2008 15 Intro - Chapter 15 Rulings and Cases Explanation of...

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2008 Chapter 15: Rulings and Cases 551 15 Chapter 15: Rulings and Cases Following is a discussion of the significance (weight) given to the different sources: Substantial Authority If there is substantial authority for a position taken on a tax return, neither the taxpayer nor the tax preparer will be subject to the penalty for underreporting income even if the IRS successfully challenges the position taken on the return. By contrast, if there is not substantial authority for a position taken on a tax return, the underreporting penalties may be imposed unless the position has been adequately disclosed and there is a reasonable basis for the position. Evaluation of Authorities. There is substantial authority for the tax treatment of an item only if the weight of the authorities supporting the treatment is substantial in relation to the weight of authorities supporting contrary treatment. EXPLANATION OF CONTENTS Please Note. This chapter is a collection of selected cases, Revenue Rulings, Revenue Procedures, Treasury Regulations, Announcements, and Letter Rulings issued during the past year, through approximately September 1, 2008. They appear in a condensed version, and are not to be relied on as a substitute for the full documents. A full citation appears for each item. This is not a comprehensive coverage of all tax law changes or explanations. It reports the rulings and cases that are likely to be of interest to most tax professionals. Explanation of Contents .......................................... 551 Judicial System for Tax Disputes ............................ 553 Agricultural Issues ................................................... 557 Amortization and Depreciation ............................... 558 At Risk ....................................................................... 560 Bad Debt ................................................................... 561 Bankruptcy and Discharge of Indebtedness .......... 562 Business Expenses ..................................................... 567 Capital Gains and Losses ......................................... 569 Casualty Loss ............................................................ 572 Clergy ........................................................................ 573 Corporations ............................................................ 573 Credits ....................................................................... 575 Deductions ................................................................. 576 Dependency Issues .................................................... 582 Divorce Issues ........................................................... 586 Employment Tax Issues ........................................... 588 Estate and Gift .......................................................... 595 Gross Income ............................................................ 598 Innocent Spouse ........................................................ 606 IRS Procedures — Miscellaneous ........................... 609 IRS Procedures — Payments .................................. 614 IRS Procedures — Penalties .................................... 615 Itemized Deductions ................................................. 618 Like-Kind Exchanges ............................................... 621 Not for Profit ............................................................. 624 Partnerships .............................................................. 627 Passive Activities ...................................................... 628 Residences ................................................................. 629 Retirement ................................................................. 629 S Corporation ........................................................... 633 Tax Fraud .................................................................. 634 Travel and Transportation Expense ....................... 638 Copyrighted by the Board of Trustees of the University of Illinois. This information was correct when originally published. It has not been updated for any subsequent law changes.
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