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TAX MATTERS

gives the IRS discretion to enter into an did not submit evidence they would on those issues. However, it denied the
installment agreement if it determines meaningfully affect his ability to pay his IRS’s motion for summary judgment on
that the agreement will facilitate full or tax debts. Under Kelly’s circumstances, whether Kelly was entitled to penalty
partial collection of a taxpayer’s unpaid the court found the IRS did not abuse relief based on reasonable cause.
liability. Under IRS guidelines, the its discretion in refusing to withdraw ■ Kelly, T.C. Memo. 2022-73
taxpayer must be in compliance with the NFTLs.
current requirements with respect to Holding: The court held that the IRS — Hannah Pitstick is a writer with the
filing, withholding, and estimated tax did not abuse its discretion in denying Association of International Certified
payments. The court noted that the Kelly’s request for a first-time abate- Professional Accountants.
record showed Kelly had not paid his ment, an installment agreement, and an
full tax liability for 2019 or estimated NFTL withdrawal, and it granted the To comment on this column, contact
taxes for 2020, so the IRS did not act IRS’s motion for summary judgment Paul Bonner, the JofA’s tax editor. ■
arbitrarily or capriciously in rejecting
the PPIA.
Kelly also requested the NFTL fil- LINE
ings be withdrawn, arguing the tax lien ITEMS
would adversely affect his employment
prospects as a securities broker, causing
“significant hardship” and hindering his
ability to pay his taxes. Consequently, A deeper dive into the Inflation Reduction Act’s tax provisions
he argued, withdrawal was warranted The new law’s provisions include new corporate taxes, additional IRS funding,
because it would facilitate the collec- and numerous tax incentives related to clean energy.
tion of tax. The court called Kelly’s
claim of loss of future income “entirely A closer look at tax items in the Inflation Reduction Act
speculative” and noted that although (podcast)
he submitted evidence that the NFTL Adam Schrom, CPA, director of product management at Bloomberg Tax,
filings had caused him to lose his examines the new corporate minimum tax, the stock buyback tax, implications of
securities registration in two states, he increased IRS funding, and more in this 27-minute JofA podcast.

Financial planning impacts of the Inflation Reduction Act
The act’s extension through 2025 of widened eligibility for the Sec. 36B premium
Foreign countries tax credit and other health-care-related provisions carries implications for
generating the most gross personal finances.
income for corporations IRS relieves penalties for 2019 and 2020
claiming a foreign tax In Notice 2022-36, the Service provided automatic relief from failure-to-file
credit (tax year 2018) penalties for a range of tax and information returns.

AICPA asks IRS to expand penalty relief
United Kingdom .......................$54.9 billion
In two comment letters to the IRS, the AICPA requested expansion, modifica-
Netherlands ................................$31.5 billion
tion, and clarification of penalty relief in Notice 2022-36.
Ireland...........................................$28.4 billion
Switzerland .................................$27.1 billion AICPA recommends changing cryptoasset question
Japan .............................................$26.4 billion The inquiry on Form 1040, U.S. Individual Income Tax Return, regarding taxpay-
ers’ virtual currency transactions could benefit from simplification and better
Canada .........................................$24.1 billion
guidance than the form’s instructions currently offer, the AICPA suggests.
Germany ......................................$19.4 billion
Mexico ..........................................$16.7 billion Proposed revisions to the AICPA tax standards
Singapore ....................................$16.5 billion An exposure draft and invitation to comment are now available for three new
proposed standards and updates and revisions to existing standards of the
Luxembourg ...............................$15.7 billion
AICPA Statements on Standards for Tax Services.
Source: IRS Statistics of Income, Tax Statistics,
Corporate Foreign Tax Credit Statistics, Table 2.

34 | Journal of Accountancy November 2022