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March 26, 1999

House and Senate Approve GOP Budget Plans - Actual Bills to be Written Later - Weighted Average Interest Rates Announced for March - Called on the Carpet, IRS Must Show Cause Why It Denied a Tax Exemption to a Charitable Fund - Simplot Decision Out - Estate Taxes Owed, But Not as Much as the IRS Wanted - And No Penalties

March 19, 1999

Second Quarter 1999 Interests Rates on Overpayment and Underpayments Go Up - Interest Netting Provision Guidance Issued - Pre-Petition Tax Seizures May Not be Preferential Transfers in Bankruptcy Court - Applicable Federal Rates for April Announced - Roth IRA Form Supplemental Instructions Available - Gain from Stock Redemption Incident to Divorce Not Recognized

March 12, 1999

Budget and Tax Battle Continues to Rage in Congress - TAM Says Lottery Winnings Payable Over Time are All Included in Estate at Present Value Under IRS Actuarial Tables - Interest Earned on Lawyer IOLTA Accounts is Not Taxable to Either Lawyer, Law Firm or Client - 82% Interest in Closely Held Corporation in a Decedent's Estate Gets Marketability and Environmental Discount But Also Gets Hit With Control Premium

March 5, 1999

March AFRs Announced - TAM says Shareholders of an S Corporation May Deduct Charitable Contributions Made by the S Corporation, Not When the Accrual Basis Corporation Accrued the Deduction, But Only When Actually Paid - Mountain State Truck Decision says LIFO Not Acceptable on That Case's Facts - 1993 Religious Freedom Restoration Act Does Not Exempt Anyone From Payment of Income Taxes

February 19, 1999

Tenth Circuit Reverses the Tax Court and Imposes Phantom Forgiveness of Debt Income on Couple Who Settled with the FDIC at a Discount

February 12, 1999

Archer, Rangel and Klezcka Set Sites on Charitable Split-Dollar Insurance Plans - Broad Ten Percent Tax Cut in Trouble but Scattered Tax Cuts Likely - Discounts for Built-In Capital Gains and Lack of Marketability Allowed in Estate of 96% Shareholder - Uncertainty Introduced into Exempt Organization Fundraising with UCC Decision

February 5, 1999

Automobile Depreciation Limits for 1999 Set - IRS Reverses Non-acquiescense on 1987 Larotondo case and 1998 Murillo Case - Gingrich was Right and His Critics Were Wrong on College Course - Gift and Estate Tax Proposals in Clinton's Proposed Budget - Annuity Proposals Dead on Arrival - Index of the Rest of the Budget

January 29, 1999

Major Breakthrough Decision on Family Limited Partnerships - Partnership Interests Owned by Decedent May Only be Assignee's Rights in Hands of Heirs and are Valued Accordingly - Even Though Interests in Separate Trusts are Both Includable in Estate There is No Aggregation of Interests but Interests are Valued Separately for Minority Discount and Other Purposes - IRS Acquiesces in Irene Eisenberg Decision - January Qualified Plan Full Funding Rates Announced - A Trust Will not Qualify as a Marital Deduction QTIP Trust if it is Ambiguous on Key Terms - Stock Transfers in Controlled Corporation to Trusts are Not Includable in Estate Even Though Transferor is Co-Trustee As Long as Transferor Retains No Rights to Vote the Stock - Estate that Borrows Money over Long Term to Pay Estate Taxes May Be Entitled to Claim Interests as Administration Expense if the Loan is Necessarily Incurred in teh Administration of the Estate

January 22, 1999

Republicans and Democrats set for budget surplus fight - Revenue Procedure sets method for correcting 403(b) plan failures - Taxpayer Rights and IRS regulations on hearings before levy - Regulations issued on notification of lien filings - Credit cards accepted for tax payments - Applicable federal rates for February - Daily transportation expenses may be deductible - Earnest money becomes income when right to retain becomes fixed

January 15, 1999

New Congress starts, as usual, with new tax proposals – No deductions allowed corporation for interest paid on company owned life insurance (COLI) – IRS offers extended Saturday service – IRS issues temporary and proposed regulations on how to treat timely mailing as timely filing – Revenue Ruling on conversion of single member LLCs to partnerships – Revenue Ruling on termination of LLCs partnership status – Bankruptcy Court holds partnership liquidating distributions are not taxable

