Washington -- The Treasury Department and the Internal Revenue Service issued a notice and temporary regulations to prevent the use of trusts to accelerate deductions for liabilities that a taxpayer is contesting.
The use of a trust to improperly accelerate deductions under Tax Code Section 461(f) is now a “listed transaction.” A taxpayer using a trust for this purpose will have to disclose it to the IRS, and an advisor promoting its use will be required to keep a list of taxpayers.
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