Daily Tax Update - December 6, 2012: IRS Release Revenue Procedure Regarding Certain Losses Not to be Taken Into Account Under Disclosure Rules

IRS RELEASE REVENUE PROCEDURE REGARDING CERTAIN LOSSES NOT TO BE TAKEN INTO ACCOUNT UNDER DISCLOSURE RULES:  Today, the Service issued Revenue Procedure 2013-11 modifying prior guidance on loss reporting.  Rev. Proc. 2013-11 provides that certain losses are not taken into account in determining whether a transaction is a reportable transaction for purposes of the disclosure rules under Treas. Reg. section 1.6011-4(b)(5).  Under Rev. Proc. 2004-66, a loss under section 165 from the sale or exchange of an asset with a qualifying basis is not taken into account in determining whether a transaction is a  loss transaction under Treas. Reg. section 1.6011-4(b)(5) if the loss is not treated as ordinary under section 988.  Effective December 6, 2012, Rev. Proc. 2013-11 modifies that rule to provide that a loss that is recognized in a section 988 transaction by a bank described in section 581 or section 582(c)(2)(A)(i) is also not taken into account.

IRS WARNS THAT FAILURE TO ACT ON AMT WILL LEAD TO “SIGNIFICANT” DELAYS:  Acting IRS Commissioner Steven Miller said today that if Congress fails to act on the alternative minimum tax (AMT) by the end of the year it will lead to "significant" delays in tax filing.  Miller said, "Taxpayers and the IRS need to know what the tax provisions are for 2012, so that you know what you owe and we know how to process your return in January.  The AMT is part of the current fiscal negotiations in Congress."

  • Meanwhile, House Ways and Means Committee Chairman Dave Camp issued a statement today in reaction to Treasury Secretary Timothy Geithner’s remarks that the Obama Administration is ready to go over the fiscal cliff if tax rates are not increased.  Camp’s statement said, "It is outrageous that the President and Treasury Secretary would prefer to drive this country back into a recession instead of working with Republicans on tax reform – tax reform that can and will raise the revenue they are demanding.  The Administration’s position that rates must go up is not based on policy; it is purely political, and it is a complete reversal of the revenue demands they made just a year ago.  Risking the jobs of hundreds of thousands of middle-class Americans for political gain is no way to run a country.  Republicans have been clear:  we don’t like raising revenue, but we are willing to work with the President on a balanced approach to avoid the fiscal cliff.  However, revenue should be raised from comprehensive tax reform that strengthens our economy, not higher tax rates that every credible study says will cost middle-class Americans their jobs.”

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:  As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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