SUMMARY: Seventh circuit adopts broad shelter exception to tax practitioner-client privilege; upholds IRS summons.

TOPIC: Privileges and workpapers

SECTION: 7525. Confidentiality privileges relating to taxpayer communications

CITATION: Valero Energy Corporation v. U.S., 569 F3d 626 (7th Cir 2009)

DATE: 2009-06-16

DOC TYPE: Cases

EXPLANATION:

SUMMARY: Ninth circuit affirms overstated basis does not trigger extended limitations period.

TOPIC: Statute of Limitations

SECTION: 6229. Period of limitations for making assessments

CITATION: Bakersfield Energy Partners, LP v. Commissioner, 568 F3d 767 (9th Cir 2009)

DATE: 2009-06-16

DOC TYPE: Cases

EXPLANATION:

SUMMARY: Claims court clarifies gross valuation misstatements in transactions lacking economic substance.

TOPIC: Penalties - Tax Returns

SECTION: 752. Treatment of certain liabilities

CITATION: Clearmeadow Investments, LLC, v. U.S. 2009-1 U.S.T.C. 50,449, (Ct Cl 2009)

DATE: 2009-06-16

DOC TYPE: Cases

EXPLANATION:

SUMMARY: IRS updates procedures for consent to treat intercompany transactions on separate entity basis.

TOPIC: Consolidated Returns

SECTION: 1502. Regulations

CITATION: Rev. Proc. 2009-31, I.R.B. 2009-27, June 16, 2009

DATE: 2009-06-15

DOC TYPE: Revenue Procedure

EXPLANATION:

SUMMARY: IRS wins victory in student FICA exception for medical residents case.

TOPIC: Withholding

SECTION: 3401. Definitions

CITATION: Mayo Foundation for Medical Education and Research v. U.S., 568 F3d 675 (8th Cir. 2009)

DATE: 2009-06-11

DOC TYPE: Cases

EXPLANATION:

SUMMARY: Regs tighten restrictions on corporate inversion transactions.

TOPIC: Foreign Tax Issues

SECTION: 7874. Rules relating to expatriated entities and their foreign parents

CITATION: T.D. 9453 (Jun. 10, 2009)

DATE: 2009-06-09

DOC TYPE: Treasury Decisions (Regulations)

EXPLANATION:

SUMMARY: Foreign tax credit regs address look-through of dividends from noncontrolled corporations.

TOPIC: Foreign Tax Issues

SECTION: 861. Income from sources within the United States

CITATION: T.D. 9452 (Jun. 10, 2009)

DATE: 2009-06-09

DOC TYPE: Treasury Decisions (Regulations)

EXPLANATION:

SUMMARY: Tax court has jurisdiction for claimed partnership losses; deficiency notice not premature.

TOPIC: Practice and Procedure

SECTION: 465. Deductions limited to amount at risk

CITATION: Meruelo v. CIR, 132 T.C. No. 18 (2009)

DATE: 2009-06-09

DOC TYPE: Cases

EXPLANATION: