At the end of October 2024, the IRS announced that it will no longer automatically assess penalties for late reporting of large foreign gifts. Before assessing a penalty, the IRS will now review reasonable cause statements submitted with late-filed Form 3520, which reports gifts or bequests from foreign persons, to determine whether a penalty should be imposed.

Estate of Fields v. Commissioner, T.C. Memo. 2024-90 (Sept. 26, 2024) (Copeland, J.), provides a textbook example of a “bad facts” family limited partnership (FLP) that caused estate tax inclusion of the property transferred to the FLP under both sections 2036(a)(1) and (2) with loss of discounts for lack of control and lack of marketability. In doing so, the court applied the Tax Court’s 2017 holding in Estate of Powell v. Commissioner, 148 T.C. 392 (2017)—that the ability of the decedent as a limited partner to join together with other partners to liquidate the FLP constitutes a section 2036(a)(2) estate tax trigger—and raises the specter of accuracy-related penalties that may loom where section 2036 applies.

In Moore v. U.S. (36 F. 4th 930), the U.S. Supreme Court ruled on a constitutional challenge of IRC section 965, the mandatory repatriation tax (MRT). The MRT is a one-time repatriation tax (or “deemed dividend”) that passes through undistributed accumulated income of U.S.-controlled foreign corporations (CFCs). Section 965 is part of the 2017 Tax Cuts and Jobs Act (P.L. 115-97), which addresses foreign business earnings, including CFCs, inversions and the GILTI tax. The Act generally taxes U.S. shareholders owning 10% or more of a foreign corporation on otherwise tax-deferred foreign earnings.

This article is the third in a three-part series on succession planning. In Part I of the series, we discussed the legal considerations in creating an exit or succession plan, including estate planning and estate and gift tax planning. In Part II, we discussed the business considerations, including how to avoid the mistakes business owners and executives often make in preparing for exit or succession.

The case of Scott and Elizabeth Bryant was heard in the Division of Tax Appeals by Administrative Law Judge Alexander Chu-Fong. The determination was dated Sept. 12, 2024, DTA number 830818.

This case addresses New York State’s convenience rule for telecommuting employees during the COVID-19 pandemic. This can also apply to other forced office closures.

Effective July 19, 2024, the Heirs Property Protection and Deed Theft Prevention Act of 2024 became law in New York. With the enactment of a new Section 424 of the Real Property Law (RPL), a Transfer on Death Deed (TODD) was authorized. One of the stated objectives of a TODD is to avoid probate for real property without having to use a costlier living trust. This purportedly simplifies and reduces the expense of conveying real property for persons of modest means and lower income.

This is part two of a two-part series on Leveraging AI for Tax Resolution and Client Success. To view part one, please click here.

First, it is crucial to understand the different types of AI models and capabilities readily available on the market today.

Charitable contributions play a crucial role in addressing important needs within our communities, and the U.S. tax code recognizes their value by providing various incentives. By understanding tax strategies related to charitable giving, individuals can maximize their impact while also receiving significant tax advantages. This article will discuss some lesser-known aspects of direct charitable giving and common charitable planning strategies using trusts.

It is estimated that 70% of adults aged 65 years and older will require long-term care at some point in their lives. Long-term care includes a variety of services designed to meet an individual’s health or personal care needs, allowing them to live as independently and safely as possible when they can no longer perform daily activities on their own.