Yearly Archives: 2021

A number of transfer and foreign tax figures are adjusted annually for cost-of-living increases. These adjustments reflect, under a new measure of inflation provided by the Tax Cuts and Jobs Act (TCJA; P.L. 115-97, 12/22/2017), the average chained Consumer Price Index (CPI) for all-urban customers (C-CPI-U) for the 12-month period ending the previous August 31. The August 2021 CPI summary has been released by the U.S. Bureau of Labor Statistics. 

Using the chained CPI for August 2021, and the preceding 11 months, the calculated 2022 indexed amounts for transfer tax and foreign items are:

1. Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2022, the exclusion amount will be $12,060,000 ($11,700,000 for gifts made and estates of decedents dying in 2021).    
2. Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $12,060,000 for transfers in 2022 ($11,700,000 for transfers in 2021).    
3. Gift tax annual exclusion. For gifts made in 2022, the gift tax annual exclusion will be $16,000 ($15,000 in 2021).
4. Special use valuation reduction limit. For estates of decedents dying in 2022, the limit on the decrease in value that can result from the use of special valuation will be $1,230,000 ($1,190,000 for 2021).    
5. Determining 2% portion for interest on deferred estate tax. In determining the part of the estate tax that is deferred on a farm or closely-held business that is subject to interest at a rate of 2% a year, for decedents dying in 2022, the tentative tax will be computed on $1,640,000 ($1,590,000 for 2021) plus the applicable exclusion amount.    
6. Annual exclusion for gifts to noncitizen spouses. For gifts made in 2022, the annual exclusion for gifts to noncitizen spouses will be $164,000 ($159,000 for 2021).    
7. Reporting foreign gifts. If the value of the aggregate "foreign gifts" received by a U.S. person (other than an exempt Code Sec. 501(c) organization) exceeds a threshold amount, the U.S. person must report each "foreign gift" to IRS. (Code Sec. 6039F(a)) Different reporting thresholds apply for gifts received from (a) nonresident alien individuals or foreign estates, and (b) foreign partnerships or foreign corporations. For gifts from a nonresident alien individual or foreign estate, reporting is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year. For gifts from foreign corporations and foreign partnerships, the reporting threshold amount will be $17,339 in 2022 ($16,815 for 2021).    
8. Expatriation. For 2022, an individual with "average annual net income tax" of more than $178,000 ($172,000 for 2021) for the five tax years ending before the date of the loss of U.S. citizenship will be a covered expatriate. (Code Sec. 877(a)(2)(A)) Under a mark-to-market deemed sale rule, all property of a covered expatriate is treated as sold on the day before the expatriation date for its fair market value. However, for 2022, the amount that would otherwise be includible in the gross income of any individual under these mark-to-market rules will be reduced by $767,000 ($744,000 for 2021). (Code Sec. 877A(a)(3))
9. Foreign earned income and housing cost exclusion. The foreign earned income exclusion amount will be $112,000 in 2022 ($108,700 in 2021). The foreign housing cost exclusion will be $15,680 in 2022 (up from $15,218 in 2021).

Have IRS Tax Problems?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-92

Read more at: Tax Times blog

According to Law360, in the case of Denise Sadjian Curcio and Kenneth Curcio v. Commissioner, docket number 5733-19S, the U.S. Tax Court held that a woman wasn't responsible for a liability on taxes she filed with her former husband, because she lacked the tax knowledge to know the liability would be unpaid, the U.S. Tax Court said in a summary opinion.

Denise Curcio isn't responsible for paying off a 2014 tax liability because, even if she had reviewed the return her former husband filed for that year, she wasn't familiar enough with taxes to know an estimated payment on the return was time-barred, the Tax Court said. 

The Tax Court said the Internal Revenue Service decided to allow Curcio innocent spouse relief by the time the case went to trial, but the court had to determine Curcio's eligibility because her former husband argued she was liable. 

Her former husband argued she controlled an account she could have used to pay the liability when the return was filed, the Tax Court said.

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The Internal Revenue Service released guidance on September 1, 2021 that outlined forms on which it would accept electronic signatures, though the forms can be filed only on paper.

To help reduce burden for the tax community, the IRS allows taxpayers to use electronic or digital signatures on certain paper forms they cannot file electronically. The agency is balancing the e-signature option with critical security and protection needed against identity theft and fraud. Understanding the importance of electronic signatures to the tax community, the IRS offers an overview about using them on certain forms.

