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Another circuit holds that tax debt on a late-filed tax return is rarely dischargeable in bankruptcy

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The U.S. Court of Appeals for the Third Circuit has ruled that, except with respect to returns prepared with the assistance of the IRS, debts for unpaid taxes from late-filed tax returns aren’t dischargeable in bankruptcy. In so doing, it affirmed U.S. District Court and bankruptcy court decisions and also came to the same conclusion as the U.S. Appeals Courts in eight other circuits.

Auto racing team gets a green flag

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When businesses dispose of assets, gain or loss must generally be recognized on tax returns, depending on the nature of the disposition (by sale, exchange, or involuntary conversion). In a private letter ruling, the IRS approved how a Formula 1 auto racing team handled its auto parts disposition for gain and loss purposes. Due to the unique nature of auto racing, the IRS ruled that each part used to build race cars for each specific race was the appropriate asset to be valued for disposition purposes. (PLR 201710006)

Dig out first, then file for an extension

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The IRS has granted businesses affected by Winter Storm Stella, the storm that hit parts of the Northeast and Mid-Atlantic this week, additional time to request a 6-month extension to file their 2016 federal tax returns. The extension for the extension affects calendar year partnerships and S corporations that must file their 2016 returns by March 15, or else file for an automatic 6-month extension on Form 7004. The deadline to file an extension is March 20. Eligible taxpayers must write “Winter Storm Stella” on their Form 7004 extension request.

Proposed health care bill clears two House committees

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Following nearly 18 hours of debate, the American Health Care Act (AHCA) was approved by the Ways and Means Committee on March 9 by a 23-16 party line vote. The House Energy and Commerce Committee also approved the bill, which repeals and replaces the Affordable Care Act (ACA), although many ACA provisions will remain under the AHCA. Both parts of the legislation will now go to the House Budget Committee, which is expected to assemble the final bill that will then be voted on by the full chamber.