Wednesday, January 03, 2007

IRS Gets Off to Bizarre Start to 2007

In two head-scratching rulings to start the New Year, the Internal Revenue Service allowed an unmarried cohabitating couple the principal residence gain exclusion under the premise that pregnancy was an "unforeseen circumstance" and refused to extend the tax deposit due date from January 2 to January 3 despite the federal mail holiday for Gerald Ford's death. In the first case, the couple had owned the house for seven months, the woman was about one month pregnant and they were living separately. The house was believed to be too small for two adults and a child but neither could pay for the rent. In the second case, there will be LIMITED opportunities under three conditions for late penalties to be waived.

I am completely perplexed by these decisions and hope that sense and reason will prevail as the year continues.


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