2007 Annual Tax Update: Corporations and Pass-Through Entities

• Introduction
• Chapter 1 - Corporate Formation and Liquidation
  • Learning Objectives
  • Corporate Reorganizations
    • D Reorganizations with Identical Ownership - No Stock Issued
    • Liabilities in Reorganizations
    • Active Business Rules and §355
    • Temporary Regulation §1.368-1T(e)(2) - Continuity of Interest
    • Proposed §355 SAG Guidance
    • Active Conduct Requirement of §355(b) with LLC
  • Interaction of §447(i) Account with a §351 Transaction
  • Charitable Organization Restructuring Related Activities
• Chapter 2 - Income and Deductions
  • Learning Objectives
  • Cancellation of Distribution Agreement - Gain Treatment
  • §475 Dealers and Traders
    • Final Regulations - §475 Fair Value Safe Harbor
    • §475 Safe Harbor Valuation
  • Sale of Land for Operating Foundation Asset Diversification
  • Payments at Food Shows Not Income to Co-op
  • Charitable Contribution of Computer Equipment
    • Background
    • Increased Contribution Period Extended
    • Limit on Deductible Compensation §162(m)
  • Domestic Production Activities Deduction
    • Background
    • Puerto Rico Part of U.S. for the PAD
    • Other PAD Changes Now Effective
    • Regulations for §199 - Online Software and Cooperatives
    • Section 199 - Mineral Extraction - Qualifying In-kind Partnership
    • Calculating QPAI at Entity Level
    • Use of Statistical Sampling with §199
    • Other Proposed §199 Rules
  • Specified Liability Losses with Chance for Recovery
  • Expensing Environmental Remediation Costs
    • Background
    • Deductibility Extended Two Years and Expanded to Include Petroleum Products
  • Treatment of NSF Credit Card Fees
  • Hobby Losses
    • Activity Aggregation - Topping 93 TCM 1120
  • Amending Regulations for Lodging Expenses
• Chapter 3 - Taxes and Credits
  • Learning Objectives
  • Employee Classification
    • Employee versus Contractor
    • Individual Treated as Contractor - Failure to File
  • Credit for Increasing Research Activities
    • Background
    • Research Credit Extended Two Years
  • Energy Efficient Home Contractor Credit Extended
    • Background
    • Energy Efficient Home Contractor Credit Extended
  • Work Opportunity Tax Credit
    • Background
    • Small Business and Work Opportunity Tax Act Extends and Modifies the WOTC
  • Credit for Taxes Paid - Employee Cash Tips - §45B
    • Background
    • Tip Credit Continues to be Based on Minimum Wage of $5.15
  • WOTC and Tip Credit Allowed for AMT
    • Background
    • WOTC and Tip Credit Offset AMT
  • Indian Employment Tax Credit §45A
    • Background
    • Credit Extended Two Years
  • Reminder - Foreign Tax Credit
• Chapter 4 - S Corporations
  • Learning Objectives
  • S Corporation Changes - Small Business and Work Opportunity Tax Act
    • Capital Gains from Stock Sales - Not Passive Investment Income
    • Bank Director Shares Not Second Class of Stock
    • Changes from Reserve Method of Accounting
    • Treatment of Sale of Interest in QSub
    • Elimination of Pre-1983 Earnings and Profits
    • Interest Expense Incurred by Small Business Trusts
  • S Corporation - No Salary
  • S Corporation Open Account Debt
  • Cancelling Corporate Advances and Closing Agreements
  • Loss Importation Rules - S Corporation and Foreign Entity
• Chapter 5 - Partnerships
  • Learning Objectives
  • Family Business Tax Simplification
    • Background
    • SBTA Changes for Family Businesses
  • Consulting Partnership Restructuring - Taxability of Gain under Agreement
  • Partnership Property to Satisfy Guaranteed Payment
  • Like-kind Exchanges Involving Partnerships
    • Qualified Intermediary - Potential Partners also Referring Business
  • Partner's Distributive Share Taxable When Earned - Actual Funds in Escrow
  • Combining Partnership and Partner Gambling Losses
  • Other FPAA Issues
    • Sham Status Determined at Partnership Level
