Stewart Karlinsky has written more than 100 articles on tax and policy issues, lectures for many accounting firms and banks, and has served as an expert witness for both the prosecution and defense on various tax issues. He is also the executive director of the Pacific Rim Tax Institute, whose sixth annual conference will be held March 3-4.

In this article, Karlinsky examines recent tax developments in S corporations, C corporations, the international area, and the partnership area through November 16, 2015, and highlights the Protecting Americans From Tax Hikes Act of 2015.

* * * * *

A. Introduction

On December 18 the Protecting Americans From Tax Hikes (PATH) Act of 20151 was passed by Congress and signed into law. It is projected to increase the deficit by $622 billion over 10 years, since Congress suspended its budget "pay as you go" provisions. So much for fiscal responsibility. For a change of pace, 22 of the extenders were made permanent, most of the provisions were extended retroactively to 2015, and 34 were extended for one to three years. If one were cynical, one might read "permanent" to mean that if a future Congress decides to repeal a provision, it will count as a revenue raiser. On the other hand, the permanent status will reduce Congress's ability to raise money from lobbyists and political action committee funds to extend temporary provisions like the section 41 credit ad infinitum.

For small and midsize businesses, the permanent extension of section 179 is a big deal. From 2015 onward, expensing of new or used equipment will be allowed up to $500,000, assuming that there is sufficient taxable income and that less than $2 million worth of equipment is placed in service during the year. Note that this deduction can reduce a business's section 199 domestic production activities deduction. The new law expands section 179's coverage by including HVAC equipment, and the limits will be adjusted for inflation beginning in 2016. Also beginning in 2016, a full section 179 deduction will be allowed for qualified retail, restaurant, and other leasehold improvements, rather than the $250,000 limitation of 2014 and 2015.

The super-expensing in section 181 for film and television of $15 million per episode or movie production has been extended through 2016 -- a significant benefit to indie filmmakers, as well as other television and movie producers -- and continues a legal corporate tax shelter. In 2016 it will apply even to live performances such as repertory theaters and Broadway plays, but probably not to Billy Joel or Celine Dion concerts.

In a very favorable permanent provision for small businesses, the section 1374 built-in gain recognition period after a corporation switches from C to S status is now five years, rather than the originally enacted 10 years.

Another significant permanent tax extender provision is the section 41 research credit. Many high-tech companies have for years been lobbying extensively for this provision. Beginning in 2016 for small business,2 there is an additional sweetener in that the research credit may offset the tentative minimum tax or an employer's share of FICA taxes.3

Section 168(k) bonus depreciation is being slowly phased out. From 2015 to 2017, bonus depreciation will remain 50 percent of newly placed in service tangible personal property, with no taxable income limit. In 2018 it will be 40 percent and in 2019, 30 percent. The bonus depreciation system will permanently apply to qualified leasehold improvements of retail stores, restaurants, etc. Also, it is effective when vines, plants, and fruit trees are planted or grafted, rather than when the assets are placed in service.

Many other provisions were extended, such as the subpart F active financing exception and the IRA provision permitting those who are at least 70 1/2 years old to contribute their required minimum distributions of no more than $100,000 to charity (but forgo the tax deduction). Several credits were made permanent, but wind and solar energy credits will be phased out down the road. Thesection 1202 small business stock exclusion was also made permanent, as well as the exclusion from AMT. State sales tax is permanently allowed in lieu of state income taxes as an individual itemized deduction. The Internet Tax Freedom Act has been extended through 2016.

As has become par for the course, Congress gave with one hand and took away with the other in the real estate investment trust arena. REITs were helped to the extent that most foreign investors may invest in them without incurring a U.S. tax liability on their income or gains. On the other hand, most REIT spinoffs will have been subject to double tax at the distributing corporation and shareholder levels since December 7, 2015 (unless a ruling request had been previously submitted).

Many special provisions were included in this Christmas tree bill, including a 23.8 percent capital gains rate for corporations recognizing qualified timber gains, beginning in 2016; favorable excise tax treatment for apple and pear cider; a three-year depreciation period for racehorses; and a seven-year depreciation period for NASCAR tracks and facilities, rather than 15 or 39 years.

B. S Corporations

1. Adjusted basis for debt (section 1366(d)). One of several major reasons that S corporations are a popular entity for conducting a small business is the ability to pass through losses. However, Congress has imposed significant hurdles to limit this advantage, including the hobby loss rules (section 183), the at-risk rules (section 465), and the passive activity loss rules (section 469). For S corporation shareholders, section 1366(d) limits losses to bona fide loans4 made directly to the S corporation.

