Posted on Fri, Apr 20, 2012 @ 09:07 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
House Passes Republicans’ Small Business Tax Cut Bill
The House has approved Republican-backed legislation to provide a tax cut of up to 20 percent for one year to companies with fewer than 500 employees.
The measure, approved by a margin of 253-173, passed Thursday mostly along party lines. While the bill is aimed at small businesses, Democratic lawmakers complained that most of the benefits would go to much larger companies. It is not expected to go far in the Democratic-controlled Senate.
Under the legislation, known as the Small Business Tax Cut Act, businesses with fewer than 500 employees would be eligible for a 20 percent deduction on their domestic business income, restricted to half of the amount of wages paid to employees. Accounting Today
Marriage Penalty Relief May Be Coming to an End
It’s been said that you can’t tell the players without a scorecard. Where I need a scorecard is to figure out which tax provisions expired at the end of 2011, and those slated to give up the ghost at the end of 2012. Luckily, the Joint Economic Committee has a Web site that lists all of the expiring provisions of recent memory, together with the dates they expired or will expire.
One of them, the marriage penalty relief provision, hasn’t garnered all the attention it might have, in part because biggies such as the AMT exemption tend to pre-empt any interest in some of the lesser provisions.
But marriage penalty relief, along with the AMT exemption and the Bush tax cuts, is set to expire at the end of this year, and will affect the tax liability of over 40 percent of the taxpaying public, according to the Congressional Budget Office. Accounting Today
IRS Prodded to Cut Identity Theft and Tax Gap
Internal Revenue Service and Treasury officials faced questions from Congress on Thursday over how well the IRS is responding to taxpayer identity theft concerns and efforts to close the growing tax gap.
IRS Deputy Commissioner Steven T. Miller revealed at a hearing of the House Oversight and Government Reform Subcommittee on Government Organization that the IRS general counsel has given permission to the agency to finally share information with taxpayers whose identities have been stolen about how the tax refund money was used so victims can then bring the evidence to local law enforcement.
Members of Congress have been pushing the IRS to share more information with local law enforcement authorities, but up to now taxpayer privacy protections have gotten in the way. By providing the information to the affected taxpayers, the IRS will be able to help more identity theft victims. Accounting Today
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Thu, Apr 19, 2012 @ 10:32 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
Medical Device Makers Fear New Excise Tax
Financial executives in the medical device industry say the new excise tax included in the health care reform law will have a major impact on reducing their bottom line, according to a new survey by KPMG.
The survey found that 40 percent of the medical device industry financial executives polled said their companies are considering price increases and cost reductions such as decreasing headcount and changing their manufacturing processes in response.
Under the health care reform law, manufacturers and importers of medical devices would be subject to a 2.3 percent excise tax. The Internal Revenue Service and the Treasury Department issued proposed regulations for the tax in February. Accounting Today
Small Business to Uncle Sam: Simplify the Tax Code
In a recent survey of 350 small business owners by the National Small Business Association, a majority (56 percent) cited the administrative burden of filing taxes as the most significant tax-related challenge facing their companies. In fact, a slightly lower number -- 44 percent -- said the financial burden was most significant.
This discrepancy likely reflects the fact that nearly two-thirds of respondents spent more than 40 hours on the job, with 28 percent spending in excess of three weeks. And, nearly all -- 85 percent -- hire a tax professional to help them accurately meet their obligations with the IRS.
By nearly any measure, the cost to comply with tax regulations has grown, even over just the past year or two. In 2010, for instance, 57 percent of respondents spent more than 40 hours filing taxes; a hefty proportion by any measure, but slightly lower than the 64 percent that did so in 2011. Also in 2011, 53 percent of business owners responding spent more than $5,000 completing, or hiring others to complete, their tax forms. That was up slightly from 50 percent in 2010. More than three-quarters of respondents said that federal taxes have either a moderate or significant impact on the day-to-day operations of their business. Business Finance
Taxes--Who Really is Paying Up
Even as President Barack Obama pitches the "Buffett rule" to ensure that millionaires pay at least a 30% tax rate, some commentators are decrying the fact that about half of U.S. taxpayers don't pay any federal income tax. But our tax system is more complex than any sound bite or simplistic headline can illustrate.
Some multimillionaires do pay a lower effective income-tax rate than some middle-income taxpayers; receiving a chunk of your income via long-term capital gains rather than a paycheck is just one reason that happens. But the top 20% of income earners paid 70% of federal taxes in 2007, according to the most recent data available from the Congressional Budget Office.
