New Due Diligence Requirements Impose Hefty Burdens on Tax Practitioners
As we await the election of a new president, tax professionals face new Due Diligence Requirements imposed by the Protecting Americans from Tax Hikes (PATH) Act of 2015. These requirements could possibly have more of an impact early in our new president’s administration than whoever is elected, especially during those first few days in office.
When signed into law on December 18, 2015, the “Due Diligence Checklist” expanded from just the Earned Income Tax Credit to include the Child Tax Credit and the American Opportunity Credit. Although “Due Diligence” has always been a part of Circular 230, “Due Diligence” has now become a standard of practice.
The new draft of Form 8867 has been renamed the Paid Preparer’s Due Diligence Checklist. It incorporates the Earned Income Credit, Child Tax Credit, and the American Opportunity Credit due diligence into one form of two pages. But, there are also worksheets for all three credits that need to be completed, and Form 8863, Education Credits, which has yet to be released, to be filled out.
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TaxPlace July Offerings
Speaking of TaxPlace, check out all of our new offerings for the month. All replays and articles are available to subscribers. A one-year subscription is still just $150/year. Check it out!
July 27, 2016 Webinar Replay - Injured Spouse
July 21, 2016 Webinar Replay - ROTH IRAs
July 19, 2016 Webinar Replay - Select Adjustments to Income
July 15, 2016 Webinar Replay - Your Client Dies, What’s Next?
July 14, 2016 Webinar Replay - Innocent Spouse
July 7, 2016 Webinar Replay - Preparing for a Gambling Audit
July 6, 2016 The Scoop - July 6, 2016
July 5, 2016 Webinar Replay - Travel, Meals and Entertainment
Baur Redux: Iowa Court of Appeals Says No Oppression
The Iowa Court of Appeals issued its opinion July 27, 2016, in the seemingly never-ending Baur Farms litigation. The court affirmed the district court’s order, which dismissed the minority shareholder’s lawsuit seeking to dissolve the corporation on grounds of “shareholder oppression.” This case was before the district court on remand after the Iowa Supreme Court issued its key 2013 ruling setting forth the new Iowa standard for minority shareholder oppression in the context of a closely-held corporation:
The determination of whether the conduct of controlling directors and majority shareholders is oppressive under section 490.1430(2)(b) and supports a minority shareholder’s action for dissolution of a corporation must focus on whether the reasonable expectations of the minority shareholder have been frustrated under the circumstances...We hold that majority shareholders act oppressively when, having the corporate financial resources to do so, they fail to satisfy the reasonable expectations of a minority shareholder by paying no return on shareholder equity while declining the minority shareholder’s repeated offers to sell shares for fair value.
Continue reading here.
Iowa Fence Requirements: A Legal Review
This month, we are providing a new overview of Iowa Fence Law designed to provide a comprehensive look at fence requirements applying to landowners and livestock owners. It is available in an easy-to-print or download PDF file.
Iowa fence law has long sought to protect agricultural interests. Iowa fencing statutes date from earliest times, predating the Iowa Code of 1851. Of the current Iowa fence statute, Iowa Code ch. 359A, the Iowa Supreme Court has stated, “It is difficult to imagine a more deeply rooted Iowa statutory provision.”
Iowa landowners have no common law duty to fence their property. Instead, Iowa Code § 359A.1A imposes a conditional statutory duty:
Respective owners of adjoining tracts of land shall upon written request of either owner be compelled to erect and maintain partition fences, or contribute thereto, and keep the same in good repair throughout the year.
Consequently, if one landowners sends a “written request” to an adjoining landowner, asking that a partition fence be erected or maintained, that adjoining landowner must erect, maintain, or contribute to the cost of that fence. It is important to realize that this obligation does not flow from livestock ownership. A landowner owning no livestock can require an adjacent landowner to erect and maintain a partition fence. Likewise, a landowner owning livestock can require his non-livestock-owning neighbor to contribute to erecting and maintaining the partition fence.
Download the full article here.
Mandatory Agricultural Mediation in Iowa
Mediation is a form of alternative dispute resolution designed to draw conflicts to a close without costly and time-consuming litigation. Typically, a neutral third-party mediator works with two sides to a dispute in an attempt to reach an agreement that is acceptable to both parties. If a mediation agreement is signed, the parties are bound by the terms, as they would be bound by any contract.
To protect sometimes vulnerable farming interests, Iowa law has long required mediation for certain types of farm disputes. This fact sheet provides a general overview of Iowa’s requirements for mandatory agricultural mediation.
Since the time of the farm crisis in the mid 1980’s, Iowa law has provided that creditors may not initiate proceedings to enforce a debt respecting “agricultural property” without first attempting to mediate the dispute.
Continue reading here.
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Register for One of Our Upcoming Seminars!
September Seminars: Navigating Changing Times
Fall is fast approaching and we hope you'll join us at one of our educational seminars. On September 8-9, 2016, we present our September Seminars: Navigating Changing Times. Day one is devoted to agricultural law issues and day two is focused on agricultural tax issues. This annual event will be held at the Quality Inn & Suites and Ames. There is a complimentary reception the evening of September 8. Check out the agenda providing a detailed list of topics and speakers and register today!
43rd Annual Federal Income Tax Schools
We're also accepting registrations for our 43rd Annual Federal Income Tax Schools, offered at eight locations across Iowa. Topics Included in this years sessions include:
Ethics (Offered as an early-bird option)
- New Due Diligence Requirements
- Protecting Sensitive Electronic Data
- Clergy and Amish Requirements
- Employer Provided Autos and Airplanes
- Household Caregivers
- Fantasy Football
- Innocent Spouse Relief
- Charitable Contributions
- Tangible Property Regulations Update
- Rental Property
- Casualty Gains and Losses
- Schedule K-1
- Independent Contractor v. Employee
- Tax Benefit Rule and Taxation of State Credits
Business Entity Issues
- S Corporation Tax Issues
- Partnership IRC § 751(b) Regulations
- New Partnership Audit Rules
- Partnership that Owns a Disregarded Entity
- IRC § 754 Basis Adjustment
- New 501(c)(4) Filing Requirements
Affordable Care Act
- 2016 Update
Related Party Issues
Death of a Taxpayer
Penalties and Defenses
Foreign Tax Issues
Agriculture and Natural Resource Issues
Other July Happenings
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.