2. Back-to-back loans. In an important development for S corporation shareholders, T.D. 9682 2014 TNT 141-16: IRS Final Regulationsfinalized reg. section 1.1366-2 and -5, allowing back-to-back loans between related parties if they are bona fide -- that is, the terms and conditions are similar to those of commercial loans. These rules seem to permit "round-trippers," if properly structured. This would include the following situation: (1) a profitable partnership makes a distribution or loan to its partner; (2) the partner in its role as an S corporation shareholder lends money to a loss S corporation; and (3) the S corporation pays rent to or buys goods from the partnership.

In Jasperson v. Commissioner,5 a video store S corporation lost money for the year, but its owner could not establish adjusted basis, so the loss was denied. Similarly, in Estate of Cape v. Commissioner,6 the taxpayer could not produce support for his adjusted basis in his stock or for his charitable contributions, and the losses and section 170 deductions were disallowed.

3. Last-in, first-out recapture. FFA 20153001F 2015 TNT 142-14: IRS Field Attorney Advice deals with a consolidated C corporation, two of whose subsidiaries (one a C corporation and one a disregarded entity) used the LIFO method of inventory. The corporation's stock was acquired by an S corporation, and a qualified subchapter S subsidiary election was made for the group. The issue was how to properly report the section 1363(d)(3) LIFO recapture tax. The IRS ruled that a short period consolidated return should be filed, as well as a nonconsolidated single transaction return with the LIFO recapture tax. However, the consolidated net operating loss was not allowed in computing the section 1363(d) tax.

4. Tax return due date and extensions. As will be discussed below, the due dates for C corporations and partnerships have been changed, effective for tax years beginning after December 31, 2015. The S corporation due date (March 15) and extended due date (September 15) did not change.

C. C Corporations

1. Corporate formation (section 351). Bell v. Commissioner7 involved a California real estate broker who operated his business as a sole proprietorship and decided to incorporate by selling the assets to a newly created corporation in exchange for a $200,000 note. The intent was to step up the basis of the assets. The corporation paid principal and interest on the loan. The court looked at the Ninth Circuit's 11 factors from Hardman vs. United States8 and held that section 351applied. Therefore, the correct asset basis was the substituted basis under section 358 rather than fair market value.

2. Corporate and partnership due dates. For tax years beginning on or after January 1, 2016, a corporate tax return9 will be due on the 15th day of the fourth month after year-end, while a partnership information return will be due on the 15th day of the third month after year-end. Partnerships will be allowed a six-month extension, and corporations will have a five-month extension. This will affect the 2017 filing season. So for calendar-year entities, partnership returns will be due March 15, which will allow partners to include their Schedules K-1 in their forms 1040, 1041, and 1120. There will still be work compression and overload around September 15, when the tiered partnership Schedules K-1 flow up to top-tier partnerships, and leave no time for corporate returns and only a month to file individual tax returns because their extended deadline is still October 15.

3. Change in accounting method (Form 3115). Rev. Proc. 2015-13, 2015-5 IRB 419 2015 TNT 12-19: IRS Revenue Procedures, revised the form and procedures for automatic and prior consent changes of accounting methods. It lists hundreds of automatic elections. Questions 15 and 16 ask for more information on the change than was requested on previous versions of Form 3115.

4. Section 336(e). Effective May 15, 2013, a C corporation may unilaterally make a section 336(e)election and treat a stock sale of its subsidiary as an asset sale, regardless of whether the purchaser is a partnership, a group of individuals, a minority C corporation, etc. As long as the purchasers, in combination, acquire at least 80 percent of the subsidiary, the selling shareholders may elect to disregard the stock sale. This final regulation10 would parallel and expand section 338(h)(10). When the basis in the stock is lower than the basis in the assets, this becomes another useful tool in the mergers and acquisitions area for tax accountants and lawyers to use for their clients. This would appear to be particularly attractive for the private equity industry.

Example 1A: P owns 100 percent of T, with an adjusted basis of $800,000 and a value of $1.2 million. The inside basis of the assets is $950,000, and their value is $1.2 million. Acquiring Partnership buys stock of T for $1.2 million. If this is a stock sale, it results in $400,000 of gain and no step-up in basis for the buyer. No section 338 election is allowed because the buyer is not a corporation.

