New substantiation regs. will save millions of hours
Article Abstract:
Proposed and Temporary Regulations introduced by the IRS has increased the substantiation threshold for travel, entertainment, gifts and listed property to $75 from just $25. This revision is anticipated to shorten the time taxpayer expend on recordkeeping by as much as 12.5 hours. The Temporary Regulations, which are applicable to expenses after Sep. 30, 1995, became effective on Mar. 25, 1997. Employees who receive reimbursement for Sec. 274(d) expenses through an expense allowance or other schemes are required to account to their employers. This calls for substantiation of the expenditures, which cover amounts directly or indirectly charged to the employer via credit cards, with supporting documentation complying with Temp. Reg. 1.274-5T(c)(2)(iii). The Temporary Regulations establish the table for future liberalization by allowing discretionary authority to the IRS.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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IRS rechecks its position on completed gifts
Article Abstract:
The IRS has relaxed its position on the year in which year-end gift checks sent to non-charitable donors can avail of the annual gift exclusion. In Rev. Rul. 96-56, 1996-50 IRB-7, the Service now considers a delivered check as a completed gift for tax purposes on the earlier of two dates. One of these is the date that the donor becomes unable to take the gift back under local law. The other is the date the recipient deposited, cashed or presented the check for payment, provided that several conditions are satisfied. These conditions include the unconditional delivery of the check, the intention of the donor to make a gift, and the deposit, encashment or presentation of the check in the calendar year for which the completed gift status is sought.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
User Contributions:
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