BISK EDUCATION’S WEEKLY TAX UPDATE
With E. Lynn Nichols, CPA
October 7, 2013
CITATIONS
1. Summary Judgment Denied in IRC Sec. 2035(b) Gift Valuation Issue
(Jean Steinberg v. Commissioner; 141 T.C. No. 8; 9/30/2013)
The Tax Court, denying the IRS summary judgment, held that a group of gift donees'
assumption of potential section 2035(b) estate tax liability is not barred from being
consideration in money or money's worth within the meaning of section 2512 for gift
valuation purposes.
2. Custom Home Builder Subject to IRC Sec. 263A and Must File 3115 to Change
(Frontier Custom Builders Inc. v. Commissioner; T.C. Memo. 2013-231; 9/30/2013)
The Tax Court held that a portion of the adjustments the IRS made to a custom
home building company's income are accurate, finding that the company was not
entitled to deduct all costs and expenses of its business but should have capitalized
a portion of the costs and expenses because it is a producer of real property under
section 263A.
3. Supreme Court Grants Cert in Quality Stores
(Tax Notes Today; 10/2/2013; Article by Matthew Dalton)
The Supreme Court on October 1 granted the government's petition for certiorari in
United States v. Quality Stores, No. 12-1408, in which the government framed the
question presented as whether severance payments made to employees whose
employment was involuntarily terminated are taxable under FICA.
4. Bike-Share Program Is Not a Qualified Transportation Fringe
(INFO 2013-0032; 7/26/2013)
The IRS explained why a bike-share program is not a qualified transportation fringe
benefit under section 132(f) for purposes of exclusion from income.
5. Individual's Claim of Tax Fraud Against Trustees Fails on Technical Grounds
(Mary C. Vandenheede v. Frank B. Vecchio et al.; CA 6; No. 13-1253; 10/1/2013)
The Sixth Circuit, in an unpublished opinion, affirmed a district court judgment
against an individual in her suit for tax fraud under section 7434, civil conspiracy,
and other state law claims against the trustees (a CPA, CPA firm, and an Attorney)
of her boyfriend's trust stemming from the filing of Forms 1099 that indicated she
received nonemployee compensation from the trust.