Federal Tax Update with Lynn Nichols #40

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Lynn Nichols Federal Tax Update Podcast

May, 22 2019, Episode 40

Listen as Lynn Nichols provides commentary on 7 Items pertaining to current developments in U.S. tax law.

  1. Court Affirms Discharge of Accrued Interest on Student Loan Debt

A U.S. district court affirmed a bankruptcy court decision that held that requiring a debtor to pay the accrued interest on her student loan debt would create an undue hardship and the interest should be discharged, holding that there was no error in the court’s finding that she would not be able to repay the loan and could eventually suffer significant tax consequences.

[Educational Credit Management Corp. v. Vicky Jo Metz; USDC KS, No. 6:18-cv-01281; 5/2/2019]

  1. IRS Rules Stock Repurchase Rules Doesn’t Ruin S Corp Status

The IRS ruled that an S corporation’s agreement allowing the business to repurchase the company’s stock if a stockholder is terminated would not be considered in determining whether the corporation’s shares of stock confer identical rights to shareholders.

[LTR 201918013, 11/16/2018. Rel., 5/3/2019]

  1. Eleventh Circuit Affirms Denial of S Corp Shareholder’s Losses

The Eleventh Circuit affirmed a Tax Court decision that upheld the IRS’s reduction of an S corporation shareholder’s losses because he didn’t establish a bona fide indebtedness that ran directly to him, finding that his back-to-back loan and incorporated pocketbook arguments didn’t show a bona fide debt through other entities in which he held interests.

[Homero F. Meruelo; No. 18-1190, 5/6/2019]

  1. My Boss Told Me Not to Pay' Rejected in Trust Fund Penalty Case

The Eleventh Circuit affirmed that an individual who was CFO and president of two companies was liable for trust fund recovery penalties for failing to pay the companies’ trust fund taxes, rejecting his “my-boss-told-me-not-to-pay” argument and holding that the argument doesn’t work even when a government agency receiver told him not to pay the taxes.

[Steven J. Myers v. United States; No. 18-11403, 5/7/2019]

  1. IRS Reveals Focus of Upcoming Benefit Plan Audits

The IRS expects to roll out new audits of several employee benefit plans this summer, including tax-sheltered annuity, tax-exempt deferred compensation, and employee stock ownership plans, according to an official.

[Tax Notes Today, 5/9/2019. Article by Stephanie Cumings]

  1. IRS Provides 2019 Maximum Value of Employer-Provided Vehicles

The IRS has announced (Notice 2019-34) the maximum value of employer-provided vehicles first made available to employees for personal use in 2019 for which the vehicle cents-per-mile valuation or the fleet-average valuation rules may apply. For use with either rule, the maximum value is $50,400.

[Notice 2019-34; 2019-22 IRB 1, 5/8/2019]

  1. IRS Ruling Addresses Terminated S Corp Stock Redemption

The IRS has ruled on the tax treatment of a stock redemption by a terminated S corporation, saying that specific accounts must be offset by the amount of the proceeds, with any remainder treated as a dividend.

[Tax Notes Today, 5/10/2019, Article by Eric Yauch]

Guidance issued on S Corp Distribution in Post-Termination Period

The IRS ruled (Rev. Rul. 2019-13) that if, during a former S corporation’s post-termination transition period, the corporation makes a section 301 cash distribution to redeem a shareholder’s stock, the corporation should reduce its accumulated adjustments account to the extent of the proceeds of the redemption.

[Revenue Ruling 2019-13, 5/9/2019]

41 episodes available. A new episode about every 12 days averaging 19 mins duration .