By John G. Hodnette For administrative convenience, federal and North Carolina law both provide that after a specific period of time, uncollected taxes are written off and released. This provides some relief for taxpayers who owe taxes for years long past as well as preventing tax agencies from fruitlessly pursuing old and cold liabilities. Section […]
By John G. Hodnette Limited liability companies can elect to be taxed under federal and state law in a number of different ways. One popular choice for small business owners is for an LLC to elect to be an S corporation. The primary tax advantage of operating as an S corporation is minimizing self-employment taxes. […]
By Keith A. Wood This is the second installment of this article. The first installment was previously posted on the Tax Section’s blog. I. No Easement Charitable Contribution Deduction Allowed Where Form 8283 Did Not Include Cost Basis Information. In yet another case of a failed charitable contribution donation deduction, in Oakhill Woods, LLC v. […]
By John G. Hodnette The decrease in the corporate tax rate by the 2017 Tax Act has made it more favorable for businesses to operate as C corporations. With more businesses opting to be C corporations, the gain exclusion of Section 1202 is more important. Section 1202 provides an exemption to eligible taxpayers of between […]
By Keith A. Wood This is the first of two installments of this article. The second installment will be posted soon on the Tax Section’s blog. I. Audit Statistics; What Are Your Chances of Being Audited? In early 2020, the IRS published its 2019 data book, which contained audit statistics for the fiscal year that […]
By Mike Wenig Dec. 2, 2020, marked the annual meeting between the Tax Section and the IRS, along with our invited guests from the Tax Committee for the North Carolina Association of Certified Public Accountants. As with most meetings these days, it was held virtually. We were fortunate to have representatives from the IRS from […]
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, […]