Tax Headlines


Portion of Compensation Paid to Owner-Employees Not Reasonable; Excise Tax Applied to Nondeductible Pension Plan Contributions; Accuracy-Related Penalty Not Imposed to Extent Owner-Employees Relied on Accountant’s Advice (Thousand Oaks Residential Care Home I, Inc., TCM)

The compensation packages paid to a corporation’s owner-employers were unreasonable, and, therefore, not deductible under Code Sec. 162 to the extent that they left insufficient assets to provide a reasonable return on the owners’ investment upon the sale of the corporation.

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IRS Intends to Issue Final Regulations in 2013 on 3.8-Percent Tax on Net Investment Income, IRS Officials Say

The IRS intends to issue final regulations in 2013 on the 3.8-percent tax on net investment income (NIIT), IRS officials told practitioners on January 14. IRS attorneys David Kirk and Adrienne Mikolashek of the Associate Chief Counsel (Passthroughs and Special Industries) discussed the tax at a BNA Bloomberg Tax Management luncheon, held at the offices of Buchanan Ingersoll & Rooney PC, and hosted by Don Reynolds of the firm. Michael Grace, J.D., Milbank, Tweed, Hadley & McCloy LLP, moderated the discussion.

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CCH Weekly Report from Washington, D.C.

In a quiet week at the White House and Congress, President Obama nominated Jack Lew to be Treasury Secretary and Senate Republicans named new members of the Senate Finance Committee. The IRS, meanwhile, released the official 2013 tax rate tables, along with some inflation-adjusted items, and the corporate bond weighted average interest rate and announced that the 2013 filing season would begin for some taxpayers on January 30.

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