Recent Developments


Listen to your Tax Adviser:

The taxpayer's tax adviser recommended not amending tax returns. The taxpayer, instead of heading his long time advisers advice sought out another practitioner who amended the returns without researching the appropriateness of that action. The Court held that the accuracy related penalties could be assessed against the taxpayer and that the taxpayer could not avoid them by claiming reliance on the second preparer. Larry Wadsworth , TC Memo 2008-171 (Tax Ct.).


Business Start up and Organization Expenses:

The IRS simplified the deduction of these costs in TD 9411, 07/07/2008. After September 6, 2008 a formal election to deduct these costs will no longer be necessary, in some instances this new paradigm may be applied to expenses incurred after October 22, 2004. Instead the IRS will presume that every taxpayer would want to deduct these costs unless the taxpayer elects not to. Code Sections 195, 248, and 709.


Partner Merger Rights:

Section 121-1102(d) of the NY partnership law provides that a limited partner shall not have the right to attack the validity of the merger except  to contest compliance with the provisions of the partnership agreement, or the notice provisions of the statute. Since these exceptions weren't found to apply, the limited partner's sole remedy when objecting to partnership's merger is appraisal proceeding. Section 121-1105(b) of the Partnership Law. Appleton Acquisitions, LLC v. National Housing Partnership, 10 N.Y.3d 250, 856 N.Y.S.2d 522.


Watch Will Formalities:

Several recent cases have evaluated whether the formalities of signing a will were properly handled. The lesson in all is that caution and attention to formality remains advisable. In one case, the witnesses names were printed instead of signed under that of the testatrix where the formal text of the will concluded. However, both the testatrix and witnesses did sign the self-proving affidavit that followed. On appeal the court held that substantial compliance with the requirements would suffice. Hampton Road Seventh-Day Adventist Church v. Stevens, 657 SE2d 80 (2008).

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