The IRS announced in a recent memo (LB&I-4-0812-010) that its Large Business & International (LB&I) Division is terminating the Tiered Issue Process previously used to set exam (audit) priorities and manage exams. The new exam process will be more decentralized and is intended to provide more authority to examination agents and teams to craft taxpayer-specific approaches to issues.

The Tax Court has held that a taxpayer's sale of an office building to his adult children, and his payment of rent for use of offices in the building, were bona fide transactions that had economic substance. The court rejected the IRS's argument that the transaction was tax-motivated and that the rental payments were not deductible. The court's opinion demonstrates that transactions between family members, such as a sale of real estate, can be respected for tax purposes if the facts demonstrate that the transaction was bona fide and had a business purpose.

The IRS has issued proposed reliance regulations to clarify the exception to the 50 percent meal and entertainment expenses deduction limit under Code Sec 274(n) where amounts are paid or incurred under reimbursement or other expense allowance arrangements. While the IRS generally takes a strict approach under these new regulations, they do provide a helpful road-map both to businesses and to contractors, as well as employees, for setting up and following through on reimbursement arrangements. As "proposed reliance regulations," taxpayers are allowed to use them immediately to their advantage.

The IRS has unveiled the IRS Data Retrieval Tool (DTR), a time-saving tool designed to minimize the time required for college-bound students and their parents to complete the Department of Education's Free Application for Federal Student Aid (FAFSA). The new IRS DTR is available through the website www.fafsa.gov.

When disaster strikes, a casualty tax loss may provide some comfort. A casualty is the damage or destruction of property resulting from an identifiable event that is sudden, unexpected, or unusual. Damage resulting from the progressive deterioration of property through a steadily operating cause would not be a casualty loss. A deductible loss can result from a number of events, such as fire, flood, storm (including hurricanes and tornadoes), or earthquake. Storm losses can involve damage from flooding or wind, for example. Other "sudden and unexpected events," such as an automobile accident, also qualify as a casualty for tax purposes.

More than six months after the IRS issued temporary "repair" regulations (T.D. 9564), many complex questions remain about their interpretation and application. These regulations are sweeping in their impact. They have been called game-changers for good reason, affecting all businesses in one way or another and carrying with them both mandatory and optional requirements. Many of these requirements also carry fairly short deadlines.

Is your Medical Loss Ratio (MLR) rebate check taxable? The U.S. Department of Health and Human Services (HHS) estimates that nearly 12.8 million Americans received more than $1.1 billion in MLR rebates during August 2012 based on insurance company shortfalls in cutting overhead during 2011. If you received a rebate, either as an individual policyholder or as an employer or employee, is it taxable?

As 2013 draws closer, news reports about "taxmageddon" and "taxpocalypse," describing expiration of the Bush-era tax cuts, are proliferating. Many taxpayers are asking what they can do to prepare. The answer is to prepare early. September may seem too early to be discussing year-end tax planning, but the uncertainty over the Bush-era tax cuts, incentives for businesses, and much more, requires proactive strategizing. Ultimately, the fate of these tax incentives will be resolved; until then, taxpayers need to be flexible in their year-end tax planning.

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of September 2012.

The IRS has issued program manager technical advice (PMTA) explaining that Code Sec. 7623 cannot form the basis for awards related to information provided by whistleblowers that only concerns violations of non-tax law provisions. If, on the other hand, the IRS receives information pertaining to a violation of non-tax law, but which leads to a recovery under Title 26 (the Tax Code), then the IRS may pay an award under Code Sec. 7623.