In Economic Substance Analyses Valuation analysts and other financial advisers are often called on to perform economic substance analyses in federal income tax challenges. In these cases, the Internal Revenue Service challenges a tax deduction or loss related to a taxpayer transaction by applying the so-called economic substance doctrine. This doctrine allows the Service to disallow a taxpayer transaction i ...

Thoughts from Experienced Litigation and Business Valuation Professionals Entering the Industry In this article, seasoned BV and litigation support professionals John DelGrego and Heidi Walker share why litigation can be invaluable to a BV professional. The co-authors also expound on the professional perils and high expectations placed by the Tax Court on expert witnesses. Expert witnesses must be objective ...

Case Involved $6M in Gift Tax and $5M in Estate Tax; Interest in General Partnership Sold for Private Annuity; Much Planning at the End of 2012 Bruce Givner at Financial Planning reports that U.S. Tax Court Judge Elizabeth Paris handed the taxpayers a victory last Thursday [2/14/2013]  involving a powerful estate tax planning tool: private annuities.   The case, Estate of Kite v. Commissioner, is important, ...

Tax Court Judges Structured Trust Advantaged Repackaged Securities” ("STARS") as Illegitimate.  Costs to BNY/Mellon May Exceed $800M. The Internal Revenue Service won a high-profile tax shelter case involving Bank of New York Mellon Corp. on Monday, in a ruling that could cost the company more than $800 million.  John D. McKinnon at the WSJ Washington Wire reports the news: ...

The IRS Has a Nationwide Organization of Approximately 2,000 Taxpayer Advocates to Help U.S. Individual and Business Taxpayers Resolve Problems.   Here's How It Can Help Advisors and Your Clients.  Nina E. Olson is the IRS’s National Taxpayer Advocate. Since 2001, she has led the Taxpayer Advocate Service (TAS), a nationwide organization of approximately 2,000 taxpayer advocates who help U.S. individual and ...

Few Business Owners Seem to Even Know How to Make a Good Guess at What Their Business is Worth.  NY Times Introduces Technology to Help—and Certified Advisers Provide Extra Value.  Mark Cohen, at The New York Times Small Business Guide, reports:  "At 53, Joe Ritz is old enough to remember a time when many of the classic cars that now pull into his specialized repair shop were new. “It’s one field where it p ...

A Valuation Principal Takes Issue With Revenue Ruling 59-60:  "Does Analysis of Macroeconomic Conditions Add Credibility to My Opinion of  Privately Owned Company Value In My Region?" Rick Warner, ASA, AVA, Principal, Great Lakes Valuations writes that "Most of us as appraisers are familiar with Revenue Ruling 59-60 and its prescription for factors to be considered as part of the valuation of the stock of c ...

Stakeholders Discuss Greater Institutional Investor Makeup, Governance Structures, Greater Regulatory Scrutiny Deloitte Insights contributes a piece to the CFO Journal on the Wall Street Journal site, part of a series designed to provide financial executives a customized resource to help them address the strategic, operational and regulatory issues they face in managing their finance organizations and caree ...

Details Found in IRS Explanation Issued Wednesday; $20,000 Figure Based on a Family of Four.   In a final regulation issued Wednesday, January 30, 2013, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.   Under Obamacare, Americans will be required to buy health insurance or pay a penalty to the I ...

Still Fighting for its RTRP Program;  More Case Analysis and Industry Reaction Frank Byrt at Accounting Web reports what's happened in last two weeks since the U.S. District Court for the District of Columbia found the IRS lacked authority to regulate independent tax preparers.  Here's more: ...

There Are Different Standards. They Have Different Places in Various Appraisals. Here’s Why. Jim Hitchner considers various responses to the query:  “When valuing an operating company, is it necessary to mention USPAP in addition to SSVS 1 when talking about the standards adhered to?”  Good question. There were lots of answers from various valuators in a recent discussion.  Here’s Jim’s take on it all. ...

You Can Now Follow the IRS on Twitter, Like it on Facebook, View Updates on YouTube, and Connect on LinkedIn Michael Cohn at Accounting Today reports at the Internal Revenue Service has joined the popular microblogging service Tumblr, expanding the IRS’s array of social media networks. ...

The Wall Street Journal Recounts What the IRS Advises:  Moves to Make as April Grows Near April deadlines may not be that far way,  but some Americans still haven’t even rounded up their W2s, the Wall Street Journal noted in a (just-before-deadline) filing last year.   Acknowledging the tax procrastination is a national pastime, the Internal Revenue Service issued some tips and a series of videos to help la ...

The Tax Court Speaks Loudly and Firmly on the Responsibilities of Business Appraisers Hempstead & Co. has published "Estate of Gallagher is a Valuation Tutorial."  The article emphasizes the importance of providing the court with a clear and convincing explanation of the assumptions and arguments you have employed in carrying out a business appraisal. It discusses the recent Tax Court Memorandum opinion ...

When Is a Foreign Tax Creditable Under Sec. 901?  The Tax Adviser's  James A. Beavers, J.D., LL.M., CPA, CGMA, reports that The U.S. Supreme Court has agreed to hear a case that delves into the contentious issue of when taxpayers are eligible to claim a foreign tax credit under Section 901 of the U.S. tax code. A ruling by the court would clarify part of the provision that has been litigated for decades. ...