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Lone Accountant wins upset over IRS regarding Demutualization Bill 08-25-2008
Posted by Bill on August 25, 2008, 8:14 pm
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I've been surprised to see no comment as yet, on the triumph of that
lonely accountant who fought the IRS for 7 years -- and finally
succeeded in winning his case for allowing taxpayers to claim a cost
basis when insurance companies "demutualize."

As an AARP TaxAide volunteer, I always felt it was unfair that my
elderly "clients" -- who may have paid premiums for 20 or 30 years --
were forced to treat their new stock awarded them by the former mutual
insurance companies, as having zero cost basis. But we were told that
was the only way to handle these things.

Now, a lonely, unsung hero has succeeded in scoring a win against that
illogical position adopted by the IRS.

Congratulations to Charles Ulrich.

Here's a URL for the full story:

http://abajournal.com/news/accountant_scores_rare_irs_win_many_could_get_demutualization_refunds/

Bill

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Posted by removeps-groups@yahoo.com on August 25, 2008, 11:40 pm
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On Aug 25, 5:14 pm, an_ordinary_guy_...@hotmail.com (Bill) wrote:

> I've been surprised to see no comment as yet, on the triumph of that
> lonely accountant who fought the IRS for 7 years -- and finally
> succeeded in winning his case for allowing taxpayers to claim a cost
> basis when insurance companies "demutualize."

This is good news. Can people file amended returns for 20 years
back? Seems they should be able to in this case.

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
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<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Bill on August 26, 2008, 10:38 am
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removeps-groups@yahoo.com posted:

>On Aug 25, 5:14 pm,
>an_ordinary_guy_...@hotmail.com (Bill) wrote:

>>I've been surprised to see no comment as
>>yet, on the triumph of that lonely accountant
>>who fought the IRS for 7 years -- and finally
>>succeeded in winning his case for allowing
>>taxpayers to claim a cost basis when
>>insurance companies "demutualize."

>This is good news. Can people file amended
>returns for 20 years back? Seems they should
>be able to in this case.

I don't know what the consequences will be, nor do I have any idea what
mechanics might be worked out to achieve equity for those many people
who were taxed unfairly, over the years.

That's part of what I was hoping would show up, when some more learned
students of the trade took up this subject. And that's why I raised the
question. The link I provided was to an American Bar Association site,
which gave the raw facts ... but it will be up to the IRS to propose
mechanisms, and tax professionals to work them out.

As a volunteer tax preparer, those things are way above my competence
.. but I'm sure some of my TP "clients" will hear about this, and show
up next winter at my site, hoping that I'll have some answers. That's
one big reason for my participation in this forum -- because I feel an
obligation to those folks, to learn more and be equipped to assist them
with complex (and sometimes arcane) questions, such as those which are
raised by this court ruling.

I hope this thread will invite participation by those members of this
forum who in the past have provided authoritative comment and
information regarding IRS policies when such issues are "settled" by a
precedent-setting legal ruling, as is the case here.

My friends, your knowledge and insider views will be welcomed by we
ordinary folk (pun intended :-).

Bill

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Gil Faver on August 26, 2008, 11:17 am
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>
> removeps-groups@yahoo.com posted:
>
>>On Aug 25, 5:14 pm,
>>an_ordinary_guy_...@hotmail.com (Bill) wrote:
>
>>>I've been surprised to see no comment as
>>>yet, on the triumph of that lonely accountant
>>>who fought the IRS for 7 years -- and finally
>>>succeeded in winning his case for allowing
>>>taxpayers to claim a cost basis when
>>>insurance companies "demutualize."
>
>>This is good news. Can people file amended
>>returns for 20 years back? Seems they should
>>be able to in this case.
>
> I don't know what the consequences will be, nor do I have any idea what
> mechanics might be worked out to achieve equity for those many people
> who were taxed unfairly, over the years.

If history is any guide, there will be no exceptions for the statute of
limitations. Any one of those earlier tax filers could have contested, but
they chose not to.

fair? no. The likely outcome? yes.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Arthur Kamlet on August 26, 2008, 11:52 am
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>
>>
>> removeps-groups@yahoo.com posted:
>>
>>>On Aug 25, 5:14 pm,
>>>an_ordinary_guy_...@hotmail.com (Bill) wrote:
>>
>>>>I've been surprised to see no comment as
>>>>yet, on the triumph of that lonely accountant
>>>>who fought the IRS for 7 years -- and finally
>>>>succeeded in winning his case for allowing
>>>>taxpayers to claim a cost basis when
>>>>insurance companies "demutualize."
>>
>>>This is good news. Can people file amended
>>>returns for 20 years back? Seems they should
>>>be able to in this case.
>>
>> I don't know what the consequences will be, nor do I have any idea what
>> mechanics might be worked out to achieve equity for those many people
>> who were taxed unfairly, over the years.
>
>If history is any guide, there will be no exceptions for the statute of
>limitations. Any one of those earlier tax filers could have contested, but
>they chose not to.
>
>fair? no. The likely outcome? yes.


If the IRS appeals, which is likely, it will be quite some time
before this issue is settled.

Many tax professionals will be advising clients to file protective
claims to lock in their position before the statute runs out.


>From a volunteer point of view, I seriously doubt that IRS (VITA)
or AARP (TaxAide) or other TCE or clinics folks will be teaching
protective claims. Quite the opposite: I suspect they will teach:

Don't get involved.

Whether or not the IRS appeals, the three year statute still holds.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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