Example 1B: P owns 100 percent of T, with an adjusted basis of $800,000 and a value of $1.2 million. The inside basis of the assets is $950,000, and their value is $1.2 million. Acquiring Partnership buys stock of T for $1.2 million. Section 336(e) treats this transaction as a deemed sale of assets. Thus, there is only $250,000 of gain (ordinary, capital, or section 1231), and the buyer gets a step-up in the basis of the assets from $950,000 to $1.2 million. Hopefully, the sellers will negotiate a higher price for the buyer's step-up in the basis of the assets.

5. Officers' compensation (section 162(m)). A public corporation is allowed a deduction for various compensation schemes up to only $1 million for its CEO and for each of the other top four executives, according to section 162(m)(3). Beyond that, pay must be based on performance, as determined by a compensation committee of the board of directors. Recently finalized reg. section 1.162-2711 affirms most of the prior proposed regulation and clarifies that those rules cover stock options and stock appreciation rights. Beginning January 1, 2017, the SEC will require that public companies disclose the ratio of the CEO's total compensation to the median employee compensation.

6. Research credit (section 41). Final and temporary regulations,12 effective June 3, 2014, now allow taxpayers to elect the alternative simplified credit on amended returns by attaching Form 6165. Originally, this was not permitted on amended returns. However, if the previously filed return includes a base period research credit, the taxpayer is not permitted to change it on an amended return.

7. Section 199 domestic production activities deduction. LB&I-04-0315-001 2015 TNT 53-25: IRS LB&I Directives lists several retail activities that will not qualify for section 199, including cutting blank keys to customer specifications, mixing base paint, applying garnishes to cakes baked elsewhere, or slowing down or accelerating the ripening of fruits. On the other hand, Precision Dose Inc. v. United States13 allowed an entity that produced and sold single-unit doses of medicines to be eligible for section 199 and held that this did not constitute repackaging.

Recent temporary and proposed regulations dealt with the allocation of W-2 wages between acquiring and acquired companies.14 A proposed section 199 regulation15 will replace the benefits and burdens test with the criteria of who did the work and incurred the costs.

8. Uncertain tax positions. For 2015 and on, the filing threshold for Schedule UTP is lowered to $10 million in gross assets. For tax year 2012, the IRS reported that there were three primary issues identified by large corporations16: the section 41 research credit, section 482 transfer pricing, and expensing versus capitalization. These data come from the 1,743 corporations that filed Schedule UTP, of which 55 percent were publicly traded. Hopefully, the recent capitalization rules will somewhat reduce the Financial Accounting Standards Board Interpretation No. 48 exposure on the third issue.

9. M-1 and M-3 reporting. For 2015 and on, C corporations, S corporations, and partnerships with less than $50 million in gross assets do not need to file parts II and III of Schedule M-3, but instead may file the more familiar and simpler M-1. Part I of the M-3 is still required.

10. F reorganizations. T.D. 9739 2015 TNT 182-26: IRS Final Regulations lists six criteria a company must meet to have a valid F reorganization and therefore not have to be concerned with continuity of business enterprise, continuity of shareholder interest, a change in year-end, or the ability to carry back an NOL. These new regulations17 also cover outbound F reorganizations. The regulations will not recognize a liquidation and reincorporation as a valid F reorganization, following Rev. Rul. 69-617.

11. Active trade or business. For section 355 (corporate division) to apply, a transaction must not be a device for distributing earnings and profits and must have an adequate corporate business purpose. Rev. Proc. 2015-43, 2015-40 IRB 459 2015 TNT 178-15: IRS Revenue Procedures, and Notice 2015-59, 2015-40 IRB 467 2015 TNT 178-13: Internal Revenue Bulletin, list factors that determine when the government will rule whether a transaction is eligible to be tax free versus subject to two levels of taxation.18 The factors include a 5 percent and 10 percent numerical test relative to investment assets and active trade or business assets. Ostensibly, these rulings could affect the Yahoo Inc.-Alibaba Group Holding Ltd. proposed spin.

12. Responsible person. Section 6672 imposes personal liability on the responsible person who willfully does not remit to the government Social Security and income tax withheld on behalf of an employer and its employees. The term "willfully" has been interpreted by the IRS as affirmatively paying other creditors before the government trust fund. Waterhouse v. United States19 involved a 40 percent owner who had check-writing authority and paid other creditors before paying the federal government. Big mistake. He was held to be a responsible person and personally liable.

