The Internal Revenue Service (IRS) recently issued guidance on the period of limitations for Section 965 of the Internal Revenue Code transition tax-related adjustments of partnerships. Typically, pursuant to Section 6501, the IRS has three years to assess a tax liability for a tax year. However, Section 6501(e)(1)(C) states that if the taxpayer omits from gross income an amount properly includible in income under Section 951(a), the tax may be assessed at any time within six years after the return was filed.
A concerning bill is pending in the California Senate which would require the California state controller's office to make taxpayer information publicly available. The bill would require that the controller post on its website a list of all taxpayers subject to the California corporation tax with gross receipts of $5 billion or more and information about each taxpayer, including tax liability and the amount of tax credits claimed in the previous calendar year.
A recent US Court of Appeals for the 10th Circuit decision underlines the Internal Revenue Service's ability to obtain information that it needs to examine taxpayers' returns using its powerful summons tool. To be successful in defending against a summons, taxpayers must ensure that they have a strong case – for example, non-disclosure based upon a privilege claim.
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) provides relief to taxpayers in certain situations. Some of these provisions may generate refunds for prior years, such as the relaxation of restrictions on the use of net operating losses and interest deductions, as well as the retroactive availability of additional depreciation relating to qualified improvement property.
The latest developments from the Supreme Court should be noted by taxpayers and practitioners. As with the highly contested opinion in Kisor v Wilkie, it is clear that many justices are uncomfortable with granting a high level of deference to government agencies. Deference issues continue to be at the forefront of several tax cases and will likely continue to be highly relevant in forthcoming challenges to many regulations in the wake of tax reform in 2017.