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The Internal Revenue Service (“IRS”) issued Private Letter Ruling 105886-13 on July 15th, 2013 regarding the treatment of a subsidiary’s post-merger net positive income, net capital gain and Internal Revenue Code (“IRC”) 38(c) contributions for the purpose of computing a Separate Return Limitation Year (“SRLY”) subgroup’s consolidated net income, consolidated net capital gain and consolidated…

On October 24th, 2013, in Advo, Inc. & Subsidiaries, Petitioner v. Commissioner of Internal Revenue, Respondent (“Advo”), 141 T.C. No. 9, the United States Tax Court held that the taxpayer did not have the “benefits and burdens of ownership” of the direct advertising materials, and was therefore not entitled to the IRC section 199 Domestic…

On Monday, November 4th, IRS Commission of the Large Business and International Division (“LB&I”), Heather Maloy, issued a memorandum (LB&I-04-1113-009) clarifying updates to the Information Document Request enforcement process. In June of 2013, the Service announced (in LB&I-04-0613-004) new protocols for issuing and enforcing Information Document Requests (“IDRs”), the most common tool used by IRS…

In a press release dated November 6, 2013, the IRS Small Business/Self Employed Division (“SB/SE”) announced the nationwide availability of the Fast Track Settlement (“FTS”) program. Fast track settlement is an alternative dispute resolution option for taxpayers in examination. It allows the taxpayer and IRS auditors to meet collectively to resolve a case without resort…

On October 22, 2013, the Internal Revenue Service announced it will delay the 2014 filing season approximately one or two weeks to provide the necessary time to sufficiently program and test its tax processing systems. This will move the original start date of the filing season from January 21st until sometime in the period of…

On July 24th, 2013, the First Circuit for the US Court of Appeals held in Sun Capital that the private equity fund in question was a trade or business under ERISA. In the case, the Court examined the structure of the Sun Funds, which identified portfolio companies in need of intervention with regard to management…

On June 18th, 2013, the Large Business and International Division (LB&I) of the IRS released a memorandum (LB&I-04-0613-004) outlining changes to the Information Document Request (“IDR”) process. In particular, the IRS provided that all IDRs issued after June 30, 2013, must be issue focused, they must be discussed with the taxpayer, and the taxpayer and…

On July 9, 2013, Hawaii Governor Neil Abercrombie (D) signed bill SB 1349 , which reestablished the research and development tax credit for qualified research activities. The State credit tracks the federal credit for increasing research activities found at I.R.C. § 41, thus providing consistency between Federal and State standards. Taxpayers must be claiming the…