Red Flag Warning

So you say you’re a corporation and you want to take an “aggressive” position with regard to something you’re doing for tax purposes.

            Nothing new – folks have been doing this for years.  And also for years, the Revenooers have had rules in place which make it necessary for the “aggressor” to notify the tax chaps of the transaction(s) in question.

            But apparently that’s not enough for the IRS – recent proposed regulations will require certain corporations to actually attach to their returns Schedule UTP (“Uncertain Tax Position Statement”) to formally put the blokes on notice to look for the consequences of the aggressive transaction in question.  They don’t have to find it on their own, in the course of any audit they may conduct.  We and thee have to give them a more formal (than previously required) roadmap.

            Not that tax accounting is a game, suitable for only the Sherlock Holmes’ among us and the government gumshoes, but doggone it, why is it necessary for a taxpayer to stand up and wave a flag in front of government auditors’ collective noses, and lead them to the nuts and bolts of legal (though perhaps “aggressive”) transactions reflected in the taxpayer’s books and records?  Haven’t those auditors gone through the same education and training as the taxpayer accountants?  Don’t they already know how to look for (indeed, “uncover”) transactions on their own?

            Balderdash!

            And if  you’re into the income tax consequences of purchasing certain “over the counter” drugs and other pharmaceutical remedies, take note of the “Affordable Care Act” (otherwise known as the Obama/Reid/Pelosi universal health care measure) of March 23, 2010.

            Such measure makes it clear that as of January 1, 2011, unless prescribed by your doc, or insulin, the cost of over-the-counter medicines cannot be reimbursed by flexible spending accounts, health reimbursement arrangements, health savings accounts and Archer Medical Savings Accounts.

            Nice.  Isn’t “universal” health care already wonderful?  Where else, but in America, can you find such freedom-loving treatment from your Alma Pater, Uncle Sam?

            And if you’re a partnership or trust, make sure you file your 2009 income tax return(s) by September 15 if you had previously filed an extension earlier this year.  You certainly wouldn’t want your government overseers to slap you with a late filing penalty, now would you?

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation..

            Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He is also a contributor to the recently published 13th edition of Tax Savvy for Small Business, published by Nolo.  He can be reached at 831-7288, and welcomes comments 

So you say you’re a corporation and you want to take an “aggressive” position with regard to something you’re doing for tax purposes.

            Nothing new – folks have been doing this for years.  And also for years, the Revenooers have had rules in place which make it necessary for the “aggressor” to notify the tax chaps of the transaction(s) in question.

            But apparently that’s not enough for the IRS – recent proposed regulations will require certain corporations to actually attach to their returns Schedule UTP (“Uncertain Tax Position Statement”) to formally put the blokes on notice to look for the consequences of the aggressive transaction in question.  They don’t have to find it on their own, in the course of any audit they may conduct.  We and thee have to give them a more formal (than previously required) roadmap.

            Not that tax accounting is a game, suitable for only the Sherlock Holmes’ among us and the government gumshoes, but doggone it, why is it necessary for a taxpayer to stand up and wave a flag in front of government auditors’ collective noses, and lead them to the nuts and bolts of legal (though perhaps “aggressive”) transactions reflected in the taxpayer’s books and records?  Haven’t those auditors gone through the same education and training as the taxpayer accountants?  Don’t they already know how to look for (indeed, “uncover”) transactions on their own?

            Balderdash!

            And if  you’re into the income tax consequences of purchasing certain “over the counter” drugs and other pharmaceutical remedies, take note of the “Affordable Care Act” (otherwise known as the Obama/Reid/Pelosi universal health care measure) of March 23, 2010.

            Such measure makes it clear that as of January 1, 2011, unless prescribed by your doc, or insulin, the cost of over-the-counter medicines cannot be reimbursed by flexible spending accounts, health reimbursement arrangements, health savings accounts and Archer Medical Savings Accounts.

            Nice.  Isn’t “universal” health care already wonderful?  Where else, but in America, can you find such freedom-loving treatment from your Alma Pater, Uncle Sam?

            And if you’re a partnership or trust, make sure you file your 2009 income tax return(s) by September 15 if you had previously filed an extension earlier this year.  You certainly wouldn’t want your government overseers to slap you with a late filing penalty, now would you?

        CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation..

        Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He is also a contributor to the recently published 13th edition of Tax Savvy for Small Business, published by Nolo.  He can be reached at 831-7288, and welcomes comments below.

           

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