In the past, an Enrolled Agent’s only access to IRS assistance was the telephone. With the introduction of IRS e-Services, lengthy phone navigation to obtain help on small issues is eliminated. Many Enrolled Agent jobs entail basic matters that are handled by the e-Services system. Just last year, tax practitioners substantially increased their utilization of e-Services.

Common uses associated of IRS e-Services are obtaining transcripts and filing authorization forms. The platform permits electronic submission of Form 2848 – Power of Attorney and Declaration of Representative – and Form 8821 – Tax Information Authorization. These forms are commonly involved in conducting Enrolled Agent tax work representing new clients with IRS difficulties.

The e-Services tools include access to the Transcript Delivery System. This allows tax practitioners to easily obtain any of the five types of taxpayer transcripts. Electronic Account Resolution aids the problem-solving process. A tax pro with EA certification can use EAR to submit inquires and receive IRS responses without the telephone wait times involved in traditional Practitioner Priority Service calls. However, EAR is only available for resolving taxpayer account issues. The system does not handle matters involving audit, appeals, or collections.

Several e-Services features are applicable to the ordinary endeavors conducted by EAs. Discovering these tools will save time and reduce frustration. They are therefore fundamental paths for deployment of expertise from Enrolled Agent training. For example, an EA can obtain complete tax histories for new clients. Electronic copies of tax returns for the past three years are available as well as income reporting information for the past ten years. Especially vital is access to IRS adjustments of originally filed tax returns.

When using e-Services for procurement of prior year tax info, an EA is able to ascertain if a new client has a clean compliance history. Taxpayers with that circumstance are eligible for administrative waivers of  penalties related to isolated events. The EAR service is available to request and receive penalty abatement.

By the end of May each year, e-Services provides access to wage and income reporting for the immediately preceding year. This gives tax practitioners access to W-2s and 1099s missing from the records of new clients. An EA is able to file an annual Form 8821 via e-Services to assure receiving copies of IRS notices to a client. Another valuable e-Services feature for EAs is set up of direct debit installment agreements. Enrolled Agents who familiarize themselves with all of the uses for e-Services are certain to improve the speed and accuracy of their projects – particularly with new clients.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

One common situation where taxpayer collaboration aids Enrolled Agent tax preparation is charitable donation of items other than cash. Frequently, taxpayers only know that giving property to a charity is somehow a tax benefit, but are unaware of how the deduction is accomplished. By proceeding carefully, a taxpayer can give an EA needed details as well as substantiate that conditions are satisfied for claiming the tax deduction.

The most important step for non-cash donations is obtaining receipts from the charitable organizations. These state the contribution dates. In addition, a receipt should describe the donated property. A general description is acceptable, such as furniture or clothing. However, enough detail is required to identify fair market values for the items. A tax preparer can only help ascertain values when taxpayers state quantities and property condition. Passing the Enrolled Agents exam is proof of tax expertise, not mind reading ability. Most importantly, individuals who immediately write property descriptions on their donation receipts are less likely to forget what was donated.

The trickiest part of jobs for Enrolled Agents involving non-cash gifts to charity is getting taxpayers to give fair market values for their donations. However, these matters are simplified when people buy items that they donate right away. For instance, the donation value of purchases for a charitable food drive is the cost paid for the grocery items. A similar situation arises when a taxpayer buys toys at Christmas for a charity that gives them to underprivileged children.

Enrolled Agents usually present some guidelines about donations of used items, without making their own guesses about values. The value of used non-cash property is typically the amount of money that the charitable recipient can receive from selling it. The websites of some charitable organizations have donation values listed for standard items. However, in many cases, a fair market value is determined by a more diligent search of prices for comparable items sold on eBay or Etsy or Craigslist. An EA may provide the service of conducting value searches or demand that clients reach their own conclusions. The latter seems realistic because taxpayers need to retain a record of how fair market values were determined.

Donations of clothing or household goods are only tax deductible if the items are in good used condition or better. The IRS doesn’t offer a precise definition of this term, but Enrolled Agents should remind individuals that donated items must be usable by a recipient. Junk given to charity is clearly not allowed as a tax deduction.

