ESBT definitions and distributions
Article Abstract:
IRS Notice 97-49 contains guidelines regarding electing small business trusts (ESBT). According to this Notice, an ESBT is qualified as an S corporation shareholder if it is not a qualified Subchapter S trust or a tax-exempt trust. It also should not be a charitable remainder trust or a charitable remainder annuity trust for tax years after 1996. The allowable beneficiaries of an ESBT are individuals, estates and some charitable organizations holding a contingent interest which are not potential current beneficiaries. To avoid confusion as to who or what is allowed to act as beneficiary, the Notice identifies the types of beneficiaries and current potential beneficiaries that can participate in an ESBT. In addition, the Notice also discusses the ordering of ESBT distributions based on fiduciary accounting income. It states that separate taxation is required for the portion of an ESBT that is made up of S corporation stock. This independent trust incorporates some items only when calculating its taxable income.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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Taxpayer Bill of Rights 2 offers added protection
Article Abstract:
The recent passage of the Taxpayers Bill of Rights 2 (TBOR-2) compels the IRS to honor taxpayer rights when conducting investigations and collecting taxes. It adds more taxpayer rights and protections to supplement those already enforced in 1988 in the first Taxpayers Bill of Rights. Probably the most significant provision of the TBOR-2 is the one amending Sec. 7802 to create the Taxpayer Advocate. This replaces the Taxpayer Ombudsman as the agent responsible for assisting taxpayers in quickly resolving problems with the IRS. The TBOR-2 also reforms the authority and discretion of the IRS in particular collection activities, revises certain provisions on the filing of returns and the IRS' handling of taxpayer remittances, introduces changes to IRS investigations, and provides intermediate penalties for violations of the private inurement rules. Lastly, the bill makes changes with regards to interest, penalties and litigation.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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UNICAP rules for changed status as small reseller
Article Abstract:
The IRS has issued Revenue Procedure 95-33 to explain to taxpayers who do not qualify anymore for the small reseller exemption how to apply the Sec. 263A uniform capitalization (UNICAP) method. In addition, the procedure gives guidance for taxpayers that qualify for the small reseller exemption who discard the UNICAP method and for taxpayers with changes in their eligibility for the simplified resale method. Rev. Proc. 95-33 applies only to taxpayers that file a current Form 3115 with its tax return on the due date and submits a copy of the form with the National Office. It is not applicable to taxpayers that are making a historic absorption ratio election under Reg. 1.263A-2(b)(4) or Reg. 1.263A-3(d)(4).
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1995
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