3008, 2017

Practitioners Welcome Memo on Research Credit Payroll Application

By |August 30th, 2017|Resource Library|0 Comments

Last month, the IRS released a memorandum clarifying exactly how start-up companies can use the R&D Tax Credit to offset their payroll tax liabilities. Before the memo, there was some confusion as to whether or not start-ups needed to wait until the end of the year to apply the R&D credit against their payroll taxes. The IRS has clarified that start-up companies may apply the R&D credit to offset estimated payments. Hence, these companies are not required to wait until the end of their tax year when filing to claim the R&D credit.

In this memo, the IRS is continuing to clarify laws laid out in the Protecting Americans from Tax Hikes (PATH) Act of 2015. In March of this year, the IRS released another memo about how start-ups can determine gross receipts for the purpose of being classified as a start-up business. Start-ups can claim up to $250,000 of R&D […]

2607, 2017

Time to Revise Partnership Agreements

By |July 26th, 2017|Resource Library|0 Comments

On June 13, proposed regulations implementing the partnership audit regime enacted by the Bipartisan Budget Act of 2015 were issued. These rules modify the way that the IRS will conduct partnership examinations while repealing TEFRA and Electing Large Partnership (ELP) rules.

Although the new rules take effect January 1, 2018 now is the time to consider the impact on partnership agreements and to make amendments. The changes provide that adjustments made to a partnership during audit will now have taxes paid at the partnership level. This is a dramatic change from the former method of looking to each partner to pay the additional tax. Importantly, the additional tax will be paid at the highest individual tax rate in the year of the examination (adjustment year) and not for the tax year in controversy (reviewed year). This may have a significant impact if partnership interests are transferred. […]

2504, 2017

Court Denies Injunction to Delay Captive Insurance Reporting Disclosure

By |April 25th, 2017|Resource Library|0 Comments

On Friday, April 21, a District Court judge denied a taxpayer’s request Summary Judgement for a preliminary injunction to prohibit the IRS from enforcing the disclosure requirements set forth in Notice 2016-66. The Court’s ruling comes on the heels of the May 1st disclosure deadline the IRS has imposed on IRC § 831(b) captive insurance companies, their insureds, owners of the insureds, and material advisors to the transactions.

On November 1, 2016, the IRS issued the Notice 2016-66, which makes most IRC § 831(b) captive insurance arrangements, “transactions of interest,” which requires those involved to file yearly detailed disclosure statements with the IRS. The original due date for these disclosures was January 30, 2017. However, Notice 2017-08 pushed this deadline to May 1, 2017.

Notice 2016-66 generally requires captive insurance companies, their insureds, and owners of the insureds, to file Forms 8886 pertaining to the captive insurance arrangement if the […]

1003, 2017

Alliantgroup’s Steven Miller and Robert Russell present at the Federal Bar Association’s Federal Tax Conference in Washington D.C.

By |March 10th, 2017|Resource Library|0 Comments

Steven Miller, alliantgroup’s National Director of Tax, presented on a panel with a current IRS executive to discuss current IRS enforcement initiatives. Key areas of focus were on the newly announced IRS audit campaigns, examination procedures, and the rebirth of reportable transactions and transactions of interest reporting.

Russell was joined by members of the Treasury Department and IRS Chief Counsel to address current developments in international taxation. Topics addressed included updates to the foreign tax credit rules and new regulations on certain cross-border M&A activity. Russell also address the potential impact to the U.S. from the recent European Union State Aid investigations.

2811, 2016

alliantgroup’s Kathy Petronchak Quoted in Tax Notes

By |November 28th, 2016|Resource Library|0 Comments

Earlier this month, Kathy Petronchak, alliantgroup’s Director of IRS Practice & Procedure and the former IRS Commissioner of the Small Business/Self-Employed (SB/SE) Division, was quoted in Tax Notes regarding a letter from the IRS Office of Appeals. The letter from Appeals Chief Kirsten Wielobob clarified four specific procedural changes that were recently implemented and provided greater context into why such modifications have been made.

In Marie Spairie’s article “IRS Appeals Chief Clarifies Policy Changes in Open Letter,” Petronchak offers her thoughts on the changes and applauds Appeals’ for being transparent in their reasons for implementing the modifications in the first place.

Kathy Petronchak of alliantgroup LP concurred. "Transparency with regards to the reasons behind the changes helps us to better understand them, even if we are not in agreement," Petronchak said.

