Upcoming National Meeting

2024 Spring Conference / Audit Session

This three and a half day conference will bring multistate tax professionals, with various levels of experience in state and local income/franchise taxes and sales/use taxes together in an environment that allows for extensive interaction and exchange of information as well as updates on key SALT issues and insights regarding state tax trends and opportunities. The program is targeted to all level

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Newsletters & Media

Cost Conscious

ISSUE 24-08; April 19, 2024

State Corporate Income Tax Filing Methods (Part 1) – In recent years, many states have either changed or considered changing their default corporate tax filing. New Jersey adopted water’s-edge combined reporting in 2019 only to come back in 2023 with a proposal to allow the Director of Tax to “decombine” taxpayers. Maine, New Hampshire, and Vermont have studied the implementation of mandatory worl

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Bloomberg TAX

Free Pilot Costs Fell Below Estimates at $24.6 Million, IRS says

April 26, 2024

The IRS's free electronic filing tool pilot cost $24.6 million, significantly below early estimates as the agency confronts a critical turning point on the future of the government-run program.

UN Committee Begins Work on Drafting Global Tax-Cooperation Plan

April 26, 2024

A United Nations committee opened nine days of meetings Friday to begin drafting what the UN’s planned framework for international tax cooperation will look like.

IRS CCA: IRS May Continue to Correspond with Foreign Partnership Representative at Last Known US Address for a Taxable Year as in Effect, Regardless of Whether Substantial Presence Test Is Met (IRC §6223)

April 26, 2024

The IRS may treat the designation of a partnership representative (a resident of a foreign country who files returns reflecting an address in a foreign country) for a taxable year as in effect, and the notice of administrative proceeding will be sufficient if mailed to the partnership representative's last known address in the United States, which appears on the partnership representative's most recently filed and properly processed federal tax return, the Chief Counsel's Office informally advised. Partnership (P) designated R as a partnership representative for purposes of I.R.C. §6223 on P's partnership return for tax year as provided in Treas. Reg. § 301.6223-1(c)(2). R has a United States taxpayer identification number, and, in order to satisfy the requirements of Treas. Reg. §301.6223-1(b)(2) (the "substantial presence test"), P provided its street address in the United States and telephone number with a United States area code for R in connection with the designation. R is a resident of a foreign country and files tax returns reflecting an address in a foreign country, which is reflected in the IRS's records as the taxpayer's last known address. R was also a partner of P for the tax year, and P issued a Schedule K-1 for the tax year to R at an address in the foreign country. The IRS is not obligated to search for or otherwise seek out information related to the circumstances in which it may determine a partnership representative designation is not in effect, and the fact that the IRS is aware of any such circumstances does not obligate it to determine that a partnership representative designation is not in effect, the IRS stated. Thus, regardless of whether the substantial presence test is considered met by R, the IRS can continue to deal with R, rather than determining that a partnership representative designation is not in effect. [CCA 202417020]

Seattle Man Charged in $4.8 Million Tax Evasion Fraud Scheme

April 26, 2024

A Seattle real estate owner has been indicted on charges in connection to a $4.8 million tax evasion scheme, according to the Justice Department on Thursday.

Case: Petitioner Entitled to Conservation Easement Contribution Deduction, Gross Valuation Misstatement Penalty Applied (T.C. Memo) (IRC §170)

April 26, 2024

For the 2013 tax year, Petitioner was entitled to deduct $4.595 million for its donation of a conservation easement to a qualified charitable organization over approximately 1,546 acres of land near Macon, Georgia, but was subject to a gross valuation misstatement penalty because its claimed deduction exceeded $47 million, the U.S. Tax Court held in a memorandum opinion. The court rejected the IRS's arguments that no deduction was allowable because Petitioner did not make a qualified conservation contribution and lacked donative intent. In particular, the IRS contended that the easement deed did not protect the conservation purpose in perpetuity because the deed failed to provide the donee with a proportionate share of any extinguishment proceeds, as required by Treas. Reg. §1.170A-14(g)(6)(ii). However, the court was bound by the decision in Hewitt v. Commissioner, 21 F.4th 1336 (11th Cir. 2021), invalidating that regulatory provision as arbitrary and capricious and in violation of APA procedural requirements. The court also found that the appraisal attached to Petitioner's 2013 partnership return was a qualified appraisal, performed by a qualified appriaser, and Petitioner, therefore, satisfied the applicable substantiation requirements. In determining the value of the easement, and thus the amount deductible under I.R.C. §170, the court accepted the value determined by the IRS's expert, based on a highest and best use of the land as continued timber production, recreation, and very low-density residential use and comparable sales data. The value determined by Petitioner's expert was not acceptable because it was based on the development of 307 residential lots on the land that was not legally permissible under the land's zoning classification. [Buckelew Farm, LLC v. Commissioner, T.C. Memo 2024-52 (Apr. 25, 2024)]

IRS PLR: Disregarded Entity Election Extension Granted (IRC §7701)

April 26, 2024

The IRS has published a private letter ruling on Section 7701, granting a 120-day extension of time to file Form 8832, Entity Classification Election, to elect to be classified as a disregarded entity for federal tax purposes, effective as of the date intended by its indirect owner. [PLR 202417004]

IRS PLR: Disregarded Entity Election Extension Granted (IRC §7701)

April 26, 2024

The IRS has published a private letter ruling on Section 7701, granting a 120-day extension of time to file Form 8832, Entity Classification Election, to elect to be classified as a disregarded entity for federal tax purposes, effective as of the date intended by its indirect owner. [PLR 202417003]

IRS PLR: Disregarded Entity Election Extension Granted (IRC §7701)

April 26, 2024

The IRS has published a private letter ruling on Section 7701, granting a 120-day extension of time to file Form 8832, Entity Classification Election, to elect to be classified as a disregarded entity for federal tax purposes, effective as of the date intended by its indirect owner. [PLR 202417005]

IRS PLR: Extension of Time to Make Portability Election Granted (IRC §9100)

April 26, 2024

The IRS has published a private letter ruling on Section 9100, granting a 120-day extension of time for the decedent's estate to make a portability election to allow a decedent's surviving spouse to take into account that decedent's deceased spousal unused exclusion (DSUE) amount. [PLR 202417012]

HMRC Projects Billions In Savings From Tax Digitalization Plan

April 26, 2024

The UK tax office predicted its digital tax roadmap would generate £6.38 billion ($7.97 billion) in tax revenue through 2034, a sizable increase from the £3.9 billion it estimated in June 2023.

Featured Resources

COST - Council on State Taxation

Amicus Briefs

Garcia, D. v. American Eagle Outfitters, Inc.

COST’s brief in the Supreme Court of Pennsylvania Western District addresses whether a class action filed under Pennsylvania’s consumer protection laws for alleged overcollections of sales tax should be dismissed.

COST - Council on State Taxation

COST Studies, Articles & Reports

Mandatory Worldwide Combined Reporting: Elegant in Theory but Harmful in Implementation

This paper documents the harmful and unnecessary implications surrounding state adoption of mandatory worldwide combined reporting (MWWCR), by Douglas L. Lindholm and Marilyn A. Wethekam of the Council On State Taxation (COST).

COST - Council on State Taxation

COST Comments & Testimony

Testimony In Opposition to A.B. 2829 – Digital Advertising Services Tax (Assembly Revenue & Taxation Committee)

COST opposes California A.B. 2829, legislation based on Maryland’s digital ad tax, which will create a new, controversial, and untested gross receipts tax on revenues derived from digital advertising services in California, activities that are already sufficiently taxes under California’s income tax regime.