E. Lynn Nichols, CPA, and John L. Norman, Jr., team up to bring us up-to-date on recent court decisions, Treasury regulations, and IRS guidance. The topics in this program include:

• Guidance from the National Taxpayer Advocate on collections involving economic hardship

• A taxpayer's attempt to appeal the Service's decision in a collection due process equivalent hearing

• Reportable transaction penalties amended by the Small Business Jobs Act of 2010

• When the tax liability on a Substitute for Return prepared by the IRS is dischargeable in bankruptcy

• Dissolution of an S corporation and the recognition of income reported on Schedule K-1

• An S corporation restructuring that lacked a business purpose

• Valuation of life insurance distributed from a retirement plan

• IRS guidance on the treatment of variable prepaid forward contracts

• 2012 contribution limits for health savings accounts

• Publication 901, U.S. Tax Treaties, update

• Equitable innocent spouse relief prior to the Service's acquiescence

Chapter 1 considers a variety of interesting and entertaining developments in tax. These include:

• Revenue Procedure 2011-32 provides the inflation-adjusted amounts for high-deductible health insurance policies and related Health Savings Account contributions.

• Publication 901, U.S. Tax Treaties, contains updated information on tax treaties with 59 countries.

• The National Taxpayer Advocate recently released TAS-13.1.10-0311-008, Interim Guidance on Handling Collection Cases Where Economic Hardship Is Present but the Taxpayer Has Not Filed All Required Returns.

• In LB&I-20-0211-001, the IRS Large Business & International Division issued guidance on IRC §6707A reportable transaction penalties amended by the Small Business Jobs Act of 2010.

• In Eric M. Cannon, No. 09-69712, the Bankruptcy Court for the Northern District of Georgia addressed the question of whether a Substitute for Return (SFR) prepared by the IRS is a tax return, and whether the resulting tax liability is eligible for discharge in bankruptcy. Our experts explain what is necessary to achieve a favorable result.

• In Suzanne Pullins, 136 TC No. 20, the Tax Court once again asserts that IRS regulations establishing a two-year limitation on equitable innocent spouse relief under IRC §6015(f) are invalid. This case is appealable to the Eighth Circuit.

• Internal Legal Memorandum 201104031 provides guidance on the treatment of variable prepaid forward contracts.

• Richard J. Rocchio, TC Summ. Op. 2011-58, involves an S corporation shareholder who believed that the corporation had been dissolved, so he was not required to report the income on his Schedule K-1.

• Weekend Warrior Trailers, Inc., TC Memo. 2011-105, involves the inventor of the Toy Hauler and the unfortunate result of his attempt to restructure his S corporation.

• In Frederic J. Lowe, TC Memo. 2011-106, the Tax Court reached a decision on the valuation of life insurance that is the opposite of its earlier decision in Karl L. Matthies, 134 TC No. 141 (2010).

• Chiquita T. Tuttle, 107 AFTR2d ¶2011-2288 (9th Cir. 2011), addresses the appeal rights of a taxpayer who was granted an equivalent hearing when her attorney did not respond in a timely manner to IRS collection notices. Lynn explains the importance of avoiding this result.

E. Lynn Nichols, CPA (PA), a practicing CPA for more than 45 years, is the founder of Nichols Patrick CPE, Inc., a developer of continuing education programs and practice aids for CPAs. He is a regular contributor to CPE Network^®. Mr. Nichols was twice honored by the Ohio Society of CPAs for service to the accounting profession. Mr. Nichols serves as an advisor to CPA firms across the U.S. on matters of federal income taxation, litigation services, and IRS procedures.

John L. Norman, Jr., JD, is an attorney in private practice in Washington, D.C., where he specializes in closely held business organizations, as well as estate and financial planning. He is the former National Director of Taxation for the accounting firm Pannell Kerr Forster. Previously, he was the Director of Tax Policy for Potomac Electric Power Company. He also taught at the College of William and Mary and George Washington University. He currently teaches at the University of Maryland University College and is a regular contributor to CPE Network^®.