Articles Posted in IRS

9.5.19Estate planning attorneys and CPAs all keep an eye on letter rulings to see if IRS decisions have any bearing on their own client’s situations. In this case, a taxpayer is setting up a revocable trust and wants to use a Charitable Lead Annuity Trust known as a CLAT.

A recently posted letter ruling from the IRS addresses the use of a CLAT used in estate planning.

A CLAT letter ruling could be of interest to those who are using life insurance, annuities or other instruments in estate planning.

IRS 8.31.17Taxpayers who have a valid extension until October 15, 2017 to file income tax returns and who live in the covered Texas disaster area may be helped by the IRS extending the filing periods.

IRS announced certain relief from deadlines relating to filing and certain tax deposits for Hurricane Harvey victims. The IRS action covers filings that were due or matters that occurred on or after August 23, 2017(1). Returns for tax payers who have valid filing extensions in the affected Texas Counties have filing deadlines extended again until January 31, 2018. The extensions for eligible taxpayers also includes the quarterly estimated income tax payments originally due on Sept. 15, 2017 and Jan. 16, 2018, and the quarterly payroll and excise tax returns normally due on Oct. 31, 2017. In addition, penalties on payroll and excise tax deposits due on or after Aug. 23, 2017, and before Sept. 7, 2017, will be abated as long as the deposits were made by Sept. 7, 2017.

Generally, the persons eligible for this relief include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. The returns eligible include individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), that have either an original or extended due date occurring on or after Aug. 23, 2017, and before Jan. 31, 2018. Affected taxpayers that have an estimated income tax payment originally due on or after Aug. 23, 2017, and before Jan. 31, 2018, will not be subject to penalties for failure to pay estimated tax installments as long as such payments are paid on or before Jan. 31, 2018.

Signing tax formCertain transactions and situations that tend to occur more in retirement than during working years are red flags for the IRS. Even though only 0.84% of all individual tax returns are audited, knowing about these tips from Kiplinger's "9 IRS Audit Red Flags for Retirees" will help minimize your chance of being among the "lucky" ones.

Math errors may draw an IRS inquiry, but they don't usually mean an audit. Nonetheless, review these red flags that could increase the chances that the IRS will give the return of a retired taxpayer some very special and unwanted attention.

The overall individual audit rate is only about one in 119, but the odds go up significantly as your income increases—like if you sell a valuable piece of property or get a big payout from a retirement plan.

Girl with magnifying glassThe goals of a family foundation may be ensured by appointing family members to head up the foundation.  Children or siblings of the deceased are usually appointed to run these foundations, with the hopes that they know better than anyone unrelated to the family how to achieve and maintain the values and goals of the foundation.

This “keep-it-in-the-family” approach may not be the best in every family.

The New York Times, in “When Family Members Run Foundations, Scrutiny Never Ends,” identifies some of the potential pitfalls awaiting unwary family members when running a family foundation.

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