Paul L. Caron
Dean
Pepperdine Caruso
School of Law
IRS News
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WSJ: The Tax Treatment of Frequent Flier Miles
Following up on my prior posts (links below): Wall Street Journal Tax Report, Frequent-Flier Tax Traps, by Laura Saunders: The tax treatment of frequent-flier miles is at center stage following the disclosure that thousands of Citibank customers received notices in January that miles they received for opening new accounts last year produced taxable income. Citi…
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TIGTA: IRS Fails to Ensure That Defendants Convicted of Tax Crimes Actually Pay Taxes Owed
The Treasury Inspector General for Tax Administration today released Procedures Are Needed to Improve the Accounting and Monitoring of Restitution Payments to Prevent Erroneous Refunds (2012-30-012): When a defendant pleads guilty or is found guilty of a tax-related crime, the terms of a defendant’s sentence can include various combinations of imprisonment, probation, and monetary penalties…
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IRS Clarifies Tax Treatment of Frequent Flier Miles
Following up on last week's post, Why Does Citibank, But Not the IRS, Treat Frequent Flyer Miles as Taxable Income?: Press Release, Sen. Brown Calls on Citibank to End Deceptive Frequent Flier Tax Practice The Hill, Senate Dem Calls Out Citibank on Airline Miles L.A. Times, IRS Clarifies its Stand on Whether Airline Miles Are…
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Welcome to the Tax Blogosphere: Nina Olson
National Taxpayer Advocate Nina Olson has started a blog: Welcome to the National Taxpayer Advocate’s blog about taxpayer rights and taxpayer burden. For starters, let me explain that I use the term “taxpayer rights” here to mean not only statutory rights but also the unstated “agreement” underlying our system of voluntary tax compliance. That is,…
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Why Does Citibank, But Not the IRS, Treat Frequent Flyer Miles as Taxable Income?
Los Angeles Times, Citibank Deems Frequent-Flier Miles Taxable, but Does the IRS?, by David Lazarus: Frequent-flier miles clearly have value — why else would people want them? But do they also represent taxable income? Citibank seems to think so. It's sending tax forms to people who received thousands of miles as a reward for opening…
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IRS Begins Accepting e-Filed Tax Returns; Free for Taxpayers With < $57,000 Income
IR-2012-7 (Jan. 17, 2012), IRS e-file Launches Today; Most Taxpayers Can File Immediately: The IRS opened the 2012 electronic tax return filing season today with a reminder to taxpayers that e-file remains the best way to get fast refunds and ensure accurate tax returns. IRS e-file has surpassed the milestone of 1 billion returns processed.…
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Joint Tax Committee Releases Tax Expenditure Estimates for 2011-15
The Joint Committee on Taxation today released Estimates of Federal Tax Expenditures for Fiscal Years 2011-2015 (JCS-1-12): Tax expenditure analysis can help both policymakers and the public to understand the actual size of government, the uses to which government resources are put, and the tax and economic policy consequences that follow from the implicit or…
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National Taxpayer Advocate Releases Annual Report to Congress
National Taxpayer Advocate Nina E. Olson today released (IR-2012-6) her 2011 Annual Report to Congress, which lists the twenty-one most serious problems encountered by taxpayers (as required by § 7803(c)(2)(B)(ii)(III): National Taxpayer Advocate Nina E. Olson today released her annual report to Congress, identifying the combination of the IRS’s expanding workload and declining resources as…
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IRS: Tax Gap Widens to $450 Billion
IR-2012-4 (Jan. 6, 2012), IRS Releases New Tax Gap Estimates; Compliance Rates Remain Statistically Unchanged From Previous Study: The IRS today released a new set of tax gap estimates for tax year 2006. … The new tax gap estimate represents the first full update of the report in five years, and it shows the nation’s…
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IRS Increases Audits of Taxpayers With >$200k Income by 34%
The IRS yesterday released FY 2011 IRS Enforcement and Service Results showing, among other things, that 3.9% of taxpayers reporting over $200,000 of income were audited (an increase of 34% from 2010 (from 58,521 to 78,392), and 12.5% of taxpayers reporting over $1,000,000 of income were audited (an increase of 24% from 2010 (from 16,509…
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IRS Provides Additional Relief for Innocent Spouses
The IRS yesterday released new proposed guidelines designed to provide relief to more innocent spouses requesting equitable relief from income tax liability. IR-2012-03 (Jan 5, 2012) Notice 2012-8, 2012-4 I.R.B. ___ (Jan. 23, 2012) Tax Information for Innocent Spouses
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TIGTA Commends IRS for Diversity of its Senior Staff
The Treasury Inspector General for Tax Administration yesterday released Internal Revenue Service Diversity Demographics Compare Favorably With Other Federal Agencies’ Senior Executive Service Ranks (2011-10-006): The IRS’s diversity demographic statistics compare favorably with other Federal agencies’ SES ranks. For example, in Fiscal Year 2009, the IRS SES level had a higher percentage of diversity in…
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IRS Releases Fact Sheet on 2011 Tax Law Changes
The IRS has released a fact sheet (FS-2012-01) highlighting several 2011 tax law changes: Two Extra Days to File and Pay Tax Benefits Extended Limited Nonbusiness Energy Property Credit Available in 2011 Repayment of First-Time Homebuyer Credit New Way to Report Capital Gains and Losses Reporting Roth Conversions Standard Mileage Rates Up in 2011 AMT…
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What If the IRS Asked Website Visitors to ‘Like’ President Obama on Facebook?
