Question OneDoes the IRS view the cost of laser eye surgery (“LASIK”) as a valid § 213 medical expense deduction – or, alternatively, is it nondeductible cosmetic surgery?
Yes, it is viewed as a valid medical expense deduction as it promotes the proper functioning of the body under § 213(d) (9). (IRS Publication 502, 8) Question Two
Brother and sister operate a farm as a family corporation inherited from their parents. Differences over how the farm should be operated have led to a serious breakdown in their relationship. Is this a sufficient “business purpose” to support a tax-free split-up per § 355?
Yes, it is a sufficient business purpose under §1.355-2(b). (Rev. Rul. 2003-52).
Question Three
TravelCorp. wants to hold a conference for its key customers and suppliers in Palau, which is a small island in the western Pacific Ocean. Will § 274(h) restrictions apply because Palau is thousands of miles away from North America?
No; Rev. Rul. 2011-26
Question Four
Two years ago the FASB promulgated ASU 2014-09, Revenue from Contracts with Customers, prospectively amending U.S. GAAP with respect to revenue accruals. Has the IRS acknowledged this change in GAAP and, if so, how?
No; Notice 2015-40.
Question Five
In connection with the introduction of Schedule UTP in 2010, did the IRS give any indication of whether it planned to routinely ask taxpayers for workpapers and other documents prepared in support of that form? IRS intended to retain the existing policy of restraint for requesting tax accrual work papers. (Announcement 2010-9)
Question Six
Ms. Executive holds 10,000 shares of EmployerCo. restricted stock. Vesting is subject to performance targets that satisfy § 162(m). Are quarterly cash dividends paid on those shares also “performance based” . . . even if paid to Ms. Executive currently? No, the dividends are not performance based because they do not satisfy performance goal requirement § 162(m). (Rev. Rul. 2012-19)
Question Seven
Many individuals who have been victims of identity theft are receiving various forms of identity protection services from retailers or other business organizations whose IT systems were breached. Has the IRS expressed a view as to whether the value of such restorative services provided to identity theft victims will be includible in gross income?
Yes. (Announcement 2015-22)
Question Eight A U.S. taxpayer generally must be an expatriate for an entire year in order to claim the foreign earned income exclusion, but § 911(d)(4) provides an exception for persons forced to leave a foreign country because of war, civil unrest, or similar adverse conditions. What nations have been added to the adverse conditions list most recently?
Burundi. (Rev. Proc. 2016–21)
Question NineCite the IRS announcement of the new “safe harbor” method ($5 per s/f) for calculating and claiming a home office deduction?
IR-2013-5
Question TenAn employer maintains an expense reimbursement plan for employees that allows for, and routinely pays, per diem amounts that are in excess of current federal per diem rates without requiring receipts or other substantiation of actual expenses incurred. Will this qualify as a so-called “accountable plan”?
No; Publication 463 (Internal Revenue Service, 30).
Works Cited
Internal Revenue Service. "Travel, Entertainment, Gift and Car expense." Publication 463 (2015): 2-50. print. https://www.irs.gov/publications/p463/ch06.html
IRS Publication 502. "Medical and Dental Expesnses." Publication 502 (2015): 1-25.Print
https://www.law.cornell.edu/uscode/text/26/213
Rev. Rul. 2003-52. print. https://www.irs.gov/pub/irs-drop/rr-03-52.pdf
Rev. Rul. 2011-26. print. https://www.irs.gov/pub/irs-drop/rr-11-26.pdf
Notice 2015-40. print. https://www.irs.gov/pub/irs-drop/n-15-40.pdf
Announcement 2010-9 print. https://www.irs.gov/pub/irs-drop/a-10-09.pdf
Rev. Rul. 2012-19. print. https://www.irs.gov/pub/irs-drop/rr-12-19.pdf
Announcement 2015-22. print. https://www.irs.gov/pub/irs-drop/a-15-22.pdf
Rev. Proc. 2016–21. print. https://www.irs.gov/irb/2016-14_IRB/ar11.html
IR-2013-5. print. https://www.irs.gov/uac/newsroom/simplified-option-for-claiming-home-office-deduction-starting-this-year
