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Federal Headlines
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The IRS has provided real estate investment trusts (REITS) with a method for applying the prohibited transactions tax safe harbor under Code Sec. 857(b)(6))(C)(iii) and (D)(iv) for a tax year that begins on or before July 30, 2008, and ends on or after July 31, 2008. The requirements are satisfied if either: (1) the REIT satisfies the 7-Sales Test for the entire tax year or (2) the REIT satisfies the 10-Percent Adjusted Basis Test.
The requirements are also satisfied if both: (1) the aggregate adjusted bases (as determined for purposes of computing earnings and profits) or property (other than sales of foreclosure property or sales to which
Code Sec. 1033 applies) sold during the portion of the tax year ending on July 30, 2008, did not exceed 10 percent of the aggregate bases of all of the assets of the REIT as of the beginning of the tax year and (2) the REIT satisfies the 10-Percent Fair Market Value Test for the entire tax year.
Rev. Proc. 2008-69, 2008FED ¶46,648
Other References:
Code Sec. 857
CCH Reference - 2008FED ¶26,533.55
Tax Research Consultant
CCH Reference - TRC RIC: 6,070.05
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State Headlines
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Out-of-state insurance companies that did business in Missouri and paid a tax on the insurance premiums they collected in Missouri did not timely file tax refund requests for their 2004 insurance premium tax payments. Under Sec. 136.035.3, RSMo, the general tax refund statute, the deadline for the insurers' 2004 premium tax refund claims was two years from the date the insurers remitted their final 2004 premium taxes, or June 2, 2007. The insurers contended that Sec. 148.076, not Sec. 136.035, established the statute of limitations for their refund requests because it was in the same chapter as the statute that imposes the insurance premium tax. However, the insurers' argument was unpersuasive because Sec. 148.076, by its plain language, is limited to refunds of overpayments of taxes imposed pursuant to specific statutory provisions relating to banking institutions.
The insurers' refund requests were postmarked Friday, June 1, 2007. Delivery of the refund requests was attempted on June 2, but the director of revenue's office was closed because it was a Saturday. The refund requests were received by the director's office when it reopened for business on Monday, June 4. Sec. 136.035 does not mandate that the tax refund request deadline be extended if it falls on a Saturday, and the Legislature has not created a general exception for statutory deadlines that fall on a Saturday. In addition, there is no statute requiring the director of revenue to accept physically delivered Sec. 136.035 filings on a Saturday. Thus when the refund request deadline under Sec. 136.035.3 falls on a Saturday, the de facto deadline for filings is the preceding business day.
The insurers cited Evergreen Lawn Service, Inc. v. Director of Revenue, 685 S.W.2d 829 (Mo. banc 1985), for the proposition that their refund requests were timely filed because they attempted physical delivery on the closed director's office on the statutory deadline of June 2, 2007. However, the insurers' reliance on Evergreen was misplaced. Evergreen pertained to the statutory time limitation on appeals to the Missouri Administrative Hearing Commission, not on refund requests lodged with the director of revenue. In contrast, the insurers in this case challenged the time limitation for retrieving money from the state's treasury. Unlike provisions governing the right to an appeal, tax refund provisions are strictly construed against the taxpayers. Accordingly, the court could not rewrite Sec. 136.035 to extend the applicable statute of limitations or to permit extended time for filing refund requests.
Insurance Co. of the State of PA v. Director of Revenue, Missouri Supreme Court, No. SC89080, November 4, 2008, ¶203-018
Other References:
Explanations at ¶89-224
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