Printer Friendly

Attorney who prepared partnership returns was "preparer" of limited partners' returns.

Goulding, a CPA and attorney, was legal counsel for three tax-shelter-type limited partnerships. He prepared the partnership returns and the schedules K-1. Goulding had no contact with the limited partners, did not advise them on partnership deductions and did not prepare their individual tax returns.

The IRS said Goulding was a "preparer" of the schedules K-1 and assessed penalties against him for negligent preparation of the K-1s (under the prior-law version of IRC section 6694).

The IRS relied on regulation 301.7701-15(b)(3) to judge Goulding a preparer. Goulding, however, claimed the regulation was invalid, and he could not have been a preparer of the limited partners' returns because a single entry from the K-1 could not constitute a "substantial portion" of a return [as required by section 7701(a)(36)] and because the limited partners did not compensate him.

Result: For the IRS. The regulation is valid. Goulding was a preparer of the limited partners' returns.

AT THE SUPREME COURT

Here are two of the tax cases the Supreme Court recently agreed to review.

* Newark Morning Ledger Co. The Third Circuit Court of Appeals disallowed depreciation deductions a newspaper publisher had claimed on a list of current subscribers. The publisher had bought the list as part of the acquisition of a publishing corporation.

* Soliman. In this home-office-deductions case, the Fourth Circuit Court of Appeals upheld the Tax Court's "facts and circumstances" approach to whether a home office is a taxpayer's "principal place of business."

A self-employed anesthesiologist was allowed to deduct home office expenses even though he didn't see patients in his home. Instead, he spent two to three hours in the home office performing administrative tasks. The hospitals at which he rendered services to patients did not provide him with an office, and the administrative tasks were essential to his practice. (See "Lifting the Cloud on Home Office Deductions," by Victor Cuciniello, JofA, July91, page 41).
COPYRIGHT 1992 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Author:Wagenbrenner, Anne
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jun 1, 1992
Words:319
Previous Article:Harsh result for intra-family notes that cancel at death.
Next Article:Tax return preparer fees.
Topics:


Related Articles
The search for enforceable tax practice standards.
Sec. 6694 tax preparer penalties: a look at Chapter 11 of the Consolidated Penalty Handbook.
The tax practitioner's guide to Circular 230.
Choosing the right tax professional.
Frederick complicates tax practitioner privilege.
Tax practice standards for the new millennium.
AICPA alert on IRS RAL program.
IRS approves third-party checkbox initiative.
IRS unveils initiative to solve processing problems.
Reasonable inquiry required to avoid tax-preparer penalties.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters