·         Specify when or if cancellation of debt is taxable, and how cancellation of debt impacts gross income for an insolvent taxpayer.

·         Value the sales price for tax purposes of a nonrecourse mortgage foreclosure; and establish what happens to the loss of sale in a recourse mortgage foreclosure.

·         Establish whether or not the income from the discharge of debt incurred in bankruptcy is taxable.

·         Recognize the gain exclusion amount of a home sale that, generally, does not require IRS notification on Form 1099-S for single and married taxpayers.

·         Compute the excludable gain under the reduced exclusion rule on a specific home sale for unforeseen circumstances.

·         Identify the tax results when gifting an entire house to a child.

·         Calculate and assess which circumstance results in: the lowest taxable gain for a couple selling their home to finance a child’s education; or the maximum tax savings for a couple selling their home in a divorce.

·         Recall the court decision regarding a testamentary trust in a ranching business, for passive loss limitation purposes.

·         Identify what type of activity constitutes per se passive activity, and what type of taxpayer activity in which she or he materially participates in is not subject to limitation under the passive loss rules, as long as certain eligibility requirements are met.

·         Isolate what is required for an individual to satisfy the real estate professional eligibility requirements.

·         Identify what happens to basis of property, for a correctly titled property in a community property state, at the death of the first spouse.

·         Recall how to calculate the gain recognized on an exchange; and even whether gain or loss should be recognized in specific exchanges.

·         Recollect what happens to recognition of postponed gain in a related party exchange.

·         Ascertain whether or not the trading of partnership interests is a taxable event.

·         Specify who may acquire the seller’s property in contemplation of an exchange, and negotiate a transfer to the buyer subsequent to the closing time.

·         Establish in what type of exchange, if ever, an accommodator ever owns replacement property.

·         Indicate what generally happens to the exchange basis when calculating depreciation on property received in an exchange, and what convention must be used for depreciating the exchanged basis.

·         Decide if a depreciation deduction is allowed for property disposed of in a like-kind exchange in the same taxable year that the property was placed in service.

·         Decide how to best depreciate real property received in exchange with a shorter life and different method than the property given.

Prerequisites: A basic understanding of tax preparation.

Program Level: Update

Program Published to the Web: November 2007

No advance preparation required.

·         Identify the charged tip rate for an establishment complying with the IRS’s new tip reporting procedure, the Attributed Tip Income Program (ATIP); and what amount of an employer’s taxes the business tax credit equals for tips in excess of those treated as wages.

·         Specify how many factors the IRS tests to assess the degree of control that an employer has over an employee or independent contractor; and which factor the IRS no longer mentions.

·         Decide what happens after the IRS delivers the Publication 1976, alerting a business to an improper worker classification raised in an audit; on whom lies the burden of proof in an employee v. independent contractor audit; and what kind of case a taxpayer has when presenting evidence that will allow the taxpayer to prevail in such an audit, unless the government can present contradictory evidence.

·         Establish whether or not §530 relief can be denied on the basis that the Form 1099 was not filed even when the worker received less than $600; and why, in two specific court cases, certain taxpayers lost their §530 relief.

·         Indicate what activity is subject to self-employment tax; and what the self-employment tax rate is in 2007.

·         Recollect what type of tax is optional for statutory employees; and where statutory employees report W-2 wages.

·         Recall what the 6^th Circuit Court deemed early retirement payments to tenured teachers; and which Court ruled that such payments were not wages subject to FICA.

·         Ascertain when payments to attorneys must be reported to the IRS.

·         Determine if the IRS must notify “responsible persons” that a trust fund recovery penalty will apply; and what individuals the IRS can generally hold personally liable for taxes withheld from employees but not deposited with the government.

Prerequisites: A basic understanding of tax preparation.

Program Level: Update

Program Published to the Web: November 2007

No advance preparation required.

·         Specify what type of partnership is required to file the Schedule M-3.

·         Indicate when the Modernized e-file will become the only e-file platform for partnership returns.

·         Establish whether or not a husband-wife partnership may report income or loss on two Schedule Cs.

·         Recognize whose distributive share of income is subject to self-employment tax, and when; and cite why the Court in Timothy Harris v. Comm. ruled that Harris was required to report his distributive share of partnership income.

·         Indicate when a lender-borrower relationship is most likely a partnership.

·         Identify in what certain service businesses partners can never become “limited” partners for purpose of the self-employment tax, according to controversial proposed regulations; and what percentage of ownership in a class of interest is considered “substantial” for a limited partner.

·         Ascertain the characteristics of an LLC, including a single-member LLC; recall how an LLC, with proper drafting of the LLC agreement, will be characterized for federal income tax purposes; establish whether or not a single owner of a single-member LLC can continue to file a Form 1040, Schedule C for federal tax purposes; and indicate what the Courts have ruled regarding the liability of an single-person LLC owner.

·         Specify the major advantage an S corporation has over an LLC.

·         Select what type of general partnership protects the owner’s personal assets when another partner is sued for malpractice.

·         Recognize which method for converting an entity is a tax free transaction.

·         Decide which entity is not taxed when assets are distributed in a complete liquidation.

Prerequisites: A basic understanding of tax preparation.

Program Level: Update

Program Published to the Web: November 2007

No advance preparation required.

·         Identify levels of confidence Congress defines for tax preparers when signing client’s tax returns; when said definitions go into effect; and what the penalty is for signing a return with a known understatement.

·         Indicate what changes the Office of Professional Responsibility (OPR) proposed for Circular 230.

·         Recall the largest component of the tax gap; by how much the IRS increased business audits in attempts to close the tax gap; and which taxpayers have the highest chance of being audited.

·         Name the organization available to taxpayers who have ongoing issues with the IRS.

·         Establish whether or not Congress has been asked to repeal AMT!

·         Recognize the area of greatest tax litigation; and the main reason why charitable contribution cases are litigated.

·         Specify a specific internet tax scam that targets taxpayers; how to contact the IRS about potential tax scams; and the possible penalty for pursuing frivolous arguments before the Tax Court.

·         Establish whether or not federal tax debts incurred within three years of filing for bankruptcy are dischargeable.

·         Cite the results of two large tax shelter cases: KPMG and Sidley & Austin.

·         Stipulate requirements for electronically filing tax returns.

·         Identify methods the IRS uses to reconstruct income, and who is saddled with the burden of proof in such cases.

·         Establish whether or not taxpayers may opt out of private debt collection; and how much commission such “outsourced” debt collection agencies can charge.

·         Decide the date on which the Small Business Tax Act extends the period before which accrual of interest and certain penalties are suspended, regarding any IRS notice sent to a taxpayer specifically stating the taxpayer’s liability and the basis for the liability.

·         Select what happens to the statute of limitations when a taxpayer omits 25% of the amount of gross income stated in the return.

·         Recollect what option a taxpayer unable to pay taxes is using when she or he pays a 20% down payment.

·         Acknowledge how the IRS applies the payment in an offer-in-compromise.

·         Establish whether or not a spouse is deemed to have actual knowledge of the understatement if a reasonably prudent taxpayer in his or her position at the time of signing the return could be expected to know that the return contained the understatement; and when a spouse need not establish that at the time he or she signed the joint return he or she did not know, and had no reason to know, that there was an understatement of tax.

Prerequisites: A basic understanding of tax preparation.

Program Level: Update

Program Published to the Web: November 2007

No advance preparation required.