Welcome to checpas.com the CPA website of Claude Estes. Claude H. Estes + Company, P.C. Certified Public Accountants
Newsletters
Newsletters
Tax Alerts
May 7, 2016
Tax Briefing(s)
Previous item
Stop scrolling
Resume scrolling
Next item
IRS issues 2016 inflation-adjusted vehicle depreciation dollar limits
The IRS has released the inflation-adjusted limitations on depreciation deductions for business-use passenger automobiles, light trucks, and vans first placed in service during calendar year 2016. Whe...
IRS updates WOTC Form 8850, Instructions for PATH Act; provides June 30 extension
The IRS has updated Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Tax Credit (WOTC), and its Instructions, to reflect the Protecting Americans from Tax Hikes Act o...
IRS unveils cash payment option at participating 7-Eleven stores
The IRS announced that taxpayers now have the option to pay their income taxes in cash. The IRS has partnered with ACI Worldwide’s OfficialPayments.com and the PayNearMe Company to allow individ...
IRS, Treasury issue additional guidance to combat inversions
The Obama administration continued to take action to combat corporate inversions by issuing two sets of regulations that target inversions and earnings stripping. An inversion results in a U.S. parent...
IRS adds to list of designated private delivery services for “timely-filed, timely-mailed” rule
The IRS has updated its list of designated private delivery services (designated PDSs), effective April 11, 2016, that taxpayers may use to submit documents to the agency to qualify for the “tim...
April 18 filing deadline nears, IRS processing systems keeping up with high volume of returns
As the April 18, 2016 filing deadline quickly approaches, the IRS is processing millions of returns and issuing refunds that so far total over $175 billion. The agency reports it is on track to comple...
IRS prepares new exam process for large businesses in challenging audit environment
Starting May 1, 2016, the IRS will utilize a new exam process in its Large Business and International (LB&I) Division. The exam process is the outgrowth of a multi-year review and revamp of the di...
IRS removes Cuba from list of countries with foreign tax restrictions
The IRS has removed Cuba from the so-called “Code Sec. 901 blacklist” of foreign countries from which U.S. taxpayers may not be entitled to a foreign tax credit. Removal of Cuba from this ...
IRS releases 2016 adjusted foreign housing allowances; many locations remain high-cost areas
The IRS has issued the 2016 inflation adjustments to the foreign housing expenses limitation used for calculating the exclusion under Code Sec. 911(c) for tax years beginning on or after January 1, 20...
Supreme Court declines to review three tax shelter cases; lack of economic substance holding stand
The U.S. Supreme Court has declined to review three tax shelter cases, including two involving the Structured Trust Advantaged Repackaged Securities (STARS) tax shelter. The three cases are: Bank of N...
Ways & Means Chairman bullish on tax reform prospects
In a number of speeches throughout Washington during February, House Ways and Means Committee Chairman Kevin Brady, R-Tex, predicted that comprehensive tax reform will not take place until a new presi...
IRS issues 2016 auto and truck maximum FMVs for cents-per-mile/fleet-average valuation
The IRS has issued the maximum fair market value (FMV) amounts that trigger certain valuation rule for employers calculating fringe benefit income from employer-provided automobiles, trucks, and vans ...
IRS reminds taxpayers of ACA individual shared responsibility requirement, forms
The IRS has reminded taxpayers that the Affordable Care Act (ACA) requires individuals to carry minimum essential health insurance coverage or make a shared responsibility payment. This information is...
President signs bill increasing failure-to-file penalty
President Obama signed in February the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644). The comprehensive trade and customs bill includes an increase in the penalty for failure to file...
Audit rates drop for most individuals; up for top earners, partnerships and S corporations
The overall individual audit coverage rate continued its steady decline in recent years, the IRS reported. The audit coverage rate for total individual returns for fiscal year (FY) 2015 was 0.84 perce...
National Taxpayer Advocate identifies top 10 tax litigated issues
The IRS’s cutbacks in taxpayer services could erode voluntary compliance with the tax laws and lower tax revenues, National Taxpayer Advocate Nina Olson has told Congress in her annual report. O...
IRS withdraws proposed rules on optional reporting by charitable organizations
The IRS has withdrawn proposed regulations on optional reporting by charitable organizations. The proposed regulations had generated significant controversy over the collection of personal identificat...
IRS eases deadlines for foreign account reporting
The IRS provided relief to foreign financial institutions (FFIs) for complying with various reporting deadlines under the Foreign Account Tax Compliance Act (FATCA). FFIs, including FFIs operating und...
IRS provides penalty relief to educational institutions for missing TINs
The IRS has provided penalty relief to educational institutions that provide Form 1098-T, Tuition Statement, to students and the IRS for the 2015 calendar year, where the Form 1098-T is missing the st...
IRS determines exchange of property was like-kind exchange under Code Sec. 1031
The IRS has concluded that an exchange of aircraft was tax-free under Code Sec. 1031 because the aircraft were held for productive use in a trade or business, as required for a like-kind exchange unde...
AL - Taxpayers domicile outside Alabama established
A married couple were not subject to Alabama personal income tax for the 2012 tax year because they established that they had abandoned Alabama and established a new, permanent domicile in Korea when ...
FL - Bill redesignates bureau as division
Provisions of the Florida Unclaimed Property Law (UPL) have been amended to redesignate the office that oversees the law. The Bureau of Unclaimed Property is changed to the Division of Unclaimed Prope...
GA - DOR amends direct pay permit rule, seeks comments on proposed re-amendment
The Georgia Department of Revenue has amended sales and use tax Reg. §560-12-1-.16 ("Direct Pay Reporting"). Developing details concerning the amendment were previously reported. As amended, the ...
OH - Appeal dismissed for failure to address unreasonableness of rule
