IRS NEWS FOR TAX PROFESSIONALS
FEBRUARY 2007
● The next national phone forum topic is Choosing a Tax Return Preparer.
Register at: https://www.attevent.com/rsvpreg.asp. using the appropriate access code below.
CONFERENCE
ACCESS
Date
CODE
Central
Mountain
Feb. 20, 2008
617460
9:00 a.m.
8:00 am
Feb. 20, 2008
121068
12:00 pm
11:00 am
Feb. 20, 2008
302147
6:00 pm
5:00 pm
●Tax Talk Today is available live, in archives and as podcast downloads.
▪ Tuesday, March 11, 2008 1-2 CT International Tax Issues: Understanding Tax Treaties
● Notice 2008-5 provides guidance for determining whether a taxpayer may claim a dependency
exemption deduction for an unrelated child.
● For married couples in joint ventures, who want to take advantage of new law effective May of
2007, the instructions on how to elect to report their business income on Schedule C rather than
a partnership return is in the 1065 instructions and Schedule C instructions.
● FIling Season Updates: IR 2008-1 FS-2008-1 IR-2007-209
Alternative Minimum Tax - How It Affects Filing Season 2008
2008 Fact Sheets help your clients, including FS-2008-9 , Identity Theft E-mail Scams a
Growing Problem.
Forms delayed for e-filing include:
 Form 5695, Residential Energy Credits
 Form 8396, Mortgage Interest Credit
 Form 8863, Education Credits
 Schedule 2 (Form 1040A), Child and Dependent Care Expenses (Form 2441 is not delayed)
 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit,
 Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082
Basis Adjustment),
 Form 4136, Credit for Federal Tax Paid on Fuels
● Tax gap Fact sheet 2007-27 on Employment Taxes and Classifying Workers, has been added
to this monthly series.
● IR-2007-203. Employees who were misclassified as independent contractors should use new
Form 8919, Uncollected Social Security and Medicare Tax on Wages, to figure their share of
uncollected FICA taxes. Other new forms include:
Form 8916-F, Reconciliation of Expenses Allocable Under Treasury Regulation 1.861-8 from
Home Office on Schedule M-3
Form 8917, Tuition and Fees Deduction
Form 8918, Material Advisor Disclosure Statement
Form 8921, Applicable Insurance Contracts Information Return (Rev. June 2007)
Form 8922, Applicable Insurance Contract Information Return (Rev. March 2007)
Form 8925, Report of Employer-Owned Life Insurance Contracts
Form 9002 Employee Benefit Plan Section 401(k) Requirements
Form 9417 Employee Plan Deficiency Checksheet Section 401(k) requirements
Form 9416 Employee Plan Deficiency Checksheet Section 401(m) requirements
● The IRS is reaching small businesses worldwide through a new partnership with Internet TV
channel SBTV. A new tax tip will air each Wednesday through April.
● IMRS issues Read the latest issues resolved through the Issue Management Resolution
System.
● Information related to your practice includes
 IR-2008-2 gives taxpayers greater control over their tax return information held by tax
return preparers; marketing restrictions on RALS are proposed.
 IR-2007-213 expands the " more likely than not" standard.
 Notice 2008-11 , Notice 2008-12, and Notice 2008-13 discuss tax return preparer
penalty provisions under section 6694 of the Code.
RECENT TECHNICAL GUIDANCE
● Frivolous arguments are discussed in Notice 2008-14, IR-2007-205 , IR-2008-08. and The
Truth About Frivolous Tax Arguments.
● A new page on IRS.gov details the differences between an agent appointed using Form 2678
and a reporting agent authorized under Form 8655.
http://www.irs.gov/businesses/small/article/0,,id=175971,00.html
● IR-2007-198. Payments under the Veterans Affairs (VA) Compensated Work Therapy (CWT)
program are no longer taxable and disabled veterans who paid tax on these benefits in the past
three years can now claim refunds.
● IR-2007-200 IRS Fast Track Settlement Program Expands. Under Fast Track, taxpayers under
examination with issues in dispute work with examination and Appeals to resolve those issues.
