Treasury Plans to Pull Unpopular Discount Regulation

By:  Amanda Wilson

As discussed earlier this summer, Treasury and the IRS identified as a burdensome regulation the Proposed Regulations under Section 2704 of the Internal Revenue Code, which regulations would severely impact discounts on gifts made to family members.  (Our prior discussion can be found here.)   Today, Treasury issued a report announcing that it proposes revoking the proposed regulations.  This is good news for taxpayers. read more

Proposed Regulations Limiting Discounts on Family Gifts Targeted for Reform

By:  Amanda Wilson

Last summer, we discussed the IRS’s issuance of new Proposed Regulations under Section 2704 of the Internal Revenue Code, which regulations would severely impact discounts on gifts made to family members.  (Our prior discussion can be found here.)   Earlier this year, the Trump Administration issued an executive order instructing the Treasury Department to review all significant tax regulations issued after December 31, 2015 and identify any regulations that impose an undue burden on taxpayers.  The Treasury Department and IRS have completed this review, and have identified eight burdensome regulations that should be reformed.  The good news for taxpayers is that the Proposed Regulations under Section 2704 are on this list. read more

No Federal Estate Tax?

On April 16th, 2015 the U.S. House of Representatives voted overwhelmingly to repeal the federal estate tax.  Is this the death knell for the death tax?  Probably not this year.  But if there is a Republican President after the 2016 election, and the Republicans control the U.S. House and Senate, there may very well be a repeal of the estate tax.  The interesting thing to see is what other changes may be enacted if  that is the case.  For example, in 2010 when there was no estate tax, there was a limit on the amount of assets that would receive a “step-up” in basis.  This kind of idea has been pushed by President Obama who would like to see the basis step-up limited to $3,500,000 per person; and is certainly in the consciousness of many of those who do not want to see the estate tax abolished.  We will have to wait and see, but there is little doubt that there will be tax law changes in the future, just as there have been in the past.  It is important to review your estate plan with your attorney to ensure that what you drafted many years ago, still is the best plan for you. read more

Time to Fess Up on Foreign Financial Accounts

By Jason Palmisano

The IRS wants to know if a taxpayer has financial interests outside of the United States to ensure the taxpayer is not hiding money for illicit purposes (i.e., money laundering, tax evasion, or funding terrorism).  As such, the IRS requires a Report of Foreign Bank and Financial Accounts (FBAR) to be filed with the U.S. Department of Treasury by any United States person if: read more

IRS Provides Administrative Guidance to Employers in the Wake of Its Recognition of Same-Sex Marriage

By:  Amanda Wilson

Last month, the IRS announced that same-sex marriages would be recognized as marriages for federal tax purposes.  It is important to recognize that this position extends beyond individual income tax consequences and can impact employers as well. A number of income tax and employment tax provisions exclude from gross income and wages certain employee benefits provided to the spouse of an employee.  Before last month, the IRS took the position that benefits paid to same-sex spouses of employees did not qualify for these exclusion provisions.  The IRS has now changed its position and has stated that this change can be applied retroactively.  As a result, employers may find themselves in the situation of having overpaid employment taxes for employees that have a same-sex spouse.  The IRS has issued Notice 2013-61 to provide guidance to employers on how to deal with this situation.  Employers that have employees with same-sex spouses should be aware of this notice and consider how it may apply to them. read more