79 F.R. 30885 (6/12/14)) have significantly simplified the rules for practitioners when providing written advice and have eliminated the...

June 27, 2014

Supreme Court Ends Presumption of Prudence in Stock Drop Cases

The U.S. Supreme Court eliminated a presumption of prudence that ESOPs often relied on to defend stock drop cases. In Fifth Third Bancorp v. Dudenhoeffer , participants in an ESOP...

June 16, 2014

Sixth Circuit Sticks to Its Guns, Allowing Lessee-Purchaser to Deduct a Portion of Property Purchase Price as a Lease Termination Expense

Perpetuating a disagreement among courts, the Sixth Circuit in ABC Beverage Corp. v. United States , No. 13–01701 (6th Cir. June 13, 2014), reaffirmed its 1948 holding in Cleveland Allerton that...

June 5, 2014

Application of Title IV of ERISA to Plans Covering Puerto Rico Participants – an Unofficial Update

Plans that are subject to Title IV of ERISA must comply with, among other things: the payment of Pension Benefit Guaranty Corporation (PBGC) insurance premiums; the guarantee of minimum plan...

May 23, 2014

Guidance from Around the Globe Adds Uncertainty to How Cryptocurrency Mining Will Be Taxed

Governmental guidance on how to treat cryptocurrencies such as Bitcoin, Litecoin, and Dogecoin have been sparse and often leave more questions than answers.  Examining a combination of Notice...

May 22, 2014

The Effect of Inversions and Entity Expatriations on Key Executive Compensation: A Warning

A somewhat little-discussed but increasingly important provision in the Code that could negatively affect the compensation of key executives is §7874’s treatment of certain corporate inversions.  ...

May 16, 2014

Many Hints, Few Rules: Severstal Weighs in on Investment Advice

Perhaps the most subtle way in which ERISA may impose fiduciary status on an individual is under section 3(21), which deems as a fiduciary any individual who provides “investment advice” to an...

May 13, 2014

REITs and Real Property

Whether a particular item is real property is of critical importance to REITs, because a REIT must derive a certain amount of income from real property and hold a certain amount for investment....

May 13, 2014

Cooperative and Charity Plans Have 2014 To Choose Among Pension Funding Options

Congress recently passed the Cooperative and Small Employer Charity Pension Flexibility Act, P.L. 113-97, to provide relief from funding rules for pension plans that are maintained by nonprofit...

May 13, 2014

U.S. Supreme Court to Weigh in on Retirement Plan Stock Drop Case

Practitioners await the Supreme Court decision in Dudenhoffer v. Fifth Third Bancorp ., argued April 2, 2014, in which the Court will address the presumption of prudence in stock drop cases for the...

May 12, 2014

Bitcoin, Litecoin, Dogecoin and Other Cryptocurrencies Now Taxable Income

Whether you say “Vires in Numeris” or “To the Moon” your future with virtual currencies will change because of the taxman.   In Notice 2014-21, 2014 I.R.B. 938 (4/14/2014), the IRS issued its...

May 8, 2014

Conspicuous and Repetitive Disclaimer Attached to Benefit Calculation Wins the Day In Court

Typically, loud, conspicuous and repetitive is a recipe for disaster.   But not so when it comes to the law.   Not so.   NOT SO AT ALL.    In Spiewacki v. Ford Motor Co.-UAW Ret. Bd....

April 25, 2014

Tussey v. ABB, Inc.: Can a plan asset cease being a plan asset?

Among the issues addressed by the Eighth Circuit Court of Appeals in Tussey v. ABB, Inc. , Nos. 12-2056, 2014 BL 75252 (8th Cir. Mar. 19, 2014), was whether Fidelity Management Trust Co....

April 24, 2014

Announcement Clarifies Inconsistency Between IRS and Tax Court Interpretations of 1-Per-Year Rollover Limitation

Many practioners wondered how the IRS would apply the 1-IRA-rollover-per-year limitation of I.R.C. §408(d)(3)(B) after the Tax Court weighed in on the issue in Bobrow v. Commissioner , T.C....

April 9, 2014

Affordable Care Act Sheds Annual Deductible Limits for Employer-Sponsored Health Plans

The Affordable Care Act requires annual cost-sharing limits on coverage as part of the essential health benefits package required for plan years beginning in or after 2014. As enacted, it provided for annual limits on total cost-sharing and for annual limits on deductibles for insured employer-sponsored plans offered in the small group market. Section 213 of the Protecting Access to Medicare Act of 2014 (Pub. L. No. 113-93) eliminated

April 4, 2014

Pension Relief May Result in Loss of Church Plan Exemption for Multiple Employer Plans

Multiple employer church plans may lose their exempt status unless they affirmatively opt out of recently enacted pension relief. The Cooperative and Small Employer Charity Pension Flexibility Act...