That group also pulled in 60% of total pretax income, according to the CBO. Meanwhile, 46% of taxpayers don't pay any federal income tax, but they often pay a hefty portion of their income to levies at the federal, state and local level. The Wall Street Journal
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Wed, Apr 18, 2012 @ 09:53 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
Congress Mulls Tax Reforms to Spur Retirement Savings
The House Ways and Means Committee held a hearing Tuesday on tax reform and tax-favored retirement accounts as it sought to find ways to use tax policy to encourage more Americans to save for retirement. One of the topics of discussion was a bill introduced by Rep. Richard Neal, D-Mass., that would amend the Tax Code to allow companies to set up automatic IRA arrangements for employees in which contributions would be automatically deducted from their paychecks if they are not already covered by qualified retirement plans. Accounting Today
Lawmakers consider changing tax breaks on retirement savings
The painful trade-offs of tax reform came into sharper focus Tuesday as lawmakers for the first time began considering specific tax breaks to reduce or otherwise change, starting with laws that allow millions of Americans to avoid taxes while saving for retirement.
Tax incentives for employer pensions, 401(k) plans, individual retirement accounts and other savings programs rank among the largest breaks in the tax code, costing Washington more than $200 billion a year in lost revenue.
All told, the U.S. Treasury loses about $1.1 trillion annually to more than 200 credits, deductions and other tax breaks. Politicians in both parties — including President Obama and Mitt Romney, the Republican who is likely to challenge his reelection bid — have called for recapturing some of that cash and using it to finance lower tax rates or to reduce federal budget deficits. The Washington Post
Legislation Would Relieve Tax Levies on Businesses
With Democrats and Republicans in Congress battling over competing tax legislation this week, one new bill should be able to attract bipartisan support.
On Tuesday, coinciding with Tax Day, Rep. Jim McDermott, D-Wash., a member of the tax-writing House Ways and Means Committee, introduced the Tax Levy Relief Act of 2012. The bill would give the IRS the authority to release a tax levy if it would cause an undue economic hardship to a struggling business and cost jobs. Accounting Today
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Tue, Apr 17, 2012 @ 09:35 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
Buffett Rule Blocked in Senate
The bill to institute the so-called Buffett Rule failed to overcome the 60-vote threshold needed to advance in the Senate. The bill, proposed by Senator Sheldon Whitehouse, D-R.I., and named after billionaire investor Warren Buffett, would have required millionaires and billionaires to pay a minimum tax of 30 percent. The Paying a Fair Share Act of 2012 received a vote of 51 to 45. Accounting Today
7.8 Million Tax Refunds Delayed This Season at IRS
The Internal Revenue Service delayed tax refunds early this filing season for 7.8 million tax returns, according to a report by the Treasury Inspector General for Tax Administration, which also described steep cutbacks in customer service at the IRS.
The report, which provided interim results of the 2012 filing season, noted that taxpayers who e-filed their tax returns early in the 2012 filing season experienced delays in receiving their tax refunds due to fraud detection efforts and problems with the IRS’s Modernized e-File system. The number of tax refunds delayed had most recently been estimated at 6 million. Accounting Today
IRS to Lionel Richie: Say You, Say Tax Lien
The Internal Revenue Service has filed a tax lien against singer-songwriter Lionel Richie for over $1.1 million in unpaid taxes. The tax lien was filed in Los Angeles on April 2 against the 62-year-old multiple Grammy winner for $1,130,609.11, according to E! News. Richie said the tax debt will be paid quickly. Accounting Today
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Mon, Apr 16, 2012 @ 10:24 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
With resources stretched, IRS may audit fewer folks
With a smaller budget and fewer employees, the Internal Revenue Service may conduct fewer audits this year. But don’t start celebrating just yet.
A smaller number of audits means a drop in federal revenue, as more tax cheats get a free pass. A lean IRS staff translates into less help for taxpayers seeking assistance at the same time the agency is dealing with exploding identity theft and complex changes in tax law. The Atlanta Journal-Constitution
Obama and Biden Release Tax Returns
Just a few days ahead of the tax-filing deadline, President Barack Obama and Vice President Joe Biden released their 2011 tax returns on Friday.
Obama and First Lady Michelle Obama filed a joint tax return, according to White House spokesman Jay Carney, in which they reported adjusted gross income of $798,674. Obama’s effective federal income tax rate is 20.5 percent. The Obamas also released their Illinois income tax return and reported paying $31,941 in state income tax. Accounting Today
Important Lessons Regarding Estate Valuations
The Internal Revenue Service has been aggressive in challenging estate valuations -- in some cases asserting the estate is worth more than twice the taxpayer's valuation. Here are some red flags to watch out for and ways to mitigate examination risk. The Tax Adviser, via CPA Letter Daily
More Wacky Tax Deductions
Accounting Today ‘s recent slideshow of the most outrageous tax deductions from the Minnesota Society of CPAs generated plenty of comments from LinkedIn members who pointed out some other weird tax deductions their clients had suggested. Here's a selection of some of the strangest ones. Accounting Today
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Tue, Mar 20, 2012 @ 02:45 PM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
IRS Proposes Requiring Periodic Updates of Employer Information
The Internal Revenue Service has proposed regulations that would require taxpayers with Employer Identification Numbers to periodically provide the IRS with up-to-date information.
