Tax Headlines


IRS Chief Counsel Calls for Certainty for Tax Extenders

IRS Chief Counsel William J. Wilkins called the fate of the tax extenders critical for tax administration after 2012. Many popular but temporary tax incentives expired at the end of 2011 and it is unclear if they will be renewed. Wilkins, who spoke at the Tax Executives Institute, Inc. (TEI) 62nd Mid-Year Conference in Washington, D.C., on March 27, also said it is premature to predict when the Service may finalize guidance on capitalization of costs relating to tangible property.

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Filing, Payment Deadlines Extended for Storm, Flooding, Mudslide and Landslide Victims in West Virginia (WVA-2012-2)

The IRS has extended return-filing and payment deadlines for victims of severe storms, flooding, mudslides and landslides that started on March 15, 2012, in parts of West Virginia, resulting in Logan County being declared a federal disaster area. Certain deadlines falling on or after March 15, 2012, and on or before May 31, 2012, have been postponed to May 31, 2012.

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New Hampshire ~ Miscellaneous Tax: Transfer of Ownership Interest to Single-Purpose Entity Not Taxable

The New Hampshire Supreme Court ruled that the transfer of an ownership interest in a real estate holding company to a single-purpose bankruptcy remote entity for the purpose of obtaining a mortgage loan was not subject to real estate transfer tax because it was not a contractual transfer within the meaning of the applicable statute. A contractual transfer is a bargained-for exchange of all transfers of real estate or an interest therein.

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Tax Court Lacked Jurisdiction to Review FPAA Issued to Interim Partnership (Rawls Trading, LP, TC)

Tax Court jurisdiction did not exist over an interim partnership proceeding involving an individual who pursued a tax shelter strategy with a tiered partnership structure, in which two lower level (“source”) partnerships engaged in activities designed to fabricate capital losses through overstatement of bases in partnership interests. These overstated bases flowed through to the higher level (“interim”) partnership, which owned the source partnerships, and then, through other pass-through entities, to the taxpayer.

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South Carolina ~ Sales and Use Tax: Software Delivered Electronically at Customer’s Location Not Taxable

The South Carolina Department of Revenue has issued a sales and use tax ruling clarifying that the sale of software delivered electronically via the Internet or wireless network from a connection between the seller’s laptop and the buyer’s computer at the buyer’s location is not taxable so long as no part of the software, such as back-up tapes, diskettes, or flash drives, is delivered by tangible means. Software delivered electronically does not fall within the definition of tangible personal property or within the scope of the statutory provisions taxing communications services. However, the department advises that charges by an application service provider (ASP) to a customer for access to software on its website are taxable.

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Mississippi ~ Miscellaneous Tax: Waste Management Assessment Upheld

A contractor was correctly assessed a Mississippi commercial nonhazardous solid waste management fee of $1.00 per ton because (1) the contractor’s work sites met the statutory definition of commercial nonhazardous solid waste management facilities; (2) the Mississippi Department of Revenue’s (formerly, the Mississippi State Tax Commission) treatment of similarly-situated waste management facilities was not unequal, and, therefore, the contractor’s constitutional rights were not violated; and (3) the evidence demonstrated that the contractor was the operator of the work sites and was liable for the entire assessment.

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