January 8, 1999

Auto Mileage Rate Remains at 32.5 cents until April 1 - Developer's Property Taxes Must be Capitalized - Nonstatutory Stock Options May be Deducted When Exercised if Stock Does Not Have Ascertainable Fair Market Value at Issuance - Corporate Acquisition of Tax Losses May be Cut - OMB Forecasts $76 Billion Surplus for 1999 - Pope & Talbot Decision Affirmed - Fees Paid to a Guarantor Not Deductible in Certain Cases - Partial Exchange of Annuity Contract Held Nontaxable - IRS Encourages Employers to Facilitate Direct Deposits to IRAs - IRS Finally Issues Regulations on Repeal of General Utilities Doctrine - IRS Announces 1999 Social Security Contribution and Benefit Base

December 23, 1998

Proposed Regulations on Adequate Disclosure for Gift Tax Returns - Applicable Federal Rates for January 1999 - Section 2703 and Family Limited Partnerships

December 18, 1998

Same Sex Domestic Partner is Not a Spouse, but May be a Dependent - Credit Cards and Debit Cards OK'd as Means to Pay Certain Taxes - Proposed Regulations on Effect of Administration Expenses on Marital and Charitable Deductions in Estates - 1999 Standard Mileage Rates Announced

December 11, 1998

Legally Enforceable Claim to Assets can Cause Assets to be Included in Decedent's Gross Estate - IRS Issues Notice on Equitable Innocent Spouse Relief - Section 2032A Special Valuation in Estate Lost When Development Rights Sold - Interest Rates Down for First Quarter of 1999

December 4, 1998

Republicans say Next Year Will Bring Social Security Reform and Tax Relief While Democrats Call for Social Security Relief and More Spending on Childcare - Do We Need Social Security Reform at All? Or What Kind? - Split-Dollar with Life Insurance Held by Trust Funded by Corporation Going into QTIP Trust is Ruled OK

November 25, 1998

Appraisal Required to Take Charitable Deduction - Two TAMs on Charitable Issues - Full Funding Limitations for November Announced - Third in Series on Section 2703 and Family Limited Partnerships

November 20, 1998

Cost of Living Adjustments for 1999 Announced - Conditional Alternative Valuation Election for an Estate was Effective - Widow's Election Includes Portion of Income From Estate - FICA Wage Base Increases - No Apportionment means Marital Portion of Estate Residue Must Pay Tax - Applicable Federal Rates for December Announced - Second in a Series on Section 2703 and Family Limited Partnerships

November 13, 1998

IRS announces that 250 offices will be open Saturdays during the 1999 tax season - Earned Income Credit rules changed - Beginning of a series on Section 2703 and Family Limited Partnerships

November 6, 1998

IRS must first determine each individual employee’s tip income before tagging the employer for tip-related FICA liability – October full funding limitation rates announced – Annual exclusion does not apply where gift is to a corporation rather than the individual shareholders – IRS updates procedures for late S corporation elections – Retiree does not have standing to sue (collectively bargained plan) – Ways & Means schedules hearing on Social Security

October 30, 1998

Soil and Water Conservation Expenditures are not deductible if the land is located outside of the United States and the District of Columbia - Mere fact that the estate is not an affiliate for securities laws purposes while the decedent was (which affects restrictions on the shares under Rue 144 of the Securities Act of 1933) will not change the value - If a Tax Matters Partner is under criminal investigation, the TMP does not have authority to bind the partnership and the partners with tax decisions - The Tax Court cannot order a refund until a case before it is finally decided - A court must first determine whether "employees" are common law employees before deciding if they get benefits - DC Circuit is the place for litigation where one of the taxpayers is a non-resident - Attorney and Insurance professionals not liable for taxes paid in failed insurance trust - Applications for refunds on farm property special use valuations allowed - Cola adjustments for pension plans announced - AFRs for November announced - Interim rules on Roth Reconversions announced - Estate entitled to a charitable deduction for a foreign trust - Assets transferred to a limited partnership days before death will be included in the estate

October 16, 1998

Budget Deal Include New Tax Provisions – IRS to Discontinue form 1040PC – For Valuation Purposes and Section 2703, Step-Children are Family Members