One especially delicate area about charitable giving is automobile donations. An Enrolled Agent course carefully conveys special rules for donated cars, boats, and aircraft. In these cases, the fair market values are the prices paid in private party sales. The crucial step is obtaining information from the charity about the amount it received by auctioning the donated property.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

Auditing is an especially common accounting service to non-profits. The annual audit assures that a non-profit is performing the charitable function it was created to accomplish. Key audit objectives described in CPA review material deliver vital assurances to donors of non-profits just as public company audits benefit investors. Audited financial statements are particularly valuable to providers of grant money for non-profits.

A very large donor of grants to non-profit entities is the US government. The Office of Management and Budget administers $600 billion of grants every year to non-profits as well as to state and local governments. The OMB publishes guidelines for audit of governments and non-profits in Circular A-133. Auditing of these entities is referred to in CPA study as single audits.

Proposed reforms to Circular A-133 impact the circumstances under which a single audit is required. If approved, a new threshold will exist for classification as a small non-profit that’s exempt from obtaining a single audit. Single audits would be triggered only when total annual grant spending by the organization exceeds $750,000 rather than the current level of $500,000.

The suggested OMB measure is part of a process for streamlining the grant system and eliminating unnecessary costs. However, the proposal does not remove the need for non-profits to procure special accounting services. A requirement would remain for small non-profit organizations that spend less than $750,000 per year in federal grants to make records available for inspection. Therefore, accountability of non-profits to the standards in CPA preparation courses remains in effect.

The OMB proposal also mentions which federal grant programs necessitate single audits. In addition, the mandatory compliance requirements tested in the single audit process are reduced to only six in the OMB proposal from the current number of fourteen. Among the factors for testing are common audit elements understood from CPA courses, such as cash management and reporting procedures. Also relevant to non-profits in particular are monitoring for allowed activities and eligibility for specific grants.

A new requirement would impose disclosure of more detail about questionable findings in a single audit. However, the transaction amount that triggers such inquiries would rise from $10,000 to $25,000. Best of all for CPAs specializing in the non-profit sector is that eight existing OMB circulars pertaining to different non-profit categories are expected to become one combined document. At least that change will make keeping up with OMB audit standards a less challenging task.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

A little explanation from tax pro to taxpayer is highly beneficial. Done correctly, this process should simplify the facts from tax preparer training about S corp losses. Basically, a loss will only reduce a shareholder’s taxable income from other sources to the extent that the deficit was funded with the individual’s own money. An S corporation that incurs a loss by using borrowed funds from a financial institution is losing the bank’s money rather than shareholder dollars.

That’s enough explanation for the average individual taxpayer owning S corporation shares, but tax preparer jobs demand much greater knowledge. A tax expert uses the concept of shareholder basis to completely understand pass-through losses. Each shareholder of an S corporation can have two categories of basis when funding the operation. One is stock basis, which is often relatively low. This is the first type of basis reduced by corporate losses.

A shareholder may also lend money to the corporation. This creates debt basis. Corporate borrowing from the shareholder allows for applying loss to debt basis. The lesson from tax preparation courses about this situation is that the shareholder may pass through the loss to his personal tax return. Loans of new money by the shareholder to the corporation are increases in debt basis. Repayments by the S corp to the shareholder reduce the debt basis.

An S corporation that generates losses after borrowing from a party other than the shareholder is generally a troubling matter. Encountering this circumstance in either an exercise for a tax preparer course or actual tax return preparation results in no deduction of the loss by the taxpayer. No reduction of debt basis occurs unless the shareholder increases basis before the corporation’s year ends. Fortunately, losses are carried forward and become deductible when basis is restored by corporate profit or future loans from the shareholder.

Some details about methods for increasing basis are often useful information for shareholders. Ordinary taxpayers owning S corporation shares don’t typically know the nuances abut their situations that an expert learns when becoming a tax preparer. Shareholders can increase their basis by personally borrowing money and then loaning the same funds to their S corporations. In addition, shareholder basis is increased when the individual uses personal funds to pay some of the corporation’s debt from an unrelated lender. When a tax pro explains these techniques, it can take some of the sting out of bad news delivered to S corp shareholders about basis limitations.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

The typical process of determining cost basis begins with identifying some facts from the taxpayer. Outlining details exactly like the elements of Enrolled Agent exam questions permits thorough evaluation by an EA. The first inquiry entails discovery of how the taxpayer acquired the asset. Unknown basis is often a consequence of the taxpayer obtaining ownership by gift or inheritance. These circumstances are confusing territory to the average person.