Mary O'Keeffe (Union College) agreed to let me share her interesting post today on the TaxProf email discussion group with the broader tax community: I was shocked when I went to the (normally sedate) New York State Tax Department website this morning. About 20% of the real estate on their front page was given to…
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TIGTA: 300 Prisoners (Including 43 Serving Life Sentences) Are Registered Tax Return Preparers
The Treasury Inspector General for Tax Administration today released More Tax Return Preparers Are Filing Electronically, but Better Controls Are Needed to Ensure All Are Complying With the New Preparer Regulations (2012-40-010): While more tax return preparers are filing electronically, better controls are needed to ensure that all are complying with the new preparer regulations.…
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Flight Crew Meals Are Excludable From Income Under § 119, Not § 132(e)
ILM 2011-51-020 (Aug. 31, 2011): Taxpayer provides catered meals on its * * * planes for crew members to eat while they are performing their flight duties. The meals are prepared by an independent third party vendor at a facility on the ground. The facility is not owned, leased, or operated by the employer. The…
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IRS to Implement New 2% ‘Recapture Tax’ in Two-Month Payroll Tax Cut Extension
Payroll Tax Cut Temporarily Extended into 2012 (IR-2011-124): Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the…
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IRS Releases Revised Publication 17, Your Federal Income Tax
The IRS has released a revised edition of Publication 17, Your Federal Income Tax (303 pages), for use in preparing 2011 tax returns:
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Maule: Only Congress Can Exclude From Income Damages for Wrongful Imprisonment
Following up on last week's post, Taxation of Damages for Wrongful Imprisonment: Jim Maule (Villanova), Who Should Change the Tax Law?: As to the policy issue, namely should false imprisonment damages be subject to income taxation, there are good arguments on both sides. In some ways, those arguments reflect the ones advanced on both sides…
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Christmas Gifts for that Special Tax Person
Form 1040 Toilet Paper ($4.49 per roll): Does it pain you to fill out a tax form each year? Does knowing that the IRS takes a large chunk of your salary give you the runs? This product isn't deductible, but it'll sure make you feel better. A collage of the 1040 IRS Form is printed throughout…
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Western Union, IRS Settle $2 Billion Transfer Pricing Case
Western Union has settled a $2 billion transfer pricing case with the IRS for $220 million (in addition to a $250 million tax deposit made with the IRS in 2010 connected to the potential liability). Western Union Press Release Bloomberg Tax Trials Wall Street Journal
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IRS Hires SAS Analytics to Combat Tax Fraud
The IRS has signed a $6.25 million contract with the SAS Institute to use the company’s analytical software to help it identify tax evasion and fraud. Press Release Accounting Today (Hat Tip: Joshua Blank.)
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IRS Offers Tips for Year-End Charitable Giving
IRS Offers Tips for Year-End Giving (IR-2011-118) (Dec. 15, 2011): Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following: Special Charitable Contributions for Certain IRA Owners Rules for Clothing and Household Items Guidelines for…
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IRS Releases 2012 Standard Mileage Rates
The IRS today released (IR-2011-116) the standard mileage rates for 2012 (Notice 2012-1, 2012-1 I.R.B. ___ (Jan. 9, 2012)): Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be: 55.5 cents per mile for business miles driven [unchanged from 2011] 23 cents…
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IRS Selects Georgetown to Provide Tax CLE to Office of Chief Counsel
Georgetown announced today that it has been awarded a contract by the IRS to offer Continuing Legal Education (CLE) courses to the IRS Office of Chief Counsel: The Law Center will collaborate with Chief Counsel to develop and deliver distance learning CLE courses starting in 2012. … During the first year of the contract, Georgetown will provide…