Law of the land. Can you deduct attorney’s fees in a proceeding against the IRS? It depends. In a new case, the IRS assessed the “100% penalty” for unpaidagainst the taxpayer. It claimed that the taxpayer was a “responsible person.” Although the penalty was dismissed, the Fourth Circuit said it was reasonable for the IRS to proceed, based on the circumstantial evidence. Thus, the attorney’s fees could not be deducted. (Applebaum, CA-4, No. 16-1949, 8/30/17)
MLPs in IRAs. You can invest in master limited partnerships (MLPs) through an IRA, but you may owe tax on the MLP income. What’s more, losses from IRA-owned MLPs aren’t deductible. New case: A taxpayer reported large MLP losses for the year. He deducted the losses on his personal return but the appellate court denied the deduction. (Fish, CA-9 No. 15-73389, 10/17/17) However, the loss can offset other income that accumulates inside the IRA.
Tax reform or not? While Congress continues to grapple with sweeping tax reform proposals as we go to press, pundits are still debating the chances that significant new legislation will be enacted. The potential tax reform package includes tax cuts for individuals and businesses, modifications to itemized deductions and estate tax changes. Stay tuned for new developments.
- Small Business Tax Deduction Strategies No matches