The Ninth Circuit recently reversed the Tax Court, concluding that the Code Section 163(h) limitations ($1 million of acquisition indebtedness and $100,000 of home equity indebtedness) should be applied on a per individual basis, and not on a per residence basis. As such, unmarried co-owners are subject to a maximum of $2.2 million in limitations, rather than $1.1 million. See Voss v. Comm.
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IRS recently issued proposed regs which implement a new Federal law authorizing states to offer tax efficient “ABLE” accounts to folks with disabilities who became disabled before age 26.
The Achieving a Better Life Experience (ABLE) account provision was designed to enable people with disabilities and their families to save for and pay for disability-related expenses.
Contributions in a total amount up the annual gift tax exclusion can be deposited to an ABLE account annually, and distributions are tax free if used to pay qualified disability expenses.
Check out IRC Section 529A for the details.
Taxpayer situations change from year to year for a variety of reasons – new job, house purchase, additional dependent(s), windfall income and/or changed deductions. Depending on your situation, this might mean you should consider a change in your withholding so you hit the necessary target of required annual pay-as-you-go payments, without allowing your employer to overwithhold, which will result in your achieving nothing more than making an interest free loan to Uncle Sam until you later file and collect your refund.
Thus, if this is you, check out Form W-4 and give an updated version of the form to your employer. Check out Publication 505 and also consider going to www.irs.gov where you will find a handy withholding calculator which may be of help.
Early last week, the U.S. Supreme Court handed down its decision in EEOC v. Abercrombie & Fitch Stores, Inc. In that case, a young Muslim woman who wore a hijab (a religious headscarf) to her interview was denied employment because the headscarf violated Abercrombie’s “look policy,” which did not allow head wear of any kind. Without discussing the policy with the applicant, Abercrombie simply denied her employment. (For more about the facts of this case, see our previous post, How Explicit Must a Request for Religious Accommodation Be?)
The Supreme Court ultimately held that Abercrombie engaged in religious discrimination by refusing to hire the applicant, Samantha Elauf. In doing so, the court rejected Abercrombie’s argument that it didn’t actually know that Elauf wore the headscarf for religious reasons. The Court held that actual knowledge is not a requirement for religious discrimination under Title VII. It was enough that Abercrombie suspected that Elauf would need an accommodation and that this was the motivation behind its refusal to hire her.
The Court’s holding suggests that Abercrombie should have notified Elauf about the “look policy” during the application process and explored possible accommodations with her. The result makes practical sense. How would Elauf have known that she needed an accommodation if she wasn’t aware of the company’s “look policy”?
The takeaway from this decision is that employers need to consider offering religious accommodation to employees, even if the employees don’t specifically request it. When an employer has reason to suspect that an employee may need an accommodation, it should broach the topic with the employee. However, employers acting on such suspicions must be careful not to engage in stereotyping that could lead to discrimination claims.
The best approach is to stick to objective facts and company policy. For example, it could lead to trouble to ask an applicant, “Do you wear a headscarf because you are Muslim?” Instead, simply inform the applicant of the company’s established policy that head wear of any kind is not allowed, and then ask if that would present any issues for the applicant. This puts the ball in the employee’s court and gives her the opportunity to request a religious accommodation if she needs one. (For more information on religious accommodation, see our Religious Discrimination page.)
MORE IRS LENIENCY REGARDING 60 DAY ROLLOVER RULE
The Internal Revenue Code says that amounts withdrawn from an IRA are not taxable as long as the entire amount is “rolled” back into the same or another IRA no later than 60 days after the distribution. Sometimes taxpayers don’t quite comply with the 60 day timeline for one reason or another, and the same Internal Revenue Code does enable IRS to allow more time in cases where failure to do so would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.
In PLR 201523023, IRS did just that in a case where the taxpayer’s failure to accomplish a timely rollover was due to an IRA custodian’s administrative procedure of not accepting “starter checks.”