In REG-135491-10, the IRS proposed rules last Tuesday requiring those assigned an EIN to provide updated information to the agency in the manner and frequency prescribed by forms, instructions or other appropriate guidance. The proposed regulations would affect taxpayers with EINs and are aimed at enhancing the IRS’s ability to maintain accurate information on those who have been assigned EINs. Accounting Today
The Rush to Avoid Gift Taxes
As the deadline approaches for taking advantage of the government's $5 million gift-tax exemption, estate planners are dealing with the fear of "donor's remorse." Families are looking to set up so-called irrevocable trusts to pass along assets to their heirs without paying gift tax—but worry they will change their minds later in life or will need to get the money back one day. An irrevocable trust can't be undone, making it one of the best ways to move assets out of an estate—and thus avoid estate taxes. The Wall Street Journal
IRS Seeks Volunteers for Taxpayer Advocacy Panel
The Internal Revenue Service seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisorycommittee that listens to taxpayers, identifies key issues, and makes recommendations for improving IRS service. The TAP provides a forum for taxpayers from all 50 states, the District of Columbia and Puerto Rico to raise concerns about IRS service and offer suggestions for improvement. The TAP reports annually to the Secretary of the Treasury, the IRS Commissioner and the National Taxpayer Advocate. The Office of the Taxpayer Advocate, an independent organization within the IRS, provides oversight of the TAP. Internal Revenue Service
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Mon, Mar 19, 2012 @ 11:37 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
Traps for Small Businesses
A pair of changes for 2011 could mean big headaches for taxpayers who report business or partnership income on their individual tax returns. Both changes involve so-called 1099 forms, which are reports submitted to the Internal Revenue Service so it can cross-check information from different taxpayers. The Wall Street Journal
IRS Needs to Fix Security Controls
Weaknesses in the Internal Revenue Service’s financial and tax-processing systems continue to jeopardize the confidentiality, integrity and availability of sensitive taxpayer information, according to a new report by the Government Accountability Office. For example, the IRS has not always implemented controls for identifying and authenticating users, such as requiring users to set new passwords after a prescribed period of time, or appropriately restricted access to certain servers. Accounting Today
Compilation Engagement Standards Enhanced for Small and Midsized Entities
The International Auditing and Assurance Standards Board has released a revised standard for compilation engagements, specially enhanced for the needs of small and midsized entities. The International Standard on Related Services (ISRS) 4410 (Revised), Compilation Engagements, released by the IAASB on Friday. addresses service engagements for SMEs, but is also applicable for larger businesses. The IAASB operates under the auspices of the International Federation of Accountants. Accounting Today
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Thu, Mar 15, 2012 @ 09:24 AM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
IRS Lets People Check on Tax-Exempt Organizations
The Internal Revenue Service has introduced an online search tool that will allow the public to easily check on information about tax-exempt organizations, such as charities and other nonprofits.
The new online search tool, dubbed Exempt Organizations Select Check, will help users more easily find key information about tax-exempt organizations, such as their federal tax status and filings. Accounting Today
IRS Encourages Small Employers to Check Out Small Business Health Care Tax Credit
With business tax-filing deadlines upon us, the Internal Revenue Service encourages small employers that provide health insurance coverage to their employees to check out the small business health care tax credit and then claim it if they qualify.
The recently-revamped Small Business Health Care Tax Credit page on IRS.gov is packed with information and resources designed to help small employers see if they qualify for the credit and then figure it correctly. These include a step-by-step guide for determining eligibility, examples of typical tax savings under various scenarios, answers to frequently-asked questions, a YouTube video and a webinar. IRS
Dodging a 'Cost Basis' Crisis
Selling a stock or a mutual fund is getting a lot more complicated.
New tax rules are changing how your brokers report sales of stocks, exchange-traded funds and mutual funds to the Internal Revenue Service and could deny you the full tax benefit on your investment sales.
