Veteran Chopper Pilot Shoots Down IRS Arguments. After serving two stints over nearly 25 years as a helicopter pilot and flight instructor for the Army, Jesse Linde found himself losing out to younger pilots for stateside jobs. While his wife remained in Alabama, Linde relocated in 2009 to Iraq, where he found steady work flying for a government contractor. He obtained an Iraqi resident visa, moved outside the secured Green Zone and built a local social and financial life. Linde’s job required him to work 12-hour shifts for 60 straight days, then to leave Iraq for 30 days before returning. Because of a relative’s infirmities, he usually returned to Alabama during those 30-day breaks. Linde claimed the statutory exclusion for foreign earned income, but the Internal Revenue Service assessed more than $50,000 in taxes and penalties for 2010 through 2012, asserting that Linde did not qualify as a “bona fide resident” of Iraq. The Tax Court sided with Linde, noting that he relocated his “tax home” to Iraq with the intention of spending the rest of his career there. Judge Juan Vasquez found Linde to be an “honest, forthright and credible” witness, and reversed the penalties and most of the tax assessed by the IRS. Linde still owed a small balance relating to some expenses that Linde’s tax preparer erroneously advised him were deductible. Jesse A. Linde v. Commissioner, T.C. Memo 2017-180.
Treasury Backs Down On Business Valuation Regs. As expected, the Treasury Department this month withdrew regulations that were proposed in the closing months of the Obama administration to limit gift and estate tax benefits of family-controlled limited partnerships and other business entities. The proposed rules would have disregarded certain restrictions on liquidations and member withdrawals that typically result in lower values for tax purposes. Under an executive order issued by President Trump, the department determined that the proposed rules would create undue burdens for taxpayers or add undue complexity to the tax code. The withdrawal was effective Oct. 20. Federal Register Doc. 2017-22776.
IRS Extends Relief To Disaster Victims. Individuals and businesses affected by recent storms and wildfires can take advantage of deadline extensions and other tax relief from the Internal Revenue Service. Most federal tax and estimated payment deadlines are extended to Jan. 31, 2018, under various recent announcements. Also, residents of Puerto Rico and the U.S. Virgin Islands who left the territories after Hurricane Maria will not be penalized for any time away through the end of 2017 in determining whether they are residents of the territories for federal income tax purposes. www.irs.gov/newsroom/tax-relief-in-disaster-situations