411, 2016

alliantgroup’s Steven Miller Quoted in the Daily Tax Report

By |November 4th, 2016|Resource Library|0 Comments

On November 4, alliantgroup’s National Director of Tax and former IRS Acting Commissioner Steven Miller was quoted in the Daily Tax Report regarding a notice from the Service with respect to a significant number of micro-captive insurance arrangements.

In Allyson Versprille’s article “Is ‘Micro-Captive’ Insurer Guidance the IRS’s Nuclear Option” Versprille discusses the notice released earlier this month that listed section 831(b) micro-captives as “Transactions of Interest.” Such a designation will require that captive insurance companies, insured parties and certain owners, and other involved parties and advisors (including captive managers) meet certain disclosure and recordkeeping requirements by January 30, 2017 or face heavy penalties. The notice will have a tremendous and immediate impact on the industry, with the article noting that up to 90 percent of 831(b) captives could be affected by the new IRS guidance.

When asked to comment, Miller had this to say with respect to the notice and […]

111, 2016

Dean Zerbe Quoted in Tax Notes on IUS Final Regs for R&D Tax Credit

By |November 1st, 2016|Resource Library|0 Comments

Final Regulations for Internal-Use Software Light on Changes, Remain Taxpayer-Friendly

Dean Zerbe, alliantgroup’s National Managing Director and the former Senior Counsel to the U.S. Senate Finance Committee, was quoted in Tax Notes regarding the release of internal-use software final regulations for the R&D Tax Credit on October 3. In Andrew Velarde’s article “Internal-Use Software Final Regs Light on Changes,” Zerbe offers his thoughts on the final regulations, which contain very few modifications from the taxpayer-friendly IUS proposed regs of January 2015.

Last year’s proposed regulations were significant to taxpayers in that they both clarified and narrowed the definition of IUS, which has a higher standard to qualify for the R&D Tax Credit than does traditional software development. By narrowing the definition of IUS to […]

1807, 2016

A small business goes up against the State of Louisiana. . . and wins!!!

By |July 18th, 2016|Resource Library|0 Comments

The First Circuit Court of Appeals in Louisiana has handed a small victory to businesses who claim the Louisiana Research and Development Tax Credit.

Promyse Prosthetics is a small home grown business that provides custom orthotics and prosthetics to kids and veterans. They applied for state research and development tax credits and were denied after being approved for several years. The state benefit is administered through the Louisiana Department of Economic Development that opined that their department is the final decision maker in awarding the research credit to businesses under Louisiana Revised Statute 47:6015. The Louisiana research credit statute adopts the definition of qualified research as codified in Internal Revenue Code § 41, and states the business shall receive the credit if it satisfies the definition of qualified research.

On the heels of […]

1506, 2016

Ninth Circuit Court of Appeals Affirms Tax Court Decision on Conservation Easement

By |June 15th, 2016|Resource Library|0 Comments

By Steven Miller, former IRS Acting Commissioner and alliantgroup National Director of Tax

On June 1, 2016, in MOUNTANOS v. COMMISSIONER, No. 14-71580, 2016 WL 3079688, at *1 (9th Cir. June 1, 2016), the Ninth Circuit, in an unpublished, three page opinion, affirmed the Tax Court’s decision to disallow a charitable contribution deduction for the donation of a conservation easement and apply gross valuation misstatement penalties. The taxpayer donated the conservation easement in 2005, claimed a $1.3 million deduction in the 2005 tax year, and claimed a total of $3.39 million in carryover deductions for the 2006 through 2008 tax years. It appears that the statute of limitations had run on the 2005 tax year when the audit began because 2005 was not at issue in litigation; only 2006 through 2008 […]

3105, 2016

IRS Issues Written Determinations on Foreign Captive Insurance Arrangements

By |May 31st, 2016|Resource Library|0 Comments

The IRS recently released LTR 201609008, in which it found a foreign captive insurer to not be an insurance company exempt from tax under IRC § 501(c)(15). The specifics of the determination were released as a redacted Form 886-A Report of Examination that found the taxpayer did not meet the requirements of IRC § 501(c)(15) because it did not qualify as an insurance company. 

The Facts

Under IRC § 501(c)(15), an insurance company qualifies for tax exempt status if 1) the gross receipts for the taxable year do not exceed $600,000, and more than 50 percent of gross receipts consist of premiums, or 2) in the case of a mutual insurance company, gross receipts do not exceed $150,000, and more than 35 percent of such gross receipts consist of premiums. The gross receipts tests are […]

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