No deduction for donated aircraft without contemporaneous written acknowledgment

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The U.S. Tax Court held that a taxpayer wasn’t entitled to a charitable deduction for his alleged gift of his interest in an aircraft. He didn’t claim the deduction on his original tax return but rather on an amended return filed nearly six years after the donation. And the documentation attached to his amended return 1) wasn’t a “contemporaneous written acknowledgment” as required by the tax code and 2) didn’t satisfy the statute’s strict substantiation requirements. (148 TC No. 5)

Staff cuts hit IRS

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Shrinking staff takes a toll on the IRS’s criminal investigations. According to the fiscal year 2016 annual report from the Criminal Investigation (CI) unit, staffing levels for special agents have decreased by 19.1%, and professional staff declined 21.7% over the last five years due to budget cutbacks. As a result, between 2012 and 2016, CI’s prosecution authorizations went down from 2,664 in 2012 to 2,217 in 2016. Nonetheless, CI’s work resulted in 2,699 sentencings of tax criminals in 2016.

President Trump promises “historic” tax relief

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In his recent first address to a joint session of Congress, the President vowed to reduce corporate taxes. He said that U.S. companies are taxed at one of the highest rates in the world and that his economic team is developing tax reform that will reduce the tax rate on U.S. companies so that they can compete and thrive. The President also promised massive tax relief for the middle class. However, he didn’t offer specific details in the speech on how he planned to accomplish either of these goals.

Proposed border adjustment tax under fire

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Congressional Republicans’ proposed border adjustment tax is facing opposition from some businesses, including Wal-Mart, Best Buy, Costco, Macy’s, Nike and Target. These retailers are members of Americans for Affordable Products, a business coalition working against border adjustment. Some Republicans are also concerned about the proposal. The main thrust of border adjustment is to exempt companies from having to pay federal income tax on export revenues while ending the deductibility of import costs from taxable income.