For Ohio property tax purposes, taxpayers’ appeal for relief from administrative journal entries regarding the current agricultural use valuation (CAUV) process issued by the tax commissioner wa...
IRS issues 2016 inflation-adjusted vehicle depreciation dollar limits
The IRS has released the inflation-adjusted limitations on depreciation deductions for business-use passenger automobiles, light trucks, and vans first placed in service during calendar year 2016. Whe...
IRS updates WOTC Form 8850, Instructions for PATH Act; provides June 30 extension
The IRS has updated Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Tax Credit (WOTC), and its Instructions, to reflect the Protecting Americans from Tax Hikes Act o...
IRS unveils cash payment option at participating 7-Eleven stores
The IRS announced that taxpayers now have the option to pay their income taxes in cash. The IRS has partnered with ACI Worldwide’s OfficialPayments.com and the PayNearMe Company to allow individ...
IRS, Treasury issue additional guidance to combat inversions
The Obama administration continued to take action to combat corporate inversions by issuing two sets of regulations that target inversions and earnings stripping. An inversion results in a U.S. parent...
IRS adds to list of designated private delivery services for “timely-filed, timely-mailed” rule
The IRS has updated its list of designated private delivery services (designated PDSs), effective April 11, 2016, that taxpayers may use to submit documents to the agency to qualify for the “tim...
April 18 filing deadline nears, IRS processing systems keeping up with high volume of returns
As the April 18, 2016 filing deadline quickly approaches, the IRS is processing millions of returns and issuing refunds that so far total over $175 billion. The agency reports it is on track to comple...
IRS prepares new exam process for large businesses in challenging audit environment
Starting May 1, 2016, the IRS will utilize a new exam process in its Large Business and International (LB&I) Division. The exam process is the outgrowth of a multi-year review and revamp of the di...
IRS removes Cuba from list of countries with foreign tax restrictions
The IRS has removed Cuba from the so-called “Code Sec. 901 blacklist” of foreign countries from which U.S. taxpayers may not be entitled to a foreign tax credit. Removal of Cuba from this ...
IRS releases 2016 adjusted foreign housing allowances; many locations remain high-cost areas
The IRS has issued the 2016 inflation adjustments to the foreign housing expenses limitation used for calculating the exclusion under Code Sec. 911(c) for tax years beginning on or after January 1, 20...
Supreme Court declines to review three tax shelter cases; lack of economic substance holding stand
The U.S. Supreme Court has declined to review three tax shelter cases, including two involving the Structured Trust Advantaged Repackaged Securities (STARS) tax shelter. The three cases are: Bank of N...
Ways & Means Chairman bullish on tax reform prospects
In a number of speeches throughout Washington during February, House Ways and Means Committee Chairman Kevin Brady, R-Tex, predicted that comprehensive tax reform will not take place until a new presi...
IRS issues 2016 auto and truck maximum FMVs for cents-per-mile/fleet-average valuation
The IRS has issued the maximum fair market value (FMV) amounts that trigger certain valuation rule for employers calculating fringe benefit income from employer-provided automobiles, trucks, and vans ...
IRS reminds taxpayers of ACA individual shared responsibility requirement, forms
The IRS has reminded taxpayers that the Affordable Care Act (ACA) requires individuals to carry minimum essential health insurance coverage or make a shared responsibility payment. This information is...
President signs bill increasing failure-to-file penalty
President Obama signed in February the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644). The comprehensive trade and customs bill includes an increase in the penalty for failure to file...
Audit rates drop for most individuals; up for top earners, partnerships and S corporations
The overall individual audit coverage rate continued its steady decline in recent years, the IRS reported. The audit coverage rate for total individual returns for fiscal year (FY) 2015 was 0.84 perce...
National Taxpayer Advocate identifies top 10 tax litigated issues
The IRS’s cutbacks in taxpayer services could erode voluntary compliance with the tax laws and lower tax revenues, National Taxpayer Advocate Nina Olson has told Congress in her annual report. O...
IRS withdraws proposed rules on optional reporting by charitable organizations
The IRS has withdrawn proposed regulations on optional reporting by charitable organizations. The proposed regulations had generated significant controversy over the collection of personal identificat...
IRS eases deadlines for foreign account reporting
The IRS provided relief to foreign financial institutions (FFIs) for complying with various reporting deadlines under the Foreign Account Tax Compliance Act (FATCA). FFIs, including FFIs operating und...
IRS provides penalty relief to educational institutions for missing TINs
The IRS has provided penalty relief to educational institutions that provide Form 1098-T, Tuition Statement, to students and the IRS for the 2015 calendar year, where the Form 1098-T is missing the st...
IRS determines exchange of property was like-kind exchange under Code Sec. 1031
The IRS has concluded that an exchange of aircraft was tax-free under Code Sec. 1031 because the aircraft were held for productive use in a trade or business, as required for a like-kind exchange unde...
AL - Taxpayers domicile outside Alabama established
A married couple were not subject to Alabama personal income tax for the 2012 tax year because they established that they had abandoned Alabama and established a new, permanent domicile in Korea when ...
FL - Bill redesignates bureau as division
Provisions of the Florida Unclaimed Property Law (UPL) have been amended to redesignate the office that oversees the law. The Bureau of Unclaimed Property is changed to the Division of Unclaimed Prope...
GA - DOR amends direct pay permit rule, seeks comments on proposed re-amendment
The Georgia Department of Revenue has amended sales and use tax Reg. §560-12-1-.16 ("Direct Pay Reporting"). Developing details concerning the amendment were previously reported. As amended, the ...
OH - Appeal dismissed for failure to address unreasonableness of rule
For Ohio property tax purposes, taxpayers’ appeal for relief from administrative journal entries regarding the current agricultural use valuation (CAUV) process issued by the tax commissioner wa...

