Every year the IRS publishes a list of areas where the IRS will not issue a private letter ruling. Items on the list can provide a warning to taxpayers that the IRS may not agree with the conclusion that would be sought in the ‘no rule’ area. For 2020, the IRS added to the ‘no rule’ list or the ‘will not ordinarily be issued’ list: 1. Whether any portion of the items of income, deduction,…

The SECURE Act stole all of the end of year thunder regarding changes in federal taxes. However, other changes were enacted. One of these was the repeal of Code Section 4940(e). Code Section 4940 previously imposed a 2% excise tax on the investment income of private foundations. Section 4940(e) reduced that tax to 1% for foundations that increased their qualifying distributions over the average for the prior 5 years. So as to simplify this small…

Taxpayers who fail to file an FBAR to report a foreign account can escape penalty if they can show reasonable cause for the failure (if the failure to file was nonwillful). A recent district court case failed to allow for reasonable cause – click here for a condensed summary of the good and bad facts and the court’s conclusions. The case illustrates that the failure of a taxpayer to disclose the account on Schedule B…

Taxpayers often direct their IRA accounts to be paid into trust for beneficiaries at their death. This is often done to accomplish the usual benefits of trusts, including limiting beneficiary access to funds, protection of trust assets from creditors, and third party management over trust assets. If accomplished through properly drafted trusts, the trusts can allow for the payouts to be stretched out over the lifetime of the trust beneficiaries. Such stretching of distributions also…

On December 20, 2019, President Trump signed into law the Setting Every Up Community for Retirement Enhancement (SECURE) Act, which was incorporated into the Further Consolidated Appropriations Act. The SECURE Act makes significant changes to the tax rules applicable to qualified retirement plans and IRAs. Key changes include deferring of the commencement of required minimum distributions until age 72, and requiring payouts after the death of an account holder to be completed within 10 years…

For liability protection, the question regularly comes up who in the family should own the cars. Ask a number of lawyers and you are likely to get a number of different answers. Note that there are generally two (or more) people who can be liable when a negligently driven vehicle injures another person or another person’s property. The driver is going to be responsible for their own negligence. This is the primary liability, and is…

To view a PDF table and diagram of the current rates, click here. Interestingly, the mid-term rate has moved back up above the short-term rate. Thus, the yield curve inversion (a recession predictor) shows sign of ending.…