Settlement agreement does not bar all claims for refund

Article Abstract:

A partner filed a lawsuit for a refund despite the fact that he had already given his consent to the treatment of partnership items on his return. In 'Alexander,' the partner got a final partnership administrative adjustment for a single year in which he had held an interest. He likewise was given Form 870-P, otherwise known as Agreement to Assessment and Collection of Deficiency in Tax for Partnership Adjustments, which prevents any claim for refund or credit that has its basis on changes in the treatment of the partnership items. The taxpayer, however, sued for a refund, basing his claim not on treatment of the partnership items but on the statute of limitations. He argued that the status of limitations had run for the year, thereby preventing the IRS from making any adjustments. The court then decided that the refund was allowable.

Cases, Tax accounting, Partnership, Partnerships

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Planning options to structure and fund a buy-sell agreement among close corp. owners

Article Abstract:

When closely held corporations' shareholders sell their stock back to the corporation or to other corporate stockholders, the form of the transaction, the parties involved and the accounting methods used to report the transaction affect the tax treatment of the sale and repurchase. Proper tax planning can avoid treating the income from the sale as capital gains, by allowing such income to be treated as dividend distributions. Tax planning alternatives are discussed, as are proposed tax reforms and their effects on buy-sell stock agreements.

Finance, Dividends, Close corporations, Closely held corporations, Buy-sell agreements, Stock transfer

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