Fortunately, a tax pro with Enrolled Agent training can quickly dispense with cost basis determination for inherited assets by inquiring about the date of death. Historical prices for assets consisting of publicly traded securities are available from a variety of websites. A manual process is then used to account for stock splits and thus derive a basis per share. That step becomes necessary when the taxpayer sells only some of the inherited shares. Conversely, if all the inherited shares are sold, only the total basis amount is needed rather than the basis per share.

Inherited property other than securities – such as real estate – is a little trickier. In these cases, the jobs for Enrolled Agents require asking about values listed on probate schedules or estate tax returns. The key in these instances is using the date of death value. EAs must caution taxpayers against using alternative valuation dates.

Properties acquired as gifts receive a completely different basis determination process. The basis of a giver is transferred to the gift recipient. An EA has no way of knowing the basis of the gift giver. So, these cases are entirely dependent upon the taxpayer knowing the basis from the person who gave the gift.

Complications with researching cost basis are most common for securities with unusual histories. For example, reinvested dividends present conditions of multiple holding periods and purchase prices. Moreover, an EA sometimes encounters a taxpayer who inherited a security plus bought more of it on subsequent dates.

Having a formal history of numerous purchases is particularly useful. For example, a taxpayer can normally procure a schedule for his transactions in an employer stock purchase plan. EAs use these to manually calculate cost basis for their clients. However, some software options are available that simplify the process.

Accurate determination of cost basis is a frequent procedure for Enrolled Agents. Taking time to communicate the difficulty to taxpayer clients demonstrates the benefit of hiring a professional with Enrolled Agent education. It also justifies extra fees charged for the service. Brief explanations about capital gains are often enlightening experiences for taxpayers. Especially crucial is comprehension of how uncovering cost basis lowers the calculated tax.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

If you’re a tax preparer lacking EA certification who avoided 2012 tax returns with the EITC because of the new standards, now is the time to organize for handling future EITC claims. In fact, a tax practitioner who prepares few or no returns with the EITC should be aware of expanded due diligence in this area because the IRS could apply similar steps to other matters.

A sound strategy for improving your due diligence procedures and becoming a better tax preparer is pursuing Enrolled Agent exam prep. Among the subjects covered is the EITC and use of Form 8867. The first three sections of this form address taxpayer eligibility for the EITC. Some requirements for the tax credit are applicable to all taxpayers claiming the EITC and other conditions concern only taxpayers with qualifying children.

The fourth part of Form 8867 is the due diligence steps of the tax preparer. Back in 2007, this section consisted of four questions. The objective was enforcement of tax preparer due diligence by answering all questions affirmatively. New elements of Form 8867 were introduced in EA CE for 2011 tax returns. The form was expanded to include attachment of copied documents in addition to noting when, how, and from whom information was used to determine EITC eligibility.

For 2012 tax returns, the fourth part of Form 8867 expanded to twelve questions. An Enrolled Agent review course covering the EITC topic now conveys details about Form 8867 questions addressing such factors as a qualifying child of a non-parent taxpayer and the possibility of another person claiming the child. A primary consideration is the “knowledge requirements” for the EITC. In most cases, additional questions are asked of taxpayers to assure EITC eligibility and qualifications of children. Form 8867 provides places for tax preparers to respond about whether such questions were asked and if responses are documented.

A tax practitioner is now required to verify documentation of a taxpayer’s qualifying children for the EITC. Form 8867 has boxes to check about the type of documentation relied upon. Examples of acceptable documents are school records, landlord statements, medical records, childcare provider statements, and social services records. Tax preparers must retain copies of the documentation in their files for three years. Additional supporting documents are required for a disabled child that qualifies a taxpayer for the EITC.

Extra precautions are demanded when the earned income of a taxpayer with an EITC claim includes self-employment. Tax practitioners must obtain assurance that the business exists. More checkboxes on Form 8867 are used to identify documents supplied by the taxpayer about self-employment.

Starting with 2012 tax returns, the IRS is assessing due diligence penalties for failure to submit Form 8867 with any tax return claiming the EITC. The penalty for each incidence of non-compliance with EITC due diligence requirements is $500. Preparing EITC claims is a valuable service of tax practitioners. Those who obtain certification as Enrolled Agents are assured of possessing the training for always satisfying EITC due diligence standards.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

The trouble is not a failure to correctly follow accounting standards from courses for CPA licensing. In fact, a now former partner at the KPMG office seems to possess a full understanding of accounting. His problem is how he used this ability. Scott London is charged with insider trading by the US Department of Justice as well as the Securities and Exchange Commission. He is also under investigation by the Federal Bureau of Investigation.

