Daily Tax Update - June 9, 2014: IRS Issues Final Circular 230 Regulations

IRS ISSUES FINAL CIRCULAR 230 REGULATIONS:  Today, the IRS issued final regulations revising the rules governing practice before the Internal Revenue Service.  Among other changes, the final regulations remove the “covered opinion” standards for written advice.  The regulations are effective June 12.

The regulations can be accessed via: [TD 9668].pdf

SUPREME COURT DENIES CERTIORARI IN WELLS FARGO CASE: The United States Supreme Court decided not to review the Eighth Circuit’s decision in WFC Holdings Corp. v. United States, 728 F.3d 736 (8th Cir. 2013).  The case involved a lease restructuring transaction that resulted in approximately $423 million of capital losses in 1999.  Although the district court found that the transaction complied with the requirements of sections 357(b) and 351, the court disallowed the losses based on the economic substance doctrine.  The Eighth Circuit upheld the district court’s decision and agreed that the transaction lacked economic substance and a nontax business purpose.