October 9, 1998

The Taxpayer Relief Act of 1998 is almost dead and an alternative extenders act being proposed - The IRS has announced that it will allow taxpayers to file an amended tax return for 1997 or claim losses on their 1998 returns for damages done by Hurricane Georges - Brookshire Estate Tax Valuation Case finds 40% lack of marketability discount - The Bankruptcy Reform Act of 1998 has primarily assert the rights of governments as creditors

October 2, 1998

Taxpayer Relief Act of 1998 has Uncertain Future - New Temporary Regulations Issued on Automobile Expense Substantiation - Estate Tax Return Form to be Revised and Public Comments Invited

September 25, 1998

Applicable Rates for October - Charge to Terminate a Lease Financed over Term of New Lease Must be Capitalized - $80 Billion Tax Cut Bill to Hit House Floor Saturday September 26 and Clinton Threatens a Veto - IRS Publishes a New Mission Statement - Estate Tax Charitable Deduction Denied for Trust with Split Interests

September 18, 1998

Taxpayer Relief Act of 1998 Passed by House Ways and Means – Critics say the Act Depends Upon surplus That is Not Real – Twelve IRS Officials Disciplined – Agricultural Use Valuation Lost to Estate For Lack of Proper Backup Information – Americans United Trying to Scare Churches

September 11, 1998

Congress ready to take up budget and tax legislation again - IRS publishes rules on how to make the election to defer gain on the sale of qualified small business corporation stock

September 4, 1998

IRS concedes that an estate may use both the minority discount and the special use valuation rules under Section 2032A – Three year contemplation of death rule and incidents of ownership rule bring life insurance back into estate even though policy owned and paid to trust – Community property life insurance payable to estate is fully includable in estate

August 28, 1998

When a non-spouse disclaims an intestate inheritance causing a surviving spouse of the decedent to inherit, the estate can claim a marital deduction - If an injury settlement follows a judgment in which pre-judgment interest is granted, part of the settlement may be taxable interest, notwithstanding recitals to the contrary – Probate disclaimers are transfers subject to federal tax lien in new case which creates a conflict in the circuits with other contrary decisions most recently in the 5th Circuit – IRS published final QTIP regulations

August 21, 1998

Major Decision – Value of C Corporation Stock can be Reduced for Built-in Capital Gains When Gifts are Made – Value Under Stock Redemption Agreement with Non-Family Member and Business Purpose Binds IRS – Statute of Limitation in State Fraudulent Conveyance Statute does not bind IRS in Transferee Liability Situation – Rollover Rules Limited to U.S. IRAs so that Canadian RRSP Can’t Roll Into U.S. IRA – The Taxes of A Sole Shareholder are not the Liability of the Corporation Because there is No Such Thing as Reverse Veil Piercing

August 14, 1998

Credit Union Membership Access Act signed by Clinton - Field Service Advice Memorandums to be Made Public - Real Estate Business Allows Estate Tax in Installments - IRS Names Taxpayer Advocate - Exempt Organizations CPE Text Published - Proceeds from an ERISA Settlement are Taxable - Business versus Hobby: Inability to Profit is Not Fatal - Loan Violating Imprudent Loan Rule does Not Disqualify Pension Plan

August 7, 1998

Qualified Non-recourse Financing Regulations under Section 465 – Private Foundation Self-dealing Does not Include Acquisition of an Interest in the Donor’s Limited Partnership – Lorvic Holdings Case Decided that Non-competition and Secrecy Agreements Have Value and are Amortizable – Reimbursement Request a Prerequisite to Employee Expense Deduction – Partnership Imputed by Tax Court to Allow Deductions – Proposed Revenue Procedure on Accounting Method Changes Draws Significant Fire

July 31, 1998

Capital Gains Tax Cut Bill Introduced into Senate – Accounting Firm Goodwill Belongs to Individual Accountants – Must Fully Pay Taxes to Sue for a Refund – Senate Debate on Budget Terminated – 501(c)(3) Hospital Loses Status Over Sale of Assets to Board members – Credit Union Membership Access Act Passes Senate – Checks Paid After Death Were Not Completed Lifetime Gifts and Are Included in Estate – Tax Foundation Says Federal Tax Burden Grows by 3.6 percent