13. Ratable service contracts. Rev. Proc. 2015-39, 2015-33 IRB 195 2015 TNT 147-9: IRS Revenue Procedures, deals with accounting for annual contracts that call for regular and routine services, such as landscaping and janitorial services, and allows a position that many companies were already taking -- that is, deducting the cost ratably over the life of the contract.

14. E&P. AM 2015-0001 2015 TNT 31-28: IRS Generic Legal Advice requires the U.S. parent of a controlled foreign corporation to include subpart F and section 956 inclusions in current-year E&P, even if they were not distributed to the parent in that year.

15. Captive insurance company. Securitas Holding Inc. v. Commissioner20 involved Parent Corp. being permitted a $56 million deduction. The court found that there was a shifting of risk and risk sharing with a captive insurance subsidiary, despite Parent Corp.'s guarantee.

16. Cancellation of indebtedness income (section 108). The consolidated tax area has always been complicated21 by the separate entity versus single entity treatment of various items. InMarvel Entertainment LLC v. Commissioner,22 the issue revolved around which treatment would apply to a consolidated group's reduction23 in NOLs when four members were bankrupt. Applying the single-entity theory, the court held that the NOL for the whole group, not the four companies, must be reflected.

17. Farming cash method. The court in Agro-Jal Farming Enterprises Inc. v. Commissioner24 held that a cash basis farm may expense field packing materials when purchased. The government had argued unsuccessfully that under section 464 and reg. section 1.162-3, the cost should be deductible only when the materials were used.

18. Employee stock ownership plan. DNA Pro Ventures Inc. Employee Stock Ownership Plan v. Commissioner25 involved a trust that violated two crucial rules. It distributed to a corporate officer amounts exceeding the section 401(a)(16) limits, and it did not get an appraisal for its nonpublicly traded stock and property. These violations were fatal, and the tax-exempt status of the trust was revoked.

D. International Developments

1. Cost sharing. The Tax Court in Altera Corp. v. Commissioner26 found that reg. section 1.482-7(d)(2), dealing with cost sharing and stock compensation costs, was invalid. This case involved new regulations, but it further affirms the holding in Xilinx Inc. v. Commissioner27 that the old regulations were invalid.

2. OECD base erosion and profit-shifting project. A current development article would be remiss if it did not touch on the OECD base erosion and profit-shifting project, which could have an enormous impact on how U.S. corporations conduct business overseas. Its 15 action items were officially released October 5, 2015. Implementation will begin in 2016, although some countries had already started implementing elements of the project before it was finalized. The 15 items are action 1, on the digital economy; action 2, on hybrid mismatch arrangements; action 3, on strengthening the CFC rules; action 4, on limiting interest deductions; action 5, on transparency and substance; action 6, on treaty abuse; action 7, on artificial avoidance of permanent establishment status; actions 8-10, on transfer pricing; action 11, on collecting and analyzing data; action 12, on disclosure rules for aggressive tax planning; action 13, on country-by-country (CbC) reporting; action 14, on improving dispute resolution within and between countries; and action 15, on multilateral instruments.

Among the most contentious issues are:

  • the fact that action 2 is being implemented at the individual country level;
  • which model to use for PE status -- the U.N. or OECD model -- especially regarding the rules governing selling and ancillary services, servers, and commissionnaire arrangements;
  • whether the arm's-length or profit-split method is the right model for actions 8-10;
  • serious concerns about the security of information in new transfer pricing documentation and CbC reporting requirements (action 13), especially regarding hackers, loose government controls, and the leakage of information to newspapers, competitors, and the public (also, many in the United States think Form 5471 information is already available and that CbC reporting will be burdensome and difficult to comply with); and
  • action 14, particularly binding arbitration, which the United States and Canada believe should be mandatory but which causes India to worry about the loss of sovereignty and control.

3. Corporate inversions. Multiple articles28 have been written on the recent trend of corporate inversions. Treasury has tried to address the issue through notices29 but has now issued final reg. section 1.7874-2,30 defining substantial business activity for purposes of avoiding the application ofsection 7874. The key is having 25 percent of assets, compensation, and sales in one country.

4. Transfers to foreign related parties. Section 367(a) and (d) does not tax outbound transfers of intangibles to foreign related partners or partnerships. Because the issue is bigger than just intangible property, the government is attacking specific transactions through section 721(c). Notice 2015-54 gave warning that the government will require U.S. persons either immediately or periodically to take into account income from a property transfer to a partnership that has foreign partners related to the transferor.