    • Partnership Not Small for TEFRA Procedures Due to Same Share Rule
• Chapter 6 - Basis, At-Risk, and Passive Activities
  • Learning Objectives
  • Economic Substance
    • Partnership Loans Lacking Substantial Economic Effect
    • Partnership Settlement Language - Lack of Economic Substance
  • Limitation Period
    • Partner and Partnership Limitation Period - FPAA
    • Partner Statute of Limitations - Grapevine Case
    • Overstating Basis Not Same as Omission - Bakersfield Energy Case
    • Overstatement of Basis is Omission - Brandon Ridge
  • Passive Losses
    • Self-Rental Rule - Beecher - 2007-1 USTC ¶50,379
    • Due Process - Ziegler - TC Memo 2007-166
• Chapter 7 - Owner-Entity and Related Party Transactions
  • Learning Objectives
  • Return Required for Certain Stock Transfers
  • Capital Loss Disallowed
    • Related Company Transaction - H.J. Heinz Company, 2007-1 USTC ¶50,517
  • Use of Corporate Funds for Personal Purposes
  • Bad Debt Deduction Disallowed
    • Constructive Dividend
  • Stock Redemption - Potential for Self-Dealing
  • Personal Service Corporations
    • Attempted Use of Treasury Shares to Fail Ownership Test Unsuccessful
    • Tax and Bookkeeping Firm Classified as PSC
  • Like-Kind Exchanges
    • Transfer of Property between Siblings to Allow Like-kind Treatment
    • Related REIT Purchases Property
• Chapter 8 - Accounting Method and Periods
  • Learning Objectives
  • Economic Performance Issues
    • Incurring Liabilities for Services
    • Economic Performance Exceptions When Services Are Provided After the 3 & ½ and 8 & ½ Month Periods
    • Payroll Tax Liability - Deferred Comp
  • Examination of §751(c)(2) Unrealized Receivables - Method Change
  • UNICAP §263A Simplified Service Cost and Simplified Production Method
• Chapter 9 - Depreciation and Amortization
  • Learning Objectives
  • Section 179
    • Background
    • Current Limits
    • Importance of Proper §179 Election
  • 15 Year Leasehold and Restaurant Property
    • Background
    • 15 Year Recovery Extended
  • Energy Efficient Commercial Building Deduction Extension
    • Background
    • Energy Efficient Commercial Building Deduction Extended
  • Accelerated Depreciation for Business Property on Indian Reservations
    • Background
    • Accelerated Depreciation for Business Property on Indian Reservations Extended Two Years
  • Manner of Correcting Depreciation Errors
  • Depreciation Changes - Accounting Method
  • Depreciation of MACRS Property Acquired in a Like-kind Exchange
    • Background
    • Final Regulations
    • Electing Out
  • Rotable Spare Parts
  • Class Life of Schedule F Vineyard Property
  • Taxable Income Limit on Percentage Depletion for Oil and Natural Gas Produced from Marginal
  • Properties
    • Background
    • Marginal Production Income Limitation Extended Two Years
  • GO Zone - Extension of Placed-in-Service Deadline §1400N
    • Background
    • Deadline Extended for Specified Property
  • GO Zone Changes of the Small Business and Work Opportunity Tax Act
    • Section 179
    • Extension and Expansion of Low-Income Housing Credit - Buildings in the GO Zone
    • GO Zone Bond Financing Rules
    • GAO Study
• Chapter 10 - Retirement Plans
  • Learning Objectives
  • Retirement Limits
    • Plan Limits
    • IRA Limits
  • Final Regulations - Distributions from Roth 401(k)
    • Background
    • Final Regulations
  • Prohibited Allocations of Securities - S Corporation ESOP Final Regulation
    • Background
    • Final Rules
  • Changes to §415 Regulations and Technical Corrections
    • Plan Filings - Form 5500
• Chapter 11 - Fringe Benefits
  • Learning Objectives
  • Final Regulations - Distributions from Pension at Normal Retirement Age
  • HSAs
    • Tax Relief and Health Care Act HSA Modifications
    • Adjusted HSA Amounts for 2007 and 2008
  • FSA and HRA Reimbursement - Use of Debit Cards
    • Background
    • Relief Provided
