Federal Tax Update for the Week of April 19, 2010

1. Land Surveying Properly Defined as Engineering in Regulations for Purpose of Personal Service Corporation Rules
Citation: Kraatz & Craig Surveying, Inc. v. Commissioner, 134 TC No. 9, 4/13/10

2. Legal Fees Awarded to Taxpayer's Counsel Not Taxable to Taxpayer Where No Obligation to Pay Counsel Existed and Payment was Not a Portion of Original Award
Citation: PLR 201015016, 4/16/10

3. Taxpayer Taxable on Cancellation of Indebtedness Income Despite Divorce Decree Stating Former Spouse was Liable
Citation: Jensen v. Commissioner, TC Memo 2010-77, 4/15/10

4. Taxpayer Had Beneficial Ownership of Residence Held in Trust, Allowed Mortgage Interest Deduction
Citation: Adams v. Commissioner, TC Memo 2010-72, 4/13/10

5. 15 Year Amortization of Agreement Not to Compete Required for Acquisition of Any Sized Interest in a Trade or Business
Citation: Recovery Group v. Commissioner, TC Memo 2010-76, 4/15/10

6. Production of Genetically Modified Material Qualifies for §199 Treatment, but Only Minor Amount of Licensing Arrangement Would
Citation: CCA 201014050, 4/9/10

7. Taxpayer Who Took Funds from IRA to Cover Contingent Expenses in Business Acquisition Allowed Late Rollover Due to Erroneous Advice From Financial Institution
Citation: PLR 201015033, 4/16/10

8. Fourth Circuit Agrees:  Taxpayers Have to Live With Tax Treatment Originally Claimed for Sale of Their E&Y Consulting Interests
Citation: United States v. Bergbauer, CA4 No. 08-2054, 4/16/10

9. Taxpayer was Real Estate Professional, but Never Made Election to Aggregate Activities
Citation: Trask v. Commissioner, TC Memo 2010-78, 4/15/10

10. Despite Tax Advisers Failure to Advise Client About §475(F) Election, Taxpayer Denied Late Election Relief
Citation: PLR 201014004, 4/9/10

11. IRS Updates Procedures to Inform Service of Change in Last Known Address
Citation: Revenue Procedure 2010-16, 4/16/10

12. Passage of Time Alone Not Sufficient to Require IRS to Abate Interest on Assessment
Citation: Larkin v. Commissioner, TC Memo 2010-73

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