When charitable contributions are made in the form of property the question of fair market value (FMV) enters the picture. While FMV is easily defined, it much harder to actually determine in some instances, notes attorney Janet Nava Bandera in a recent issue of CCH’s Journal of Practical Estate Planning. The issue is to ensure that donors get the best possible tax treatment for their donations while staying out of trouble with the IRS. All of this is made even harder by the IRS’s own admission that valuing certain donated property is difficult. Ms. Bandera provides tips and guidelines to help you make sure your valuations of donated property meet IRS muster and avoid problems if challenged.

 

The IRS is casting its nets as widely as possible in tax shelter cases by using information gathered in one case to pursue investors or promoters in other cases and enforcement actions. The IRS Chief Counsel has outlined several scenarios under which third-party disclosures can be used by IRS staff in pursuing a case. The editors of CCH’s Tax Shelter Alert have taken a close look at these positions and outline them in a recent issue to show just what the Service is up to when it comes to going after abusive transaction cases.

 

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Code Section 199 created by the 2004 American Jobs Act has been classified by many as one of the best tax planning opportunities for American businesses in some time. But attorneys Robert Feinschreiber and Margaret Kent warn practitioners to proceed with some caution with Sec. 199 deductions because there can be significant tax malpractice risks involved. In a recent issue of Corporate Business Taxation Monthly, these practitioners note that the IRS will take a close look at some Sec. 199 deductions with an eye toward disallowing those deductions by taking an item-by-item analysis, just as practitioners must do in calculating the potential deductions. The authors also point out there could be client actions against tax advisors who don’t adequately inform them of the potential savings under Sec. 199. Their article provides a close look at just what Sec. 199 does and doesn’t do.

 

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Much like the last presidential election, Ohio will be the focus of state tax professionals in 2006 because of legal and legislative issues that could have long-term effects on the landscape of state corporate taxes. First is the Cuno v. DaimlerChrysler case that is moving toward the U.S. Supreme Court. This is the case involving taxpayers challenging business incentives that could effectively end many of the incentive programs states are offering businesses. Next is Ohio’s controversial Commercial Activities Tax that is an attempt, some say, to go around long-standing nexus standards for subjecting businesses to state income taxes. These and the other hottest state tax issues of the year are outlined in a recent issue of CCH’s State Income Tax Alert.

 

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Reforming property taxes by dropping personal property taxes tops the list of the hottest property tax issues for the year as other states look at possibly following Ohio’s lead in this area, according to the top expert in property taxation interviewed recently by the editors of CCH’s Property Tax Alert newsletter. Ohio’s phase out of personal property tax on businesses, railroads, and telecommunications companies over the next five years could be adopted by other states—but paying for such reform is a huge issue, experts note. At the same time, many states are stepping up their personal property tax audits in an effort to bring more dollars into local government budgets, the editors found.

 

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