July 24, 1998

IRS Reform Bill Signed by President Clinton - Clinton Vetoes Coverdell Education Bill - Senate to Consider Budget - Deduction of Country Club Fee Allowed - AFRs for August - Non-Gambling Income Can't be Offset with Gambling Losses - California Estate Tax Judgment and Lien Inferior to Federal Lien - FULL PAYMENT Notation Does Not Bind the IRS - To Determine Fraud Penalty Underpayment is Reduced by Deductions after the Return is Filed

July 17, 1998

Budget Cuts and Tax Cuts are a Near Certainty - "Stunning Confession" as IRS Audits Itself - Deductibility Delayed on Stock Contributed to Charity Subject to Option - QSST Beneficiaries Not Always Taxed on Trust Activities - Expansion of MSAs a Significant Possibility - Extenders will be Extended says Archer - Credit Union Bill up for a Vote

July 10, 1998

Interest on Personal Income Tax Obligation Nondeductible - Sponsors of Employee Plan Broke Law by Failing to Give Adequate Warning About Adverse Income Tax Consequences But Participants Have No Remedy - IRS Reform Bill Passes Senate

July 3, 1998

Divorce Trust Assets Includable in Deceased Ex-Husband's Estate But Claim Deduction Allowed - No Deduction Allowed for Conservation Expenditures on Land Outside the US - Securities Laws Affiliate Status Taken Into Account in Valuing Decedent's Stock Even Though Estate was a Non-Affiliate - Valuation in Estate of Minority Block of Closely Held Stock Includes Adjustment for Built-In Capital Gain - JCT Lists Expiring Tax Provisions

June 26, 1998

Much Tax Reform in IRS Reform Bill - Capital Gains Tax Holding Period Shortened - Meals Furnished to Employees - Line Item Veto Gone - Democrats Introduce Pension Reform Bill - New Internet Tax Freedom Act Approved by House - Unitrust Unaffected by Purchase of Annuity Policies

June 19, 1998

House Approves Education Tax Bill - June 30 Deadline for Gifts to Private Foundations - IRS Reform Bill Stuck - Senate Unplugs Tobacco Bill - Possible Lapse of Power of Appointment Kills Marital Deduction - July Applicable Federal Rates - Gingrich Predicts $60 Billion to $70 Billion Tax Cut - Sun May Set on Code

June 12, 1998

Phil Gramm's Marriage Tax Amendment - Education Tax Break Conferees Finish Work - Kasich Budget Advances - GOP to Lott Get with the Program - Bankruptcy Reform Act Reverses Twenty Years of Law - Transfers Includable in Gross Estate - Taxpayer Not Entitled to Loss on Sale Where Will Directed Sale of Property

May 29, 1998

Estate Discounts through stacking of Family Limited Partnerships and other entities - 1980s Straddle Losses Not Deductible if Tax Motivated - Budget Surplus - AFRs for June

May 15, 1998

Joint Tenancy Gets No Valuation Discount - Estate and Gift Tax Rate Reduction Act - Court Holding Co. Doctrine - Internet Tax Freedom Act - Tobacco Bill - Self-Employed Health Insurance

May 8, 1998

Pension Reform - National Sales Tax Criticized - Education Reform - Like-Kind & Partnership - QTIP - IRS Reform - New Bills - Capitalize Legal Fees - Note Becomes Basis - Charitable Deduction

May 1, 1998

Variable Annuity and COLI TAM blasted - Roth proposal on CID - Conservative Budget - Gingrich say Cut Capital Gains Tax - Discounts sustained in Tax Court case

April 24, 1998

Senate Action on Education Tax Reform and IRS Restructuring - Tax Limit Amendment - S Corp Regs - AFRs for May - Small Corp Stock Gain Exclusion

April 17, 1998

Tax Freedom Day - Schedule D overlooked by 1 million - Stock Options Valuation - Gift of Option - IRS Reform Bill

April 9, 1998

IRS pays taxpayer's attorneys fees - Car depreciation limits - Capital gain simplification - Pension plan distributions - Workers legally excluded from pension

March 28, 1998

Family Limited Partnership Rulings - Second to Die Policy Not Includable in Estate - Renunciation of Trust Interest is Gift - AFRs for April - McLendon Valuation Case 5th Circuit

February 14, 1998

Critics of Annuity Proposals - Court Case on Denial of Estate Tax Charitable Deduction - Proposal to Eliminate 18 Month Capital Gains Holding Period - Education Tax Relief Bill - Clinton's Proposals