Types of acceptable electronic signatures

The IRS will accept a wide range of electronic signatures. An electronic signature is a way to get approval on electronic documents. It can be in many forms and created by many technologies. Acceptable electronic signature methods include:

1. A typed name typed on a signature block
2. A scanned or digitized image of a handwritten signature that's attached to an electronic record
3. A handwritten signature input onto an electronic signature pad
4. A handwritten signature, mark or command input on a display screen with a stylus device
5. A signature created by a third-party software

The IRS doesn't specify what technology a taxpayer must use to capture an electronic signature. The IRS will accept images of signatures (scanned or photographed) including common file types supported by Microsoft 365 such as tiff, jpg, jpeg, pdf, Microsoft Office suite or Zip.

E-signatures on certain paper-filed forms

The IRS allows taxpayers and representatives to use electronic or digital signatures on these paper forms, which they cannot file using IRS e-file:

• Form 11-C, Occupational Tax and Registration Return for Wagering;
• Form 637, Application for Registration (For Certain Excise Tax Activities);
• Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
• Form 706-A, U.S. Additional Estate Tax Return;
• Form 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions;
• Form 706-GS(D-1), Notification of Distribution from a Generation-Skipping Trust;
• Form 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations;
• Form 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts;
• Form 706 Schedule R-1, Generation Skipping Transfer Tax;
• Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return;
• Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return;
• Form 730, Monthly Tax Return for Wagers;
• Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit;
• Form 1120-C, U.S. Income Tax Return for Cooperative Associations;
• Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation;
• Form 1120-H, U.S. Income Tax Return for Homeowners Associations;
• Form 1120-IC DISC, Interest Charge Domestic International Sales – Corporation Return;
• Form 1120-L, U.S. Life Insurance Company Income Tax Return;
• Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons;
• Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return;
• Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts;
• Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies;
• Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B);
• Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship;
• Form 1128, Application to Adopt, Change or Retain a Tax Year;
• Form 2678, Employer/Payer Appointment of Agent;
• Form 3115, Application for Change in Accounting Method;
• Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts;
• Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner;
• Form 4421, Declaration – Executor's Commissions and Attorney's Fees;
• Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes;
• Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues;
• Form 8038-G, Information Return for Tax-Exempt Governmental Bonds;
• Form 8038-GC; Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales;
• Form 8283, Noncash Charitable Contributions;
• Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms;
• Form 8802, Application for U.S. Residency Certification;
• Form 8832, Entity Classification Election;
• Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent;
• Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement; and
• Elections made per Internal Revenue Code Section 83(b).

The forms are available at IRS.gov and through tax professional's software products.

Have IRS Tax Problems?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-92

Read more at: Tax Times blog

On August 25, 2021, the Competent Authorities of France and Germany agreed to automatically exchange country-by-country reports with the U.S.

According to the statements released by the Competent Authority of the U.S., French, German, and U.S. laws require multinational enterprise (MNE) groups to annually file a CbC report that conforms to the requirements of Action 13 of the Organization for Economic Cooperation and Development (OECD)/G20 Action Plan on Base Erosion and Profit Shifting (BEPS).

U.S. MNE groups must annually file Form 8975, Country-by-Country Report, with the income tax return of the ultimate parent entity to comply with this requirement. 

The Competent Authorities of The U.S. and France Are Negotiating Agreements To Allow For The Automatic Exchange of CbC Reports Between The U.S. And France and so are
The Competent Authorities of the U.S. and Germany.

Instead of waiting for these negotiations to conclude:

• The Competent Authorities of the U.S. and France have agreed to automatically exchange the CbC reports MNE groups file for fiscal years beginning in calendar 2021. The CbC reports will automatically be exchanged as soon possible after they are received and no later than 15 months after the last day of the fiscal year of the MNE group to which the report relates.

• The Competent Authorities of the U.S. and Germany have agreed to automatically exchange the CbC reports MNE groups file for fiscal years beginning in calendar 2020. The CbC reports will automatically be exchanged as soon possible after they are received and no later than 15 months after the last day of the fiscal year of the MNE group to which the report relates.

The Competent Authorities of France and Germany also intend to notify the U.S. when they perceive an error in a CbC report that may have led to incorrect or incomplete information reporting in the U.S. Similarly, the U.S. Competent Authority intends to notify its counterparts in Germany and France when it perceives an error in a CbC report that may have led to incorrect or incomplete information reporting in those countries. 

Have IRS Tax Problems?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-92

Read more at: Tax Times blog