This year, the IRS proposed regulations addressing the character of a loss from the abandonment of securities. The IRS has decided that an abandonment of securities isn’t an event apart from worthlessness but that abandonment “establishes the worthlessness of the security to the taxpayer.” 

In her column in Taxes—The Tax Magazine, Debra J. Bennett cites case law and the language of the proposed regulations to show that abandoning securities can set a fixed date proving worthlessness occurred in a given tax year.

Nearly every company in today’s current business environment has a Web site or uses the Internet in some fashion to promote or sell products, communicate with customers, or provide customer service. Due to the inherently interstate nature of Internet communications, these kinds of activities are often overlooked when a company analyzes its nexus risks in any given state.

Companies should be aware, however, that states may take the position that Web-related activities could potentially trigger nexus enforcement, as Maryann Gall and Laura Kulwicki demonstrate in their column in the Journal of State Taxation.

The IRS has announced that taxpayers will have until Dec. 31, 2008—rather than Dec. 31, 2007—to bring documents into compliance with the final nonqualified deferred compensation (NQDC) regulations under Code Sec. 409A [IR-2007-157; Notice 2007-78]. Code Sec. 409A and the accompanying regulations provide rules for the tax treatment of NQDC plans in response to concerns involving reported abuses of these plans that typically provide benefits to executives and key employees. 

An article in the Federal Tax Course Letter gives background on Code Sec. 409A and details on a retroactive amendment period and an anticipated voluntary compliance program.