Top Federal Tax Issues for 2009 CPE Course Book

Module 1 Dealing with a Changing Economy

1 This Year's Tax News and Legislation

Learning Objectives 1.1

Introduction 1.1

Economic Stimulus Act of 2008 1.2

Housing And Economic Recovery Act of 2008 1.6

Mortgage Forgiveness Debt Relief Act of 2007 1.12

Heroes Earnings Assistance and Relief Tax Act of 2008 1.14

Farm Act 1.18

AMT Patch 1.20

Emergency Economic Stabilization Act of 2008 1.21

2001 Tax Cuts 1.23

Conclusion 1.24

2 Mortgage Workouts and Foreclosures: Tax Alternatives and Consequences

Learning Objectives 2.1

Introduction 2.2

Principal Residence 2.2

Debt Forgiveness Income 2.5

Status of the Mortgage(s) 2.12

Foreclosures and Related Situations 2.14

Timing of Debt Income Recognition 2.17

Form 1099-C, Cancellation of Debt, Due Diligence 2.18

Sale of the Mortgaged Residence 2.19

Conclusion 2.24

3 Tax Relief for a Business in Distress

Learning Objectives 3.1

Introduction 3.1

How Accounting Basics Apply to Business Losses 3.2

Tax Accounting 3.5

Bad Debts: Code Section 166 3.13

Treatment of Losses 3.19

Impact of the Emergency Economic Stabilization Act of 2008 on Businesses Having Financial Difficulties 3.25

Module 2 Small Business Planning

4 Limited Liability Companies: Traps and Opportunities

Learning Objectives 4.1

Introduction 4.1

Definition and Characteristics of Limited Liability Companies 4.2

LLC Formation 4.3

LLC Operating Agreement 4.3

Management 4.4

Electing the Type of Entity 4.5

Advantages of LLCs 4.7

Comparative Advantages of LLCs 4.11

Disadvantages of LLCS 4.12

Current Tax Issues Associated With the LLC 4.15

Conclusion 4.24

5 Retirement Savings for SmallBusinesses

Learning Objectives 5.1

Introduction 5.1

Types of Benefit Plans 5.2

Why Have a Qualified Retirement Plan? 5.4

General Features of All Qualified Retirement Plans 5.5

Establishing a Qualified Plan 5.8

Qualified Plan Administration 5.10

Plan Termination 5.15

General Types of Qualified Plans 5.16

401(k) Plans 5.20

IRA-Based Plans 5.27

Keogh Plans 5.37

Conclusion 5.38

Module 3 Tax Reporting in Transition

6 Revised Form 990 and Instructions Create New Compliance Challenges for Tax-Exempt Organizations

Learning Objectives 6.1

Introduction 6.1

Revised Core Form and Schedules 6.3

Variations of Form 990 6.4

Disclosure 6.7

Core Form: Basic Information (Parts I Through V) 6.8

Financial Operations 6.10

Programs of Exempt Organizations 6.15

Governance (Core Form, Part VI) 6.20

Compensation (Core Form, Part VII, Schedules J, L, R) 6.22

Hospitals (Schedule H) 6.30

Supplemental Information on Tax-Exempt Bonds (Schedule K) 6.32

Campaign Activities (Schedule C) 6.33

Schools (Schedule E) 6.33

Conclusion 6.34

7 Worker Classification

Learning Objectives 7.1

Introduction 7.1

Classification as an Employee or Independent Contractor 7.2

IRS Factors for Control of Services by Employees Versus Independent Contractors 7.7

Employment Tax Obligations 7.16

Enforcement Efforts 7.21

Consequences of Misclassification 7.25

Pending Legislation 7.28

Conclusion 7.29

8 New Preparer Penalty Standards

Learning Objectives 8.1

Introduction 8.1

Old Standard 8.2

Small Business and Work Opportunity Tax Act of 2007 8.5

Emergency Economic Stabilization Act of 2008 8.16

Conclusion 8.22

Answers to Study Questions 9.1

Index 10.1

CPE Quizzer Instructions 11.1

CPE Quizzer: Module 1 11.3

CPE Quizzer: Module 2 11.11

CPE Quizzer: Module 3 11.17

Module 1 Answer Sheet 11.25

Module 2 Answer Sheet 11.29

Module 3 Answer Sheet 11.33

Evaluation Form 11.37