By John G. Hodnette Nonprofit organizations generally must file a Form 1023 with the IRS to obtain federal tax-exempt status under Section 501(c)(3). However, such status may not be eternal. Tax-exempt status is automatically revoked when a charity does not file the required Form 990 series return or notice for three consecutive years. The IRS […]
By John G. Hodnette Whole life insurance, when distinguished from term life insurance, has several qualities that may create surprising tax results. One of these potential pitfalls can arise when taxpayers take out policy loans on their whole life policies. These loans, when received by the taxpayer, are not taxable income so long as they […]
By John G. Hodnette Single-member LLCs and grantor trusts are both entities that exist for state law purposes but are disregarded for federal income tax purposes. These entities are commonly known as disregarded entities or DREs. The ownership of partnership interests by a disregarded entity creates the question of who the partner really is. A […]
By John G. Hodnette The Internal Revenue Code (“IRC”) sometimes provides multiple avenues for a taxpayer to obtain a deduction depending on how the taxpayer characterizes the loss. One example is a casualty loss deducted under either Section 162 or Section 165. Although these two sections may both offer a deduction for the same loss, […]
By John G. Hodnette On March 27, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act introduced a number of new provisions to assist businesses and individuals during the COVID-19 pandemic. One such provision adjusts the rules of net operating loss (“NOL”) carrybacks. Before 2018, NOLs of a business or individual could be carried back […]
By John G. Hodnette The landscape of the United States has changed in the past weeks as COVID-19 continues to sweep across our nation. The Federal government attempted to mitigate the economic damage of the virus on March 27 with the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Although the programs created by the […]
By John G. Hodnette The novel coronavirus known as COVID-19 has changed the world as a global pandemic disrupts the day-to-day business operations of almost every country. The IRS has responded to ease the strain on taxpayers during this difficult time by modifying its procedures for collecting assessed federal tax liabilities. First, those with existing […]
By John G. Hodnette Prior to the 2017 Tax Act, Section 71 provided alimony payments entitled the payor to a deduction and required the payee to include them in taxable income. The 2017 Tax Act repealed Section 71. For alimony orders executed after December 31, 2018, a payor of alimony receives no deduction, and an […]
By Herman Spence III On November 7, 2019, John Hodnette posted an article on the Tax Section’s blog regarding employee educational fringe benefits. As noted in the article, Section 132(a)(3) provides an exclusion from gross income for working condition fringes. A working condition fringe is any property or service provided to an employee to the […]
By Keith A. Wood This is the first of two installments of this article. The second installment will soon be posted on the Tax Section blog. I. Damages for Emotional Distress Not Excludable from Taxable Income Unless Directly Associated with Physical Injury. A. Background. Section 104(a)(2) provides an exclusion from gross income […]