March 26, 2014

Guidance on Changes in Method of Accounting for Depreciable Property Appears to Only Affect Unfiled 2013 Returns

Rev. Proc. 2014-7 supersedes and expands the scope of Rev. Proc. 2012-20 to provide taxpayers the option of changing their methods of accounting to comply with either the temporary or proposed regulations generally for taxable years beginning in 2012 or 2013. However, practically speaking, only taxpayers who have not yet filed (including extensions) their 2013 returns appear to be able to benefit from the automatic consent procedures provided in Rev. Proc. 2014-17.

March 19, 2014

IRS Guidance on Changes in Method of Accounting for Depreciable Tangible Property

  On February 28, 2014, the IRS issued Rev. Proc. 2014-17 detailing long anticipated guidance regarding certain changes in method of accounting for depreciable tangible property under the final, temporary, and proposed tangible property regulations. Rev. Proc. 2014-17 updates Rev. Proc. 2011-14 and supersedes prior guidance provided in Rev. Proc. 2012-20.  

February 27, 2014

Partnership's Transfer of Tax Credits for Cash Is a Disguised Sale

In Route 231 v. Comr., T.C. Memo 2014-30, the U.S. Tax Court held that a contribution of $3.8 million from an LLLP (X) to an LLC (Y) taxed as a partnership in exchange for (1) Virginia tax...

February 12, 2014

IRS Oversteps Authority on Regulating Multibillion Dollar Industry

On February 11, 2014, the Court of Appeals for the D.C. Circuit ruled on the Loving  decision regarding registered tax return preparers (RTRPs). The court upheld the district court, holding that...

January 30, 2014

Tax Court’s Interpretation of 1-Per-Year Rule Curtails IRA Rollovers

A recent tax court decision changes the common understanding of the “one-rollover-per-year” rule, potentially resulting in a new restriction on IRA rollovers. Code §408(d)(3)(B) provides that...

January 29, 2014

An ERISA Claim Walks Into a Bar – A Followup: Heimeshoff v. Hartford Life

In an earlier blog, I discussed and analyzed oral arguments presented to the U.S. Supreme Court in Heimeshoff v. Hartford Life & Accident Ins. , No. 12-729 (10/15/13).   See ...

December 2, 2013

Who Gets the Partnership Allocations?

Are undistributed partnership allocations attributable to a transferred nonvested partnership capital interest allocated to the holder of the nonvested partnership interest or to the partners in...

November 26, 2013

Supreme Court Agrees to Review Birth Control Mandate Cases

On November 26, 2013, the U.S. Supreme Court agreed to consider whether the Affordable Care Act's preventive services mandate, which requires health insurance plans to cover contraceptives, violates...

November 6, 2013

No Individual Mandate Penalty Arises from Extended Exchange Open Enrollment for 2014

Can an individual really be penalized for signing up for health insurance through the Health Insurance Marketplace during open enrollment? Thanks to a good idea--the extension of the initial open enrollment period through March 31, 2014--it looked like the answer could be “yes.”

October 22, 2013

An ERISA Claim Walks Into a Bar...: Supreme Court Hears Oral Arguments in Heimeshoff v. Hartford Life

On October 15, 2013, the U.S. Supreme Court heard oral arguments in Heimeshoff v. Hartford Life & Accident Ins. Co. , No. 12-729 (10/15/13).    The case involved a dispute over a contractual...

October 17, 2013

Medical Conditions Are Not a Bar to Health Insurance Coverage Under the Affordable Care Act

For plan years beginning on or after January 1, 2014, the Affordable Care Act prohibits health insurance companies from denying health insurance coverage based on preexisting conditions and from refusing to provide or renew coverage. While these are not new protections, the Affordable Care Act increases their availability

October 11, 2013

Small Employers Shop the SHOP Exchange

Starting in 2014, small employers may chose to make health-care coverage available to their employees through the Small Business Health Options Program (SHOP). The SHOP Exchange, also known as a SHOP Marketplace, allows the employer to select qualified health plans in the small group market from which employees may get coverage. The employer chooses

October 11, 2013

Fraud by Partnerships’ Advisers Cannot be Imputed to Partners

The Court of Federal Claims recently found that, although a partnership’s tax returns included false or fraudulent items resulting from transactions fraudulently structured by the taxpayers’...

September 19, 2013

Bloomberg BNA Releases Projected Inflation Adjusted Tax Figures

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...

September 19, 2013

DOL Releases Guidance Adopting State-of-Celebration Definition of Marriage for Same-Sex Spouses

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

DOL Proposal To Disclose Lifetime Income Projections Criticized

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

Deadline for Furnishing Notice of Health Coverage Options Approaches for Employers

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

Buy-Sell Agreement?

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

De-Risking on the Horizon for Many Pension Plans

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

Bloomberg Law Event: Outlook on Tax--The Future of Corporate Taxation

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

A State of Celebration - Treasury and IRS Issue Ruling Implementing Effect of Windsor Decision

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 Premier State Tax Library

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

Who Gets the Pay Out? Plan Sponsors Resort to Interpleader Actions After U.S. v. Windsor

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

The Tax Court Weighs In on LILOs and SILOs

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)...

August 16, 2013

IRS Proposed Rules Would Allow for 10-Year Timeframe for Innocent Spouses to Seek Equitable Relief under §6015(f)

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...