Court rules on taxpayers’ disposal of partnership interests

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The U.S. Tax Court has upheld the IRS determination that two brothers’ losses on the disposal of partnership interests weren’t ordinary abandonment losses, as they claimed on their returns, but rather were capital losses. The court also rejected the brothers’ argument that they received proceeds from the sale, which were used to acquire an intangible asset they were entitled to amortize. This argument was “contrary to the unambiguous terms” of the partnership agreement.

New disaster relief policy

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The IRS has issued interim guidance expanding its disaster assistance and emergency relief. The IRS is authorized to provide relief from failure to file, failure to pay and other time-sensitive tasks in counties affected by federally declared disasters that are identified for individual assistance by the Federal Emergency Management Agency (FEMA). Under the new policy, a disaster impacting several states and occurring near a major filing date may warrant an expansion of relief to include areas identified by FEMA for public assistance.

Taxpayer was the employer; PEO didn’t control payment of wages

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In Chief Counsel Advice (CCA), the IRS held that, where a taxpayer contracted with a professional employer organization (PEO) to remit the taxpayer’s employment taxes and the PEO failed to remit those taxes, the taxpayer was liable for the taxes. The CCA rejected the taxpayer’s arguments that a common law employer isn’t an employer for federal income tax withholding purposes if he doesn’t control the payment of wages and that Sec. 530 of the Revenue Act of 1978 provided him relief from that liability.

Certain IRS fees to be paid electronically

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The IRS announced that beginning June 15, 2017, the Pay.gov electronic payment website will be available for taxpayers to make the required user fee payments when requesting certain IRS rulings. After August 15, Pay.gov will become the only permissible payment method for those fees. Online fees can be paid with Form 1128, Form 2553, Form 3115, Form 8716, Private Letter Rulings and Closing Agreements.