    • Drug Stores and Pharmacies
  • Health FSA and HRA Rollovers to HSA
  • Maximum Value of Employer Provided Vehicles
    • Background
    • 2007 Calendar Year Maximum Values
  • §409A Final Regulations Issued
    • Review of §409A
    • Final Regulations
    • Independent Contractors
    • Stock Options and Stock Appreciation Rights
  • Notice 2007-34, 2007-17 IRB 996, Application of Section 409A to Split-Dollar Life Arrangements
  • Accrued Leave Electively Contributed to Post-Retirement Health - Included in Gross Income
• Chapter 12 - IRS Compliance Matters
  • Learning Objectives
  • Change in Realistic Possibility Standard and Return Preparer Definition
    • Background
    • Income Tax Return Preparer Changed to Tax Return Preparer
    • New More-Likely-Than-Not Standard and Increased Penalty
    • Transitional Relief for Return Preparer Penalties
  • Frivolous Tax Submissions
    • Background
    • Changes to §6702
  • Other Revenue Raising Provisions of the Small Business and Work Opportunity Tax Act
    • Suspension of Penalties and Interest
    • Modification of Collection Due Process Procedures for Employment Tax Liabilities
    • Permanent Extension of IRS User Fees
    • Increase in Penalty for Bad Checks and Money Orders
    • Penalty for Filing Erroneous Refund Claims
    • Time for Payment of Corporate Estimated Tax
  • Statute of Limitations
    • Preparer Fraud - Open Statute - Allen Case 128 TC No. 4
  • Trust Fund
    • Responsible Party - Hagen Case - 2007-1 USTC ¶50,510
  • Responsible Party for Excise Taxes - COO Liable
  • Request for Penalty Rescission - §6707, 6707A
  • Improper Return Preparer Conduct
    • Reddy Case - 2007-2 USTC ¶50,529
    • Filing not Required for §7206(2) - Borden Case
    • Aiding in False Return Vacated - Palivos Case
  • Gaming Industry Tip Compliance Agreement Program
  • Public Inspection of UBIT Returns
    • Interim Guidance
  • Fraud by Payroll Company - Taxpayer Still Liable
  • Privilege
    • Service 3rd Party Summons to CPA - Kuehne Case
    • Attorney Client and Tax Practitioner Privilege - BDO Case
  • Service's 12 Most Blatant Tax Scams
    • What to Do If Fraud Is Suspected
  • Regional Income Tax Agencies Treated as States for Confidentiality and Disclosure
    • Background
    • Changes for Regional Tax Agencies
    • Other TRHCA Changes in this Area
  • Whistleblower Reforms §7623
    • Background
    • Changes to the Reward Program
    • Failure of Service to Reward Informant - Conner Case
  • Required Website Registration
  • Electronic Filing - 2008 Filing Season
• Chapter 13 - Deferred Taxes and FIN 48
  • Learning Objectives
  • SFAS 109
    • Objectives
    • Timing Differences
    • Scope
    • Deferred Tax Assets and Liabilities
    • Intraperiod Allocation
    • Disclosure
    • Recent Activity
  • FIN 48
    • Tax Positions
    • Recognition Standard
    • Disclosure
    • Other Areas of Note
    • Key Point
• Chapter 14 - Practice Aids
  • Learning Objectives
  • Tax Rate Schedules for 2007
    • Married Individuals Filing Joint Returns and Surviving Spouses
    • Heads of Households
    • Unmarried Individuals (other than Surviving Spouses and Heads of Households)
    • Married Individuals Filing Separate Returns
    • Estates and Trusts
    • Corporations
  • Circuit Court of Appeals by State/Territory
  • 2007 Mileage Rates
  • Per Diem Rates
    • SIFL Rates
    • Notice 2007-25, 2007-12 IRB 760, Foreign Housing Amounts - Adjustments and Additions to Notice 2006-87
  • Hybrid Auto Info
  • Auto Depreciation Limits - §280F
  • Lease Inclusion Amounts - §280F
  • List of 40 Frivolous Positions - §6702 - $5,000 Penalty
  • Selected 2007 Draft Forms
• Chapter 15 - Ethics Focus: Taxation
  • Ethics Overview
  • Recent Developments
  • Spotlight on Independence in Tax Services
  • Key Ethical Dilemmas and Judgment Calls
  • Addressing Ethical Dilemmas
  • Available Resources
• Chapter 16 - Latest Developments

733690