5. Triple drop and check. Rev. Rul. 2015-9, 2015-21 IRB 972 2015 TNT 87-10: IRS Revenue Rulings, and Rev. Rul. 2015-10, 2015-21 IRB 973 2015 TNT 87-11: IRS Revenue Rulings, revoke Rev. Rul. 78-130, 1978-1 C.B. 114, to allow substance to override form and permit foreign and domestic reorganizations with multiple drops.

E. Partnerships

1. Carried interest. One of the most contentious tax policy issues is the treatment of carried interest, now treated as capital gains. An ERISA case, Sun Capital Partners III LP v. New England Teamsters & Trucking Industry Pension Fund,31 involved two private equity firms. The First Circuit held that under the ERISA rules, one of the entities carried on a trade or business rather than an investment. Whether this applies to the proper income tax treatment of carried interest or to passive activity loss treatment32 remains to be seen.

2. Working interest in oil and gas. Methvin v. Commissioner33 involved a CEO of a computer company who had some working interests in oil and gas. The court held that the income from the oil and gas interests was subject to self-employment taxes, even though the taxpayer was not involved in the business. Further, even though the parties had elected out of the partnership rules under section 761, the court found a joint venture or pooling arrangement.

In a related development, the IRS issued ILM 201436049 2014 TNT 173-18: IRS Legal Memorandums, ruling that the partners in a management company who advised a family of investment partnerships were not covered by thesection 1402(a)(13) exception and were thus subject to self-employment taxes. To add to the mix, Treasury, on August 26, 2014,34 and again on July 31, 2015,35 announced that it will address the application of section 1402(a)(13) to limited liability companies.

3. Management fee waivers. On July 22, 2015, the government proposed regulations36 that would affect private equity or hedge fund management fee waiver agreements. Basically, it would tax specific arrangements as current ordinary income rather than as deferred capital gains.

4. Disguised sale. The court in SWF Real Estate LLC v. Commissioner37 followed the Fourth Circuit's opinion in Virginia Historic Tax Credit Fund 2001 v. Commissioner38 and applied section 707 for a disguised sale.

5. Section 108. There have been four relatively recent cases39 in which the courts have held that section 108 will apply to exclude debt forgiveness from income when the partnership is bankrupt but the partners are not. Treasury issued AOD 2015-01 2015 TNT 22-37: IRS Actions on Decisions, which disagrees with these four cases.

6. Large partnership entity-level IRS audits. For tax years beginning January 1, 2018, the Bipartisan Budget Act of 2015 (P.L. 114-74 2015 TNT 208-21: Proposed Legislation) includes a sea change of how large partnerships are liable at the entity level for their partners' individual tax liabilities. Basically, if a large partnership has a net taxable income audit change, the partnership would owe the tax at the highest statutory rate (39.6 percent for individual partners and 35 percent for corporate partners), even if some partners are in lower tax brackets. Also, partners in the audited year may be different from the partners in the year the income was originally earned, which brings up fairness issues. If the partnership can show that the partner is a tax-exempt organization or subject to special capital gains rates, that portion of the entity-level tax would be waived or reduced.

If the audit determines that there are misallocation issues, the deficiency will be computed on a gross basis rather than on the normal net basis.

Example 2: A large partnership misallocated $100,000 to A that should have been allocated to B. The government would assess $39,600 from the partnership, even though A had included the $100,000 in his income tax return for the year to which the income relates.

A would take a $100,000 non-separately stated deduction in the year of the audit. What if A is no longer a partner? What if the misallocation involved a capital gain item?

This entity-level tax may affect Accounting Standards Codification Topic 740, "Income Taxes," because it may give rise to UTPs for the first time on partnership financials for U.S. federal income taxes.

There is an important opt-out for small partnerships (those with under 101 Schedules K-1 for the year), but the partnership must affirmatively elect annually not to be taxed at the entity level and must disclose all the partners' names and identification numbers to the IRS, including looking through S corporations for the number of partners and providing the tax information of the S corporation shareholders. It must also notify the partners that it is making this audit election.


1 H.R. 2029.

2 Small business is defined for this purpose as a business with $50 million or less of gross receipts and may include C corporations, S corporations, partnerships, and sole proprietorships.

3 For this purpose, small business is defined as a relatively new business (less than five years old) with less than $5 million in gross receipts in the current year.

4 The final regulations on back-to-back loans were issued in July 2014 and were made retroactive to the proposed regulations' issuance date.