The 2016 filing season has closed with renewed emphasis on cybersecurity, tax-related identity theft and customer service. Despite nearly constant attack by cybercriminals, the IRS reported that taxpayer information remains secure. The agency also continued to intercept thousands of bogus returns and prevent the issuance of fraudulent refunds.


Passage of the “Tax Extenders” undeniably provided one of the major headlines – and tax benefits – to come out of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law on December 18, 2015. Although these tax extenders (over 50 of them in all) were largely made retroactive to January 1, 2015, valuable enhancements to some of these tax benefits were not made retroactive. Rather, these enhancements were made effective only starting January 1, 2016. As a result, individuals and businesses alike should treat these enhancements as brand-new tax breaks, taking a close look at whether one or several of them may apply. Here’s a list to consider as 2016 tax planning gets underway now that tax filing-season has ended.


The IRS has issued its annual Data Book for fiscal year (FY) 2015, which provides statistical information on activities such as examinations and collections conducted by the IRS from October 1, 2014 to September 30, 2015. For FY 2015, the Data Book shows the total number of audits conducted by the IRS was 1.37 million, down from the 1.38 million examined in FY 2014.


Individual taxpayers may claim a nonrefundable personal tax credit for qualified residential alternative energy expenditures. The residential alternative energy credit generally is equal to 30 percent of the cost of eligible solar water heaters, solar electricity equipment, fuel cell plants, small wind energy property, and geothermal heat pump property. After 2016, the credit is available only for qualified solar electric property and qualified solar water heating property placed in service before 2022.


Social media has helped to make our world smaller and when natural disasters and tragedies occur we want to help with contributions of money and/or other types of aid. At home, countless charitable organizations are providing all types of help and generally, your contributions to U.S. charities are tax-deductible. Contributions to foreign charities generally are not tax-deductible; however, special rules apply to charitable organizations in Canada, Israel and Mexico.


As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of May 2016.

Tax Alerts
Tax Briefing(s)

As lawmakers return to work after their August recess, Hurricane Harvey has increased expectations on Congress to quickly pass disaster-relief tax breaks. September is also expected to bring Congressional hearings on tax reform and possibly the unveiling of tax reform legislation. At the same time, lawmakers must address the federal government’s budget, including the IRS.


Parents incur a variety of expenses associated with children. As a general rule, personal expenditures are not deductible. However, there are several deductions and credits that help defray some of the costs associated with raising children, including some costs related to education. Some of the most common deductions and credits related to minors are the dependency exemption, the child tax credit, and the dependent care credit. Also not to be overlooked are tax-sheltered savings plans used for education, such as the Coverdell Education Savings Accounts (ESAs).


Two recent court cases indicate that, although use of a conservation easement to gain a charitable deduction must continue to be arranged with care, some flexibility in determining ultimate deductibility may be beginning to be easier to come by. The IRS had been winning a string of cases that affirmed its strict interpretation of Internal Revenue Code Section 170 on conservation easement. The two latest judicial opinions, however, help give taxpayers some much-needed leeway in proving that the rules were followed, keeping in mind that Congress wanted to encourage conservation easements rather than have its rules interpreted so strictly that they thwart that purpose.


A partnership is created when persons join together with the intent to conduct unincorporated venture and share profits. Intent is determined from facts and circumstances, including the division of profits and losses, the ownership of capital, the conduct of parties, and whether a written agreement exists. Despite such nuances in the process, however, distinguishing the existence of a partnership from other joint investments or ventures is often critical in determining tax liability and reporting obligations.


Gross income is taxed to the individual who earns it or to owner of property that generates the income. Under the so-called “assignment of income doctrine,” a taxpayer may not avoid tax by assigning the right to income to another.


As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of September 2017.