The upshot: A little preparation now could make a big difference in tax bills later, say experts. The Wall Street Journal
Ten Common Tax-Filing Errors
Tax laws change with alarming frequency, but some taxpayer errors are perennial. Here are 10 common filing errors that often trip up taxpayers, according to Greg Rosica, a tax partner at Ernst & Young and the firm’s lead author of the Ernst & Young Tax Guide, now in its 27th year. The Wall Street Journal, via CPA Letter Daily
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Wed, Mar 14, 2012 @ 04:36 PM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
Tax Extenders Amendment Defeated in Senate
An amendment to a highway transportation bill that would have extended expired tax credits such as the Research and Experimentation Credit in exchange for freezing the salaries of federal employees for another year has gone down to defeat in the Senate.
The amendment, introduced by Sen. Pat Roberts, R-Kan., failed to reach the 60 votes needed to be added to the surface transportation bill on Tuesday. The amendment would have frozen not only federal employees’ pay, but also of members of Congress and their staff. The federal workforce is already in the midst of a two-year pay freeze that is set to expire in December. Federal employee unions opposed the amendment, arguing they should not be expected to continue to bear the cost of unrelated tax breaks. Accounting Today
Taxpayer Advocate Questions IRS Audit Effectiveness
The National Taxpayer Advocate is raising concerns about the effectiveness of the Internal Revenue Service’s increasing reliance on correspondence exams instead of face-to-face audits.
In a blog post Tuesday, National Taxpayer Advocate Nina Olson noted that the IRS has significantly increased its use of correspondence exams in the past decade or so. Between fiscal years 2000 and 2011, face-to-face audits increased by 56 percent, from 251,108 to 391,621. In contrast, correspondence-based exams, or “corr exams,” increased by 220 percent, from 366,657 to 1,173,069. Accounting Today
Whistleblower Sues IRS for Not Paying Reward
A former bank executive has filed suit against the Internal Revenue Service for failing to pay him a whistleblower award.
Joseph Insinga, a former executive with the Netherlands-based Rabobank Group, told the Washington Post that he had given documents to the IRS about how his former employer helped seven companies avoid paying hundreds of millions of dollars in taxes by setting up offshore partnerships and other entities. He filed a whistleblower claim with the IRS in 2007, but has heard nothing from the agency. Last month, his attorneys filed suit in U.S. Tax Court saying the IRS should pay him a cut of the proceeds it has collected. Accounting Today
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
Posted on Tue, Mar 13, 2012 @ 12:43 PM
Jax Tax News rounds up the stories that you may have missed, should have read or would benefit from by reading again. Save money by staying ahead of these emerging trends and developments.
Florida's Businesses Cheer Tax Cuts in New State Budget
Florida's new state budget is getting mixed reviews.
Critics are jeering funding cuts for higher education and hospitals, while supporters are cheering tax cuts for business.
Next year's budget includes a big break for businesses on their unemployment compensation taxes. It will save employers more than $800 million over the next three years by lowering the minimum tax from $170 per employee to $120. The current rate is $72 per employee. WTSP
Senate Bill Would Revoke Passports of Tax Delinquents
The Senate has unanimously approved a provision to a highway transportation bill that would revoke the passports of people with seriously delinquent tax debts.
The provision, which was part of a larger amendment by Senate Majority Leader Harry Reid, D-Nev., to the Senate version of a surface transportation bill, was approved by unanimous consent last Tuesday. The amendment would allow the State Department to deny, revoke or limit a passport for any individual whom the Internal Revenue Service has certified as having a “seriously delinquent tax debt” in excess of $50,000. The amount would be adjusted for inflation in future years.
A seriously delinquent tax debt would be one for which a notice of a federal tax lien or a notice of a levy has been filed. However, there is an exception when the debt is being paid in a timely manner under an agreement with the IRS, or if collection on the debt has been suspended because of a collection due process hearing or other relief has been requested or is pending. Accounting Today
Tax Court Disallows Cost Segregation of Apartment Building Components
In a case exploring the extent of allowable cost segregation in depreciable rental real estate, the Tax Court held that all but a small handful of items identified by the building’s owner had to be depreciated over the life of the building (AmeriSouth XXXII, Ltd., T.C. Memo. 2012-67).
AmeriSouth, a limited partnership, bought an apartment complex in 2003 for $10.25 million. AmeriSouth commissioned a cost-segregation study and then attempted to depreciate more than 1,000 building components over five- or 15-year spans, instead of the 27.5 years applicable to rental real estate under MACRS. Using its cost-segregation method, AmeriSouth deducted $3,029,029 for depreciation in the years 2003–2005.
The IRS audited the partnership under TEFRA and disagreed with AmeriSouth’s treatment of the components; it denied $1,079,751 in deductions for those years. The case ended up in Tax Court, where the IRS also argued that AmeriSouth was attempting to depreciate some assets it did not own. Journal of Accountancy
For more information on any of these topics, call Hunter & Associates at (904) 731-9222, or Contact Us electronically. We also invite you to subscribe to our monthly tax newsletter.
