Tax Alerts
Tax Briefing(s)

After a five week recess, lawmakers returned to work in September and took up several tax bills. While some tax bills moved out of committee, their ultimate passage by both the House and Senate before year-end is unclear. Congress has only a finite number of days in which to complete work on a number of tax bills including the tax extenders, possible reforms to the Affordable Care Act (ACA), and energy legislation.

The approach of year-end 2015 makes it tax planning season. Tax law developments in 2015 can affect, for example, the deduction of costs and expenses, the treatment of contributions to tax-favored accounts, and the inclusion of certain benefits in income. Traditional year-end planning techniques for investments and retirement are also important. Small businesses also have some tools for year-end tax planning. Although it may seem early to contemplate year-end planning, the remaining weeks of 2015 will pass quickly and taxpayers need to be proactive.

Foreign travel expenses may be subject to allocation if the taxpayer engages in personal activities while traveling on business. A portion of the foreign travel expenses may be nondeductible if the individual engages in substantial nonbusiness activity. The allocation rules apply where the individual engages in substantial nonbusiness activity at, near, or beyond the business destination; or, when the personal destination is en route to and from the business destination.

Gross income is taxed to the person who earns it by performing services, or who owns the property that generates the income. Under the assignment of income doctrine, a taxpayer cannot avoid tax liability by assigning a right to income to someone else. The doctrine is invoked, for example, for assignments to creditors, family members, charities, and controlled entities. Thus, the income is taxable to the person who earned it, even if the person assigns the income to another and never personally receives the income. The doctrine can apply to both individuals and corporations.

In two recent cases, whistleblowers have had success before the Tax Court. In one case, Tax Court granted motions to compel production of documents filed by three whistleblowers—individuals who informed the government about a tax evasion scheme—whose reward claims the IRS had denied. In another case, the Tax Court found that the whistleblower statute does not require that a whistleblower first bring his or her information to the IRS Whistleblower Office to be eligible for an award.

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 tax reporting and filing data for individuals, businesses and other taxpayers for the month of October 2015.

Raising a family in today's economy can be difficult and many people will agree that breaks are few -- more people mean more expenditures. However, in recent years, the IRS has passed legislation that borders on "family-friendly", with tax credits and other breaks benefiting families with children. Recent legislation also addresses the growing trend towards giving families a break.