Vol. 37 No. 2 - Winter 2018

Estate Portability: Sowers Reap Unexpected Harvest in Estate of Sower v. Commissioner

By James Lynch, Sobel & Co., LLC, Livingston, NJ

In 2010, Congress introduced into the tax code the concept of portability for certain estates. Each estate has an applicable exclusion amount. Under portability, the executor of the estate of a deceased spouse may elect to give the surviving spouse that deceased spouse’s unused applicable exclusion amount (DSUE). In the recent case of Estate of Sower v. Commissioner, the Tax Court provided some guidance on the audit of the return of the first deceased spouse.

Agency Policy Challenges: A Different Way to Fight an Assessment

By Jeanette Moffa, Law Offices of Moffa, Sutton & Donnini, PA

When challenging an assessment, arguments can range from procedural to substantive. Perhaps the auditor miscalculated or failed to properly sample a taxpayer’s records. Alternatively, perhaps the auditor assessed on transactions that are not taxable under state law. While challenging the assessment directly is certainly the most straightforward approach to reducing a tax liability, another option may exist in states to challenge the taxing agency itself.

Parsing the New Interest Expense Limitation in the Tax Cuts and Jobs Act

By Daniel M. Reach, Alston & Bird LLP, Charlotte, NC

In signing into law the legislation commonly referred to as the “Tax Cuts and Jobs Act” or the “TCJA,” President Trump made good on threats in recent proposals to curb the tax advantages of business leverage. New section 163(j), which replaces the old “earnings stripping” rules, generally limits deductions for net interest expense of a business.

Reasonable-Reliance Defense and Work Product Protection

By Guinevere Moore, Johnson Moore LLC, Chicago, IL

In Estate of Marion Levine v. Commissioner, Docket No. 13370-13, the United States Tax Court issued a designated Order that granted the petitioner’s motion to limit the scope of an IRS subpoena duces tecum served on petitioner’s prior counsel.

1986 v. 2017? No Comparison

By Jasper L. Cummings, Jr., Alston & Bird, LLP, Charlotte, NC

The Tax Reform Act of 1986, which produced the Internal Revenue Code of 1986, was a huge success for the democratic process. It was not the last (mostly) bipartisan tax bill, but it was at the crest of a hill from which a long downhill slide began. At the end of the slide is the 2017 budget reconciliation act, which was so one-sided and political that it could not even hold onto its politicized original title: The Tax Cuts and Jobs Act. How did we get here?

Co-Recipients of the 2018 Janet R. Spragens Pro Bono Award: Kathryn Sedo and Dale Kensinger

By Leslie Book, Professor Law, Villanova University Charles Widger School of Law, Villanova, PA

As current chair of the Tax Section’s Pro Bono Award Committee, it is my privilege to announce that this year’s co-recipients of the Janet R. Spragens Pro Bono Award are Kathryn Sedo and Dale Kensinger.

Interview with Erika Nijenhuis

By Thomas D. Greenaway, KPMG LLP, Boston, MA

Erika Nijenhuis is a partner in Cleary Gottlieb Steen & Hamilton’s New York office. She is a recognized expert in tax issues relating to derivatives and other financial products, capital market transactions, and inbound and outbound business operations.

Avoiding Related-Party Traps under the Tax Cuts and Jobs Act

By Alfred Bae, Ernst & Young, Houston, TX, and Vivek Chandrasekhar, Roberts & Holland LLP, New York, NY

Public Law 115-97, colloquially known as the Tax Cuts and Jobs Act (the 2017 Act), has introduced several new provisions to the Internal Revenue Code. Unsurprisingly, these new provisions rely on longstanding concepts in the tax law, including the concept that related-party transactions will be subject to extra scrutiny. This short article discusses two provisions within the 2017 Act—a modification to section 168(k) and new section 199A—and describes how the related-party rules apply to these provisions.

Hobby Losses Versus Section 199A Deductions

By Charles Roarty, Wayne State University Law School J.D. Student

Determining whether an activity is a trade or business under section 162 or a hobby under section 183 can be difficult due to the fact-intensive nature of the inquiry. Section 183(b) limits deductions for hobby activities that lack a profit motive to income and gains from the activity.

Winners of the 17th Annual Law Student Tax Challenge

The Section is pleased to announce the winners of the 17th Annual Law Student Tax Challenge, a contest designed to give students an opportunity to research, write about, and present their analyses of a real-life tax planning problem.

In the Name of Reform

By Robert S. Steinberg, Law Offices of Robert S. Steinberg, Palmetto Bay, FL

To the tune of “Lost in the Stars,” from the Broadway Show of the same name, by Kurt Weil and Maxwell Anderson (1949).

Call for Book Reviews

ATT welcomes the submission of book and article reviews on tax topics that may be of interest to our members.

Report of the Nominating Committee: 2018-2019 Nominees

In accordance with Sections 4.2, 6.1, and 6.3 of the Section of Taxation Bylaws, nominations have been submitted by the Nominating Committee for terms beginning at the conclusion of the 2018 Annual Meeting in August.

Government Submissions Boxscore

Government submissions are a key component of the Section's government relations activities. The full archive is available to the public on our website.

New: Guide to Multijurisdictional Admission to Practice Requirements for State and Local Tax Lawyers

A project of the State and Local Taxes Committee, this guide synthesizes the admission to practice requirements faced by state and local tax lawyers representing clients in informal and formal administrative matters and in litigation in each state.

Coming Soon: New Edition of Effectively Representing Your Client Before the IRS

A new edition of Effectively Representing Your Client Before the IRS is now available to pre-order!

TaxIQ: 2018 Midyear Meeting Materials Available

Did you know that Tax Section members have access to thousands of pages of cutting-edge committee program materials presented at Section of Taxation Meetings?

The Tax Lawyer – Winter 2018 Issue Is Available

The Tax Lawyer, the nation’s premier tax law journal, is published quarterly as a service to members of the Tax Section.

The Practical Tax Lawyer – February 2018 Issue Is Available

Produced in cooperation with the Tax Section and published by ALI-CLE, The Practical Tax Lawyer offers concise, practice-oriented articles to assist lawyers with all aspects of tax law.

Support the Section’s Public Service Efforts with a Contribution to the TAPS Endowment

Through the Tax Assistance Public Service (TAPS) endowment fund, the Section of Taxation seeks to provide stable, long-term funding for its tax-related public service programs.

Get Involved in ATT

ABA Tax Times (ATT) is looking for volunteers to join its ranks as associate editors to assist in writing and acquiring articles for publication.

Section Meeting & CLE Calendar

ABA Tax Section meetings are a great way to get connected, get educated, and get the most from your membership!

IRS Nationwide Tax Forums

Registration for the 2018 IRS Nationwide Tax Forums is now open.

3rd International Conference on Taxpayer Rights

The National Taxpayer Advocate of the U.S. Internal Revenue Service is convening the third International Conference on Taxpayer Rights in Amsterdam.

Section CLE Products

Listen at your convenience to high-quality tax law CLE on a variety of topics.

Sponsorship Opportunities

Opportunities are available to enhance your visibility, grow your network, and expand your reach at ABA Section of Taxation meetings.

2018 Midyear Meeting Sponsors

The Section of Taxation thanks the sponsors and exhibitors of the 2018 Midyear Meeting.

Thomson Reuters | Publishing Sponsor

Thomson Reuters Checkpoint Catalyst™ delivers tax research framed in an entirely new way, so you see the clarity, color and context you need to get the whole picture of each business tax issue.