London knows accounting from his CPA courses very well. He was in charge of audit at the LA office of KPMG. He allegedly delivered information to a friend about five KPMG public company audit clients in exchange for cash, jewelry, and entertainment. London was a 29-year veteran of the Big 4 firm.

KPMG is not the only Big 4 auditor to experience this type of difficulty. The former Vice Chairman of Clients and Markets at Deloitte was given a 21-month prison sentence in October 2012 after pleading guilty to trading on inside information he obtained from client audits between 2006 and 2008.

Confidentiality is right at the top of audit standards in CPA materials along with independence and trust. Therefore, KPMG terminated London and resigned as auditor for two of its West Coast clients in April 2013 – nutritional supplement company Herbalife and footwear maker Skechers USA.

The SEC claims that London delivered non-public details to Bryan Shaw, his friend and golf partner. Shaw used the confidential information to generate $1.2 million of securities trading profits, which helped maintain his struggling family-operated jewelry business. The tips from London continued until March 2013 after starting in late 2010.

Authorities also stated that London provided secrets about Deckers Outdoor Corp., RSC Holdings, and Pacific Capital. KPMG did not immediately announce any action related to audits of those companies. However, the accounting firm did withdraw five years worth of audit work for Herbalife and Skechers. London may have followed the standards from CPA study as the lead partner for audits of these companies, but the tainted matter of independence is a substantial disturbance.

While KPMG condemned London’s actions, the firm revealed that it has no reason to believe any financial reports of Herbalife or Skechers contain material misstatements. London claims that his conduct had no bearing on how he conducted his duties. Instead, he states that he simply used the information uncovered by the audits to help his financially strained friend. If that’s his entire action, the SEC’s civil charges seeking unspecified monetary penalties seem justified.

However, London is further confronted with the criminal charge of accepting cash and gifts in exchange for the confidential info and assisting Shaw in structuring securities transactions to avoid detection of the scheme. Conviction for that offense means up to five years in prison along with a fine.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

Most of the impact is caused with state income tax returns. However, married couples in community property states filing separate federal tax returns have an option to utilize the rules in their state for dividing income. Enrolled Agents must exercise caution for residents of these states when following the federal income tax rules from EA training. Some couples may want to elect reporting of half of each other’s income in accordance with community property law.

Every EA needs some appreciation of this matter whether or not working in a community property state. Oftentimes, a key factor is a taxpayer’s move from a community property state. That is the situation an Enrolled Agent job would have entailed if a certain married woman in Idaho had hired an EA. According to a recent decision by the Idaho Tax Commission, she and her husband owe tax on half of his income that was earned in another state.

The woman’s problem was that she and her children moved to Idaho while her husband remained in their Washington home. The husband had searched for a job in Idaho, but kept his employment in the neighboring state of Washington. Fortunately for the husband, his continued residency in Washington kept him from having to file an Idaho tax return. Meanwhile, an Enrolled Agent career is a little easier in Washington because that location has no state income tax.

The husband did visit his family in Idaho, but never changed his domicile. This determination by the Idaho Tax Commission might have been different if he had already lived in Idaho and moved to Washington. Those circumstances could indicate that he still maintained a domicile in Idaho despite working in Washington. Under either scenario, the husband’s tax home for federal tax purposes is clearly Washington. An Enrolled Agent study course points out that a tax home is the principal location where income in earned, regardless of the taxpayer’s domicile or the residence of his family.

Anyway, since the husband never abandoned his domicile to take another one, even the Idaho authorities ruled that he was still domiciled in Washington. But, the couple’s difficulty doesn’t end there because Idaho is a community property state. Equally important, so is Washington. An Enrolled Agent working on their federal tax return who understood community property rules could have advised the couple about the state tax result. Idaho looked to the treatment of marital income in Washington and found that the wife was entitled to half. Washington only considers a spouse’s income in that state as separate property when the couple lives apart due to marital discord. That was not the situation for this couple. Hence, the wife owed tax to Idaho on half of her husband’s income earned in Washington. At least the husband’s domicile in Washington precluded Idaho from collecting tax on all of his income.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

The normal tax reporting process for income received on rental real estate is well understood by Enrolled Agents. The rent collected is part of the property owner’s taxable income. Expenses directly attributable to the necessary operation of the rental activity are deducible against the rent. Whether a rental loss is deductible against other sources of income is subject to limitations described during Enrolled Agent training. As long at a taxpayer participated in some active manner in the management decisions concerning the rental property, up to $25,000 of loss is deductible against other type of income – so long as the taxpayer’s total income does not exceed a specified threshold.

