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).