Revise tax planning for charitable remainder trusts

Article Abstract:

Tax advisors should revise their strategies for charitable remainder trusts in the wake of the passage of the Taxpayer Relief Act (TRA) of 1997 and the IRS's proposed regulations on various charitable remainder trust issues. TRA amended several provisions that have direct or indirect effects on the use of charitable remainder trusts. For instance, Section 664(d) of the act restricts the annuity or unitrust amount to not more than 50% and the charitable remainder trust interest to 10% or higher of the amount transferred to the trust. The TRA provisions also result in less discretion for taxpayers in setting distribution levels. The IRS regulations, on the other hand, affect flip unitrusts, the timing of payments, appraisal of unmarketable assets, retained interest gifts and allocation of gain to income.

Educational, religious, etc. trusts, Educational, Religious, Charitable Trusts, Grantmaking Foundations, Charitable trusts, Charitable remainder trusts

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New law empowers taxpayers in collection disputes

Article Abstract:

The Internal Revenue Service Restructuring and Reform Act of 1998 supports the provision of detailed data about the amounts sought by the IRS from taxpayers. The act integrates changes to the process of determining and collecting interest and penalties which allowed taxpayers to contest liens and levies. It also features a codification of statutory rights and restrictions that increased the IRS' exposure to civil liability under Section 7433 and allowes the recovery of damages when an IRS or employee valuates any Code provision related to tax collection. In addition, the act requires the Joint Committee on Taxation and the Treasury to perform separate studies to evaluate the IRS' administration of the interest and penalty provisions of the Code.

Finance, taxation, & monetary policy, Internal Revenue Service

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President's budget proposal affects taxpayer rights

Article Abstract:

Pres Bill Clinton's budget proposals for 1999 have several provisions designed to respect taxpayer rights and uphold fairness in tax law administration. Among these provisions is a requirement that the IRS should net a taxpayer's overpayments and underpayments to eliminate any difference in interest rates. The budget proposals also provided provisions on when IRS collection must be suspended even as clarifications were made on the joint tax liabilities of married taxpayers. In protecting taxpayer rights, the President's proposals also clarified how taxpayers who feel harassed due to IRS action can seek relief from a Taxpayer Assistance Order or how they can refuse an extension of limitations period on assessments and collection periods.

Clinton, Bill, Budget, Budgeting, Budgets, Tax policy, 1999 AD

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