Those details already comprise a lot of information absorbed by tax professionals meeting Enrolled Agent requirements, which the general public rarely understands. But, an EA is also knowledgeable about many more factors concerning rental income. First on the agenda are some special considerations for property that is sometimes rented and sometimes occupied by the owner. Under these circumstances, real estate is only treated like typical rental property when the owner’s occupancy is less than 10 percent of the rented days or a total of 14 days, if that is a larger number.

When owner occupancy of the property exceeds the threshold, Enrolled Agent tax work divides the expenses proportionately between deductions against rental income and non-deductible personal expenses. The situation is much easier to address – and more favorable to the taxpayer – when a property is rented for 14 days or fewer. This is the condition for the fortunate Augusta residents with homes on or near the golf course. No determination of rental expenses is necessary because they are not required to report the rent as income.

Anyone who maintains a top level of tax expertise with Enrolled Agent education, knows that the Internal Revenue Code is not designed to give taxpayers accidental advantages. Tax breaks are established by design. And the rule about renting a home for less than 15 days was created intentionally in the 1970s. It was a reward to wealthy homeowners in areas such as Augusta, who are more likely than ordinary folks to rent their property for limited periods – and contribute to the election campaigns of Congressmen.

Of course, the tax benefit from rental of a home lasting less than 15 days is available to anyone. The only problem a person has is getting some corporate executives to plunk down several thousand dollars for a few nights staying at his home when it’s not near a celebrated golf course.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

One of President Obama’s proposals is the so-called Buffett rule, which would create a minimum tax amount for anyone with adjusted gross income of at least $1 million. Obama calls this the Fair Share Tax. A study of its components in a tax preparer course would indicate that it aims to reduce the effect of itemized deductions. Should Congress pass this statute as suggested by the President, it will impose a minimum tax of 30 percent on adjusted gross income minus 28 percent of total itemized charitable donations allowed after applying the overall limitation on itemized deductions.

The Fair Share Tax becomes even more complicated for tax preparer jobs involving returns with adjusted gross incomes between $1 million and $2 million. In that range, the tax is gradually phased in until reaching its full peak for incomes of $2 million and above. The Office of Management and Budget estimated that this tax rule should increase government revenue by $99 billion over 10 years.

Work for people with incomes below $1 million is also revised under Obama’s proposed budget. Details studied for becoming a tax preparer would change to reflect limitations on itemized deductions for single taxpayers with incomes over $200,000 and jointly filing married couples with more than $250,000 of income. Taxpayers with incomes surpassing these thresholds could only utilize adjustments to taxable income up to a maximum tax rate of 28 percent. This proposal limits using income reduction with the foreign income exclusions, tax-exempt interest, employer-provided health insurance, and retirement plan contributions as well as itemized deductions and above-the-line adjustments. Congress did not pass an identical proposal by the President for the previous annual government budget.

Some other items in Obama’s budget will also reshape tax preparer training if enacted. These include an expanded Child and Dependent Care Tax Credit. Also on the President’s agenda is a tax credit designed to encourage employers to offer retirement savings plans plus a recommendation to impose a $3 million limit on the size of any taxpayer’s retirement account.

Miscellaneous items in the President’s budget include a proposal that has been defeated in past years to treat carried interests in partnerships – such as hedge funds – as ordinary income instead of capital gains. Obama also suggests making permanent the increased limits currently in effect for deductions under Section 179 of business equipment purchases.

Several proposed administrative changes are notable in the President’s budget. Tax preparers would be affected by rule changes that require paper filed tax returns to include a printed 2-D bar code as well as extend paid preparer due diligence requirements for returns claiming the Earned Income Tax Credit. Tax professionals with certification as Enrolled Agents will find Obama’s budget has new rules concerning application for an Offer in Compromise and a proposal to index tax penalties to the inflation rate.

A particularly extensive component of the Obama budget proposal would return the estate and gift tax situation to the 2009 rules. That would place the estate tax exemption at $3.5 million and the lifetime exclusion from gift tax at $1 million. Neither amount would be indexed to inflation.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.