The final requirement for acting reasonably and in good faith is that the
taxpayer must not be deemed not to have acted reasonably and in good faith.
Special basis rules apply if a
taxpayer receives a personal residence as a gift, bequest or payment for services rendered.
In order for the receipts from the lease, rental, license, sale, exchange, or other disposition of an item to be considered DPGR, the item itself must qualify as having been manufactured, produced, grown or extracted in whole or significant part by the
taxpayer within the United States.
But the majority of offers are rejected because the
taxpayer doesn't bother to learn the rules.
The Office of
Taxpayer Burden Reduction is reviewing practitioner requests to consider other ways of handling the recording of stock transactions.
Basis for contention: Form 9423 asks the reason for disagreement with the IRS, and requires the
taxpayer to offer solutions to the problem.
In other words, assume that a
taxpayer designs an article of clothing, purchases the required fabric and other materials, and provides the design and materials to a third party to cut and stitch the
taxpayer's fabric into the desired article of clothing.
Later, the
taxpayer locates a buyer for the relinquished property.
In McShain a
taxpayer notified the IRS he intended to construct specific replacement property and followed through on his promise.
As discussed in more detail below, a
taxpayer can now face the risk of the IRS requiring it to (1) use the LIFO method to account for departments or goods that have been excluded from the LIFO method, (2) change from LIFO for one or more pools or (3) change to a different LIFO pooling method.
Finally,
taxpayers must capitalize amounts paid to another party to defend or perfect title to intangible property if the other party challenges the
taxpayer's title to the intangible property.
For example, a proposed change for 2001 for a calendar-year
taxpayer will be based on the average annual gross receipts of 1998, 1999 and 2000.