5 T.C. Memo. 2015-186 2015 TNT 184-13: Court Opinions.

6 116 A.F.T.R.2d 2015-6339 (D.C. Wis. 2015).

7 T.C. Memo. 2015-111 2015 TNT 115-15: Court Opinions.

8 827 F.2d 1409 (1987).

9 H.R. 3236 2015 TNT 145-20: Proposed Legislation, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.

10 T.D. 9619 2013 TNT 92-34: IRS Final Regulations.

11 T.D. 9716 2015 TNT 61-12: IRS Final Regulations.

12 T.D. 9712 2015 TNT 39-13: IRS Final Regulations and T.D. 9666 2014 TNT 106-9: IRS Temporary Regulations.

13 No. 3:12-cv-50180 (N.D. Ill. 2015) 2015 TNT 187-16: Court Opinions.

14 T.D. 9731 2015 TNT 166-10: IRS Temporary Regulations.

15 REG-136459-09 2015 TNT 166-11: IRS Proposed Regulations.

16 Defined as those having $50 million or more in gross assets.

17See also Amy S. Elliott and Marie Sapirie, "Treasury Preserves the Bubble in Final Change-in-Form Regs," Tax Notes, Sept. 28, 2015, p. 1435 2015 TNT 182-3: News Stories.

18See Elliott, "ATB Guidance: New Threshold and Treasury's Plan of Attack," Tax Notes, Sept. 21, 2015, p. 1295 ; and Joseph DiSciullo, "Regs Clarify Transfer Pricing Rules, Treatment of Outbound Transfers," Tax Notes, Sept. 21, 2015, p. 1339.

19 122 Fed. Cl. 276 (2015) 2015 TNT 143-13: Court Opinions.

20 T.C. Memo. 2014-225 2014 TNT 210-15: Court Opinions.

21 In the partnership area, a similar complicating dichotomy exists between the entity and aggregate approaches.

22 145 T.C. No. 2 (2015) 2015 TNT 140-12: Court Opinions.

23 Section 108(b).

24 145 T.C. No. 5 (2015) 2015 TNT 147-10: Court Opinions.

25 T.C. Memo. 2015-195 2015 TNT 193-21: Court Opinions.

26 145 T.C. No. 3 (2015) 2015 TNT 144-9: Court Opinions.

27 125 T.C. 37 (2005) 2005 TNT 168-4: Court Opinions, aff'd, 598 F.3d 1191 (9th Cir. 2010) 2009 TNT 100-9: Court Opinions.

28See, e.g., Mindy Herzfeld, "What Can Treasury Do About Inversions?" Tax Notes, Aug. 25, 2014, p. 895 2014 TNT 164-1: News Stories; and Andrew Velarde and Kristen A. Parillo, "Inversion Guidance Hits Pending Deals, Not Previous Inverters," Tax Notes, Sept. 29, 2014, p. 1489 .

29See Notice 2014-52, 2014-42 IRB 712 2014 TNT 184-23: Internal Revenue Bulletin.

30 T.D. 9720 2015 TNT 107-11: IRS Final Regulations.

31 724 F.3d 129 (1st Cir. 2013) 2013 TNT 144-9: Court Opinions.

32 Section 469.

33 T.C. Memo. 2015-81 2015 TNT 81-13: Court Opinions.

34See Elliott, "Treasury to Rethink Self-Employment Tax Exemption," Tax Notes, Sept. 1, 2014, p. 1027 2014 TNT 167-2: News Stories.

35See Treasury 2015-2016 Priority Guidance Plan Section B.11.

36 Prop. reg. section 1.707-2. See also Elliott and Lee A. Sheppard, "Proposed Fee Waiver Rules Hit Worst Cases, Deny Zero Valuation," Tax Notes, July 27, 2015, p. 361 2015 TNT 141-1: News Stories.

37 T.C. Memo. 2015-63 2015 TNT 64-11: Court Opinions.

38 639 F.3d 129 (4th Cir. 2011) 2011 TNT 61-14: Court Opinions.

39Gracia v. Commissioner, T.C. Memo. 2004-147 2004 TNT 121-15: Court Opinions; Mirachi v. Commissioner, T.C. Memo. 2004-148 2004 TNT 121-16: Court Opinions; Price v. Commissioner, T.C. Memo. 2004-149 2004 TNT 121-14: Court Opinions; Estate of Martinez v. Commissioner, T.C. Memo. 2004-150 2004 TNT 121-13: Court Opinions.