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October 14,  2008

Federal Headlines

IRS Publishes 2008 Unused Housing Credit Carryover Amounts (Rev. Proc. 2008-57)

 

The IRS has published the total amounts of unused housing credit carryovers allocated from the national pool to qualified states under Code Sec. 42(h)(3)(D) for calendar year 2008. Among states receiving an allocation, the allocations range from a high of $518,587 for Texas to a low of $13,478 for Vermont.

Rev. Proc. 2008-57, 2008FED ¶46,618

Other References:

 

Code Sec. 42

 

CCH Reference - 2008FED ¶4385.85

 

Tax Research Consultant

 

CCH Reference - TRC BUSEXP: 54,220.10

Jurisdiction Lacking over Partner's Refund Action for Enhanced Interest; Refund Claim Untimely Filed and Barred by Res Judicata (Duffie, DC Tex.)

 

A federal district court lacked subject matter jurisdiction over a limited partner's suit for a refund of enhanced or penalty interest under Code Sec. 6621 because the interest assessment was attributable to an affected item that was not subject to the court's review. A prior Tax Court determination was res judicata with regard to the partnership-item component of the interest assessment because it held that the partnership activities resulting in adjustments to the partner's income tax liability were tax-motivated transactions.

 

The Tax Court decision was res judicata because the partner was a party to the Tax Court proceeding and was bound by the court's determination. Consequently, the partner could only challenge in a partner-level proceeding whether his underpayment was substantial and whether it was attributable to the tax-motivated transactions engaged in by the partnership. There was no requirement that the partner be found to lack a profit motive. Further, partnership items did not convert into nonpartnership items under the agreed decision entered into by the tax matters partner and the IRS because the rule of conversion only applies to settlement agreements entered into before partnership-level proceedings occur.

 

Finally, the partner failed to timely file his refund claim with the IRS within the TEFRA six-month limitations period. Because the IRS's assessment of interest was a computational affected item, the general limitations period of Code Sec. 6511(a) did not apply.

J.C. Duffie, DC Tex., 2008-2 USTC ¶50,582

Other References:

 

Code Sec. 6230

 

CCH Reference - 2008FED ¶37,769.15

 

Code Sec. 6621

 

CCH Reference - 2008FED ¶39,455.66

 

Code Sec. 7422

 

CCH Reference - 2008FED ¶41,688.27

 

Tax Research Consultant

 

CCH Reference - TRC PART: 60,056

CCH Reference -

TRC PART: 60,500

CCH Reference -

TRC LITIG: 9,052

 

State Headlines

Wisconsin --Multiple Taxes: Relief Announced for Taxpayers Affected by Hurricane Ike

 

For taxpayers affected by Hurricane Ike, the Wisconsin Department of Revenue has released information regarding extensions available under the individual income, corporation franchise and income, sales and use, and excise taxes. "Affected taxpayers" include taxpayers whose principal residence or principal place of business is located in the covered disaster area, taxpayers whose books or tax records or whose tax professionals' offices are located in the covered disaster area, and relief workers affiliated with a recognized government or philanthropic organization assisting with the relief activities in the covered disaster area.

 

Corporation franchise or income tax returns: For federal income tax returns, affected corporations with a due date that falls on or after September 7, 2008, and before January 5, 2009, are granted an extension of time to file until January 5, 2009. These corporations are allowed an additional 30 days beyond January 5, 2009, to file their corresponding Wisconsin returns. Affected corporations with an estimated tax payment due on or after September 7, 2008, and before January 5, 2009, receive an extension to make the payment until January 5, 2009.

 

Taxpayers other than corporations: Affected taxpayers have until January 5, 2009, to file their Wisconsin and federal income tax returns for tax year 2007. This extension applies to returns with an original or extended due date occurring on or after September 7, 2008, and before January 5, 2009. When filing the Wisconsin income tax return with the extension to January 5, 2009, taxpayers should enter the number "03" in the Special Conditions box on the front of the return and write "Hurricane Ike" on the line provided. Affected taxpayers with an estimated tax payment due on or after September 7, 2008, and before January 5, 2009, receive an extension to make the payment until January 5, 2009.

 

Other taxes: With respect to state sales and use, withholding, and excise tax returns, reports, and payments, for reporting periods with a due date that falls on or after September 7, 2008, and before January 5, 2009, an affected taxpayer may request a 30-day extension of time to file by contacting the Department's Registration Unit.

 

For the full text of the announcement, see http://www.dor.state.wi.us/taxpro/news/081013.html.

News for Tax Practitioners, Wisconsin Department of Revenue, October 13, 2008.

 
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