Section Newsletters

Articles on Taxation

Who wants cake? Section 368 tax-free reorganizations for corporations By Derek P. Usman Federal Taxation, May 2010 By utilizing the reorganization exit strategy, business owners are able to sell their business while deferring their gain.
With great power comes great responsibility—Deferring cancellation of debt income for tax partnerships By Brian A. Smith & William E. Russell Federal Taxation, May 2010 The American Recovery and Reinvestment Act of 2009 became effective on February 17, 2009, and many questions regarding how the cancellation of indebtedness (COI) deferral election applies to partnership situations still remain unanswered.
Does the Voluntary Payment Doctrine trump state unclaimed property laws? By Stanley R. Kaminski & David I. Curkovic State and Local Taxation, April 2010 Under a state’s voluntary payment doctrine, money considered voluntarily paid should not be subject to a state’s unclaimed property law.
“What’s in a name …”—The importance of properly classifying “independent contractors” By Betsy Johnson Corporate Law Departments, April 2010 Studies have shown that companies can save as much as 30% of payroll and related taxes by classifying workers as independent contractors.
The Cook County Board of Review v. The Illinois property tax Appeals Board and Fulton House Condominium Assoc., Ill. App. Ct. , First Dist. ( Sept 30, 2009) By William Seitz State and Local Taxation, March 2010 This case involved the 2003 triennial for the 113-unit Fulton House Condominium.
Practice note: Abatement of tax penalties for reasonable cause: Best practices By David P. Dorner General Practice, Solo, and Small Firm, March 2010 With many states facing historical fiscal deficits and the need for additional revenues, the issue of tax penalties and the abatement of such penalties for reasonable cause have become increasingly relevant.
Why the “25/10 ordinance” should not impact tax load calculations in 2009 property tax appeal cases By Gary H. Smith State and Local Taxation, March 2010 On September 17th, 2008, the Cook County Board adopted ordinance 08-O-51, which amended the levels of assessment for all properties in the county, commencing with the 2009 tax year.
Illinois Supreme Court holds Wal-Mart properly charged sales tax on shipping charges applied to customers’ Internet purchases of tangible personal property By David J. Kupiec & Natalie M. Martin State and Local Taxation, February 2010 On November 19, 2009, The Illinois Supreme Court issued an opinion holding that shipping charges for certain Internet purchases of tangible personal property are subject to the Illinois sales tax.
A review of American Airlines v. Illinois Dept. of Revenue By William Seitz State and Local Taxation, February 2010 On December 18, 2009, the First District issued its decision in American Airlines v. Illinois Department of Revenue (No. 08-2985).
Cook County’s Department of Administrative Hearings: The new kid on the block By Julie-April Montgomery State and Local Taxation, January 2010 In today’s litigious society, more and more matters are being initially handled outside of the courts and in administrative proceedings—specially matters that involve government enforcement, compliance and collection. 
Abatement of penalties for reasonable cause: Best practices By David P. Dorner State and Local Taxation, December 2009 Every state imposes penalties for the failure to file tax or information returns or to pay taxes within the time proscribed by statute. In most instances, however, a state will abate imposed penalties if the taxpayer can demonstrate reasonable cause for the noncompliance.
Congressional support for enhancing the Historic Rehabilitation Tax Credit: ISBA’s Section of Federal Taxation liaison meeting with legislative aides, May 6 & 7, 2009 Federal Taxation, December 2009 The federal Historic Rehabilitation Tax Credit (HTC) Program is the nation’s largest program to stimulate the preservation and reuse of historic buildings. 
Estate tax issues: ISBA’s Section of Federal Taxation liaison meeting with legislative aides, May 6 & 7, 2009 Federal Taxation, December 2009 The debate surrounding the estate tax no longer focuses on eliminating the tax in total. 
Extension of IRC Section 1031: ISBA’s Section of Federal Taxation liaison meeting with legislative aides, May 6 & 7, 2009 Federal Taxation, December 2009 There is a strong link between historic preservation, economic development, housing, and jobs. Abandoned and underutilized historic buildings are often located in some of the nation’s most disinvested communities. 
Offer in compromise: ISBA’s Section of Federal Taxation liaison meeting with legislative aides, May 6 & 7, 2009 Federal Taxation, December 2009 A primary concern is that the OIC program is not being properly utilized by the IRS.
A review of In re Application of the County Collector (A.P. Properties, Inc. v. Ezra Chaim Properties), Appellate Court, Second District, Docket No. 2-08-0755, 2009 WL 2767020, August 27, 2009 By Tara H. Ori State and Local Taxation, December 2009 Homeowner’s property taxes were sold for failure to pay real estate taxes for the year 2003. The taxes were purchased by tax buyer A.P. Properties, Inc. at the tax sale in December 2004.
