Tax Headlines

1827

Genuine Issues of Material Fact Existed Regarding Whether Foreign Trust Owner’s Failure to File Annual Returns Was Due to Reasonable Cause (James, DC Fla.)

A genuine issue of material fact existed with respect to penalties assessed against a foreign trust owner for his failure to file Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Questions remained regarding whether the individual’s accountant advised him not to file the return and whether the individual reasonably relied upon such advice.

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Pennsylvania ~ Sales and Use Tax: Appeal Denied in Online Travel Company Case

The Pennsylvania Supreme Court has denied a petition for allowance of appeal in a case in which the Commonwealth Court held that an online travel company (OTC) was not liable for Philadelphia hotel tax on the difference between the room rates it contracted with hotels and the rates, including fees, it charged its customers for rooms because the OTC was not an “operator” under the ordinance ( TAXDAY, 2012/02/03, S.26 ).

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Hawaii ~ Sales and Use Tax: Transition Period Allowed for Local Contact, Information Reporting for Transient Accommodations

The Hawaii Department of Taxation announced that it will provide a six-month transition period to allow taxpayers to meet the transient accommodations tax requirements relating to local contacts and information reporting enacted by Act 326 (H.B. 2078), Laws 2012. As previously reported, Act 326 enacts a transient accommodations tax provision that requires the designation of a local contact for each transient accommodation, requires local contact information to be provided to certain nongovernmental entities, requires certain relevant information regarding transient accommodations operators to be provided to the department, provides for penalties, and requires the display of transient accommodation registration identification numbers on certain websites. (TAXDAY, 2012/07/16, S.12 ) Act 326 is effective July 1, 2012, and repealed on December 31, 2015.

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California ~ Sales and Use Tax: Click-Through and Affiliate Nexus Provisions Operative September 15

California Director of Finance Ana Matosantos has certified that federal law authorizing states to require a seller to collect sales or use taxes on the sales of goods or services to in-state purchasers without regard to the location of the seller was not enacted by July 31, 2012, the deadline specified in Ch. 313 (A.B. 155), Laws 2011.

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CCH Weekly Report from Washington, D.C.

The president signed a measure on August 10 that shifts the timing of corporation estimated tax payments in 2017 for corporations with $1 billion or more in assets. Meanwhile, during the week of August 13, the IRS issued the September applicable federal rates (AFRs), as well as guidance on the 25-year average segment rates that are applied to adjust the otherwise applicable 24-month average segment rates that are used to compute the funding target and other items under Code Sec. 430 and section 303 of the Employment Retirement Income Security Act of 1974 (ERISA).

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IRS Eliminates Tiered Issue Program in Favor of Knowledge Management Network (LB&I-4-0812-010)

In internal guidance to employees, the IRS LB&I Division announced that it will no longer manage issues through the Tiered Issue Process. In place of the Tiered Issue Process, LB&I is developing a knowledge management network through the use of Issue Practice Groups (IPGs) for domestic issues and International Practice Networks (IPNs) for international issues.

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Illinois ~ Insurance Tax: Surplus Line Producers Requirements Amended, Other Changes Made

Illinois legislation amends the requirements for licensed surplus line producers concerning the procurement of surplus line insurance. The bill deletes certain provisions concerning surplus line producer licensure and provides instead that Illinois will participate in the national insurance producer database of the National Association of Insurance Commissioners (NAIC), or any other equivalent uniform national database, for the licensure of surplus line producers and the renewal of such licenses. For purposes of the federal Nonadmitted and Reinsurance Reform Act of 2010, a domestic surplus line insurer will be considered a nonadmitted insurer, as the term is defined in the Act, with respect to risks insured in Illinois.

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