● IR-2007-201 and Notice 2008-4 outline ways informants can report violations of the tax law and
possibly claim a reward.
● IR-2007-204, provides transitional relief on updated Form 990. Form 990 Redesign for Tax
Year 2008. Notice 2008-6 provides transitional filing relief for private foundations.
● IR-2007-208 has Information on the 2008 inflation adjustments to the excise taxes on air
transportation.
● IR 2007-210 lists five 2008 GM vehicles that qualify for the Alternative Motor Vehicle Credit.
● IR 2007-211 has proposed regulations on an age discrimination safe harbor for hybrid pension
plans, conversion protection for employees, and a 3-year minimum vesting requirement.
● IR 2007-212 has proposed regulations on single-employer defined benefit plans.
● IR-2008-4 has the National Taxpayer Advocate's annual report to Congress.
● Notice 2008-01 provides rules regarding the deductibility of health insurance costs of 2-percent
shareholder-employees.
● Notice 2008-7 provides transitional relief for certain defined contribution plans holding publicly
traded employer securities under Notice 2006-107.
● Notice 2008-8 clarifies reporting requirements for certain transactions involving statutory
options that occurred during 2007..
● Notice 2008-9 has final regulations on Unified Rule for Loss on Subsidiary Stock.
● Notice 2008-10 announces that regulations will be issued to clarify that certain outbound
reorganizations that effectively repatriate earnings of foreign corporations to U.S. corporations will
be subject to recognition of gain.
● Notice 2008-16 provides rules for substantiating lump-sum charitable contributions made
through the Combined Federal Campaign or a similar program - e.g. United Way.
● Notice 2008-15 explains how individual taxpayers may allocate prepaid qualified mortgage
insurance premiums..
● Notice 2008-19 and Revenue Ruling 2008-08 discuss specific individual cell or protected cell
companies treated as an insurance company.
● Notice 2008-20 identifies the components of the Intermediary Transaction Tax Shelter.
● Revenue Ruling 2008-5 -Wash Sales and IRAs -- provides that if an individual sells securities
for a loss and has an IRA purchase substantially identical securities within a specified period, the
loss on the sale of the stock or securities is disallowed, and the individual’s basis in the IRA or
Roth IRA is not increased.
● Revenue Ruling 2008-6 provides that certain rental assistance payments made under the
Indian Housing Block Grant Program administered by HUD are not federal grants.
FOREIGN LANGUAGE/FOREIGN INCOME
● IR-2008-09 The IRS joins national TV network Telemundo in a special one-hour tax program for
Spanish-speaking taxpayers on Sunday, Jan. 27. The program, “Los Impuestos y Usted” (“Taxes
and You”), will air at:
 2:30 p.m. Central Time.
 1:30 p.m. Mountain Time.
● Guides for Money Service Businesses are now available in eight languages (English, Spanish,
Arabic, Chinese, Vietnamese, Korean, Farsi and Russian) from the Financial Crimes
Enforcement Network.
● Notice 2008-03 provides that, pending the outcome of a study to determine whether the
impuesto empresarial a tasa única (the “IETU”) is a creditable income tax, the IRS will not
challenge a taxpayer’s position that the IETU is an income tax that is eligible for a credit under
Article 24(1) of the U.S.-Mexico income tax treaty. On Jan. 1, 2008, the IETU, a single rate
business tax adopted by Mexico, will become effective.
● Revenue Procedure 2008-10 For section 846, the loss payment patterns and discount factors
for each property and casualty line of business for the 2007 determination year.
● Notice 2008-18 alerts life insurance companies to f issues that may surrounding adoption of
proposed Actuarial Guideline VACARVM and/or a proposed principles-based approach for
calculating statutory reserves for life insurance.
● IR-2008-7 20 new members of the Information Reporting Program Advisory Committee
(IRPAC) have been selected, including Philip Kirchner of Green Bay, WI. He is Director of
Product Development at Greatland Corporation and member of the National Association of
Computerized Tax Processors.