2006 Articles

2006 Legislative agenda item: Amendment to Applicable Sections of the Internal Revenue Code—Changing the deductibility of attorney fees September 2006 DISCLAIMER: The following Comments are the individual views of the members of the Federal Taxation Section Council of the Illinois State Bar Association and do not represent the position of the Illinois State Bar Association.

2006 legislative agenda item: Amendment to applicable Sections of the Internal Revenue Code—Changing the half-year age conventions to full-year age conventions for retirement plan distribution purposes September 2006 DISCLAIMER: The following Comments are the individual views of the members of the Federal Taxation Section Council of the Illinois State Bar Association and do not request the position of the Illinois State Bar Association.

Chairman’s Corner By Thomas Vasiljevich September 2006 As the incoming Chair of the Federal Taxation Section Council for 2006-2007, I want to welcome you to what should be another exciting and productive year for the Section Council.

Employee benefits update By David R. Shannon March 2006 No policy, contract, certificate, endorsement, rider application or agreement offered or issued in this State, by a health carrier, to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services or of a disability may contain a provision purporting to reserve discretion to the health carrier to interpret the terms of the contract, or to provide standards of interpretation or review that are inconsistent with the laws of this State.

Estate and gift tax update By Sarah Delano Pavlik March 2006 New Amounts for 2006. The following amounts became effective on January 1, 2006:

Estate, Gift, and Generation Skipping Tax Update By Kelli E. Madigan & Joseph P. O’Keefe April 2006 In Estate of Smith v. U.S., the District Court and the Fifth Circuit Court of Appeals held that the value of individual retirement accounts included in a decedent’s estate could not be discounted for the anticipated income tax to be paid by the estate or IRA beneficiaries upon receipt of the distribution of the IRA funds.

Individual income tax update By Richard M. Colombik & Linda Godfrey June 2006 In Comm’r v. Banks, 543 U.S. 426; 125 S. Ct. 826 (2005), the Supreme Court held that a taxpayer’s gross income from the proceeds of litigation included the portion of the damages recovery that was paid to his attorneys according to a contingent fee agreement.

Internal Revenue Service Liaison Update By Thomas F. Arends September 2006 The editorial staff of the Newsletter would like to inform members of the Section that Mr. Thomas Arends of the Council currently serves as liaison for the Section to the Internal Revenue Service.

Internal Revenue Service Liaison Update By Katie S. Beard June 2006 The following is a summary of select materials presented by the author at the 2005/2006 Federal Tax Law Ed Program in Chicago and Springfield.

Internal Revenue Service Liaison Update By Thomas F. Arends March 2006 IRS Announcement on Tax Lien Filings and Releases: The editorial staff of the newsletter would like to inform members of the Federal Taxation Section that Mr. Thomas Arends of the Section Council currently serves as liaison for the Section to the Internal Revenue Service.

Legislative agenda item: Alternative minimum tax September 2006 DISCLAIMER: The following comments are the individual views of the members of the Federal Taxation Section Council of the Illinois State Bar Association and do not represent the position of the Illinois State Bar Association.

Legislative agenda item: Estate Tax Repeal September 2006 DISCLAIMER: The following Comments are the individual views of the members of the Federal Taxation Section Council of the Illinois State Bar Association and do not represent the position of the Illinois State Bar Association.

Liaison meeting with Congressional legislative aides—Discussion issue: Employee misclassification September 2006 DISCLAIMER: The following discussion and comments are the individual views of the members of the FEDERAL TAXATION SECTION COUNCIL of the Illinois State Bar Association and do not represent the position all of the Illinois State Bar Association.

Message from the Chair By Thomas F. Arends June 2006 As Chair of the Federal Taxation Section Council for past term, I would like to thank all of the members of the Council for their participation in Council activities and assistance in meeting our goals for the year.

Message from the newsletter editor By Sarah Delano Pavlik March 2006 Each year the Section Council makes a trip to Washington, D.C. to promote our legislative agenda to members of the Illinois Congressional Delegation.

News from the IRS By Sarah Delano Pavlik March 2006 Political Campaign Intervention. On February 24, 2006, the IRS released a report on its examination of political activity by tax-exempt organizations during the 2004 election campaign.

Recent developments regarding retirement and welfare benefit plans By Karen N. Brandon April 2006 Qualified retirement plans under IRC § 401(a) must now follow Revenue Procedure 2005-66 to apply for determination letters from the IRS.

Review of 2005 Hurricane Tax Relief legislation By Donna F. Hartl April 2006 The Gulf Opportunity Zone Act of 2005 (“GOZA”) was signed on December 21, 2005. GOZA supplements the Katrina Emergency Tax Relief Act of 2005 (“KETRA”) and grants tax relief to individuals and businesses affected by Hurricanes Katrina, Rita, and Wilma. GOZA also includes technical corrections to 10 tax acts.

Tax Increase Prevention and Reconciliation Act of 2005: Summary of individual income tax provisions By Thomas F. Arends September 2006 On May 17, 2006, President Bush signed into law H.R. 4297, the Tax Increase Prevention and Reconciliation Act of 2005.