Taxation of employment-related settlement payments By Elizabeth Erickson & Ira B. Mirsky Employee Benefits, December 2009 In an internal memorandum dated October 22, 2008, but released only in July of this year, the Internal Revenue Service (IRS) Office of Chief Counsel has outlined information necessary to determine the correct tax treatment of employment-related settlement payments. 
Delayed implementation of a statutory amendment necessitated a finding that the Legislature intended to apply the statutory amendment prospectively and that tax objectors were entitled to the pre-amendment interest rate up until the effective date of the By Christopher B. Kaczynski & Jacki Dobesh State and Local Taxation, November 2009 The First District Appellate Court has recently ruled that tax objectors who paid taxes and filed Specific Objection lawsuits prior to amendment of Section 23-20 of the Property Tax Code were entitled to the pre-amendment interest rate up until the effective date of the statutory amendment, even though judgment orders granting statutory interest were entered after the statutory amendment.
2009 Illinois legislation review and update By David Eldridge State and Local Taxation, September 2009 Legislation of interest to state & local tax practitioners.
Taxation by association: Amazon.com law and state taxation of Internet sales By Scott Drago Corporate Law Departments, September 2009 Historically, Internet retailers have not collected state and local sales taxes on sales made through an associate program, provided the Internet retailer itself does not have a sales force or store in a particular state. However, the days of relying on this exemption may be numbered. 
Renegotiating debt? Beware of tax traps By Steven W. Swibel Commercial Banking, Collections, and Bankruptcy, August 2009 In a non-bankruptcy, noninsolvency context, debtors and creditors are often surprised that a debt modification that does not appear to reduce principal or the effective interest rate may nevertheless result in adverse tax consequences.
Estate and gift tax recent cases and rulings By Joseph P. O’Keefe & Elizabeth C. Hesselbach Federal Taxation, July 2009 Recent updates in estate and gift taxes.
IDOR Practitioners’ meetings Q&A State and Local Taxation, July 2009 Questions and answers from the recent Illinois Department of Revenue Practitioners' meeting.
Individual income tax update: Legislation, cases and rulings By Thomas F. Arends & Philip D. Speicher Federal Taxation, July 2009 The following outline is a summary of recent tax legislation and select cases and rulings presented by the Federal Taxation Section Council at its annual Law Ed Program, the 2009 Federal Tax Conference. The materials focus on income tax issues for individuals and sole proprietors. Also included is a summary of the newly enacted American Recovery and Reinvestment Act of 2009.  
Tax updates and opportunities in the current economy By Donna F. Hartl, Justin W. Clark, & Samuel Hans Federal Taxation, July 2009 If utilizing any of these techniques could reduce some clients’ estate tax, then now is the time to consider implementing such a plan with the current depressed market conditions and the looming possibility that legislative action may curtail the effectiveness of these techniques.
Renegotiating debt? Tax traps for creditors By Steven W. Swibel Corporate Law Departments, June 2009 Tax consequences of debt modification are not only a debtor’s concern. Creditors are often surprised that debt modification can result in unanticipated adverse tax consequences. 
Mediation of tax Disputes through the Multistate Tax Commission (MTC) By Lee Christoff State and Local Taxation, May 2009
Illinois Supreme Court holds electricity is “tangible personal property” for purposes of the Illinois Personal Property Tax Replacement Income Tax Investment Credit By David J. Kupiec & Natalie M. Martin Energy, Utilities, Telecommunications, and Transportation, April 2009 At issue in this case is whether the Taxpayer’s 1995 and 1996 investments in property used for generating, transmitting and distributing electricity to customers in Illinois qualified for the .5% investment credit provided under Section 201(e) of the Illinois Income Tax Act.
Clarification to “Inside out—Revaluation of Partnership Capital Accounts” By Michelle L. Heller Federal Taxation, March 2009 In reviewing for publication the article by Derek P. Usman titled “Inside out—Revaluation of Partnership Capital Accounts” published in the December 2008 Newsletter, I started to elaborate on section 754 elections. So, to clarify, the partnership may elect under IRS section 754 to adjust the basis of partnership property “as the result of a transfer of an interest in a partnership by sale or exchange or on the death of a partner” as provided in IRC section 743.
Collection Issues and the IRS—Part III By William M. Gasa Federal Taxation, March 2009 In addition to massive bailouts authorized by our federal government, other federal agencies have taken action to assist citizens. On January 8, 2009, the IRS issued “IRS TAX TIP 2009—Special Edition, IRS Help for Financially Distressed Taxpayers.” Because of the potential impact on everyone representing taxpayers before the IRS, the news release follows in full.  

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