The Ninth Circuit Court of Appeals held that courts and the IRS have no discretion to reduce the amount of the late-filing penalty for tax-exempt organizations under IRC § 6652(c)(1)(A), overruling a district court decision (Service Employees Int’l Union, docket no. 07-17256 (9th Cir. 3/17/10)). The Service Employees International Union
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President Signs Hiring Incentives Act With Tax Provisions
President Barack Obama on Thursday signed the Hiring Incentives to Restore Employment Act (HR 2847). The bill passed the House on March 4 and the Senate on Wednesday. The bill contains several tax items, the biggest of which is a payroll tax credit for employers who hire workers who have
GASB Offers $5K Grant; Proposals Due May 28
GASB is soliciting proposals for the Gil Crain Memorial Research Grant. Applications for the $5,000 grant are due May 28. GASB will announce the recipient on June 15. The grant encourages the academic community to conduct applied research that is relevant to the board’s standard-setting activities. Applicants’ proposals may address
IRS Issues 2010 List of “Dirty Dozen” Tax Scams
The IRS released its annual list of scams that taxpayers should watch out for. The IRS uses the list to alert taxpayers both to potential swindles as well as areas where the IRS is aware that taxpayers will try to cheat. The list, which the IRS dubs the “dirty dozen,”
Growing Opportunities: The Agricultural Chemical Security Credit
During these depressed economic times, taxpayers are increasingly confronted with issues related to cash flow management and the need to reduce taxes. In many cases, taxpayers are looking at all possible tax-saving opportunities. There is a little-known tax credit opportunity that may bring additional benefit to taxpayers that deal with
FASB, IASB Proposal Seeks to Clarify Reporting Entity Concept
FASB and the IASB Thursday published an exposure draft, Conceptual Framework for Financial Reporting: The Reporting Entity, that is part of a joint project between the boards to develop a common and improved conceptual framework for developing future accounting standards. The ED discusses what constitutes a reporting entity, which in
Web Lookup for Recovery Payments Coming Soon; Automated Phone Service Now Available
The IRS has established an automated telephone service to confirm whether taxpayers received an economic recovery payment in 2009. The Service also said on its Web site that it will provide a Web-based service, “Did I Receive a 2009 Economic Recovery Payment?” for looking up the information, starting March 23.
Comment Deadlines Nearing for Certain Clarified Exposure Drafts
The Auditing Standards Board recently issued additional Proposed Statements on Auditing Standards resulting from its clarity project, through which all of its auditing standards will be redrafted over the next one to two years. The goal of the clarity project is to make auditing standards easier to read, understand and
IRS Designates Chile Earthquake a “Qualified Disaster”
On Tuesday, the IRS designated the Feb. 27 earthquake in Chile as a “qualified disaster” for purposes of IRC § 139 (Notice 2010-26). As a result, victims of the earthquake who receive qualified disaster relief payments will be able to exclude those payments from income. The notice also allows employer-sponsored
Guidance Intended to Help Institutions Fight Money Laundering, Terrorist Financing
The Financial Crimes Enforcement Network (FinCEN) and several other financial institution regulators issued guidance to clarify and consolidate existing regulatory expectations for obtaining beneficial ownership information for certain accounts and customer relationships—information that the agencies said can help financial institutions better understand and address money laundering and terrorist financing risks,
IRS Provides Guidance on Deemed Dispositions by Canadian Emigrants
The IRS has issued guidance for individuals who emigrate from Canada and wish to make an election under the U.S.-Canada income tax treaty regarding Canadian departure tax (Revenue Procedure 2010-19). Under Article XIII(7) of the U.S.-Canada treaty, if an individual is treated for purposes of taxation by one of the
AICPA Extends Contract With CPA Exam Partners
The AICPA, the National Association of State Boards of Accountancy (NASBA) and Prometric have extended until 2024 their contract to jointly offer the CPA Examination in the U.S. The agreement represents a 10-year extension of the exam contract. Under the partnership, the AICPA is responsible for developing and scoring the
IRS Extends Comment Period for Uncertain Tax Positions Reporting Proposal; New Schedule Planned for Tax Year 2010
The IRS followed up Friday on its January announcement about plans to require certain business taxpayers to report uncertain tax positions on their returns. It extended an ongoing comment period on the plan and announced that it will start requiring the reporting for tax years beginning in 2010 (Announcement 2010-17).
Safe Harbor for Failed Like-Kind Exchanges Where Qualified Intermediary Goes Bankrupt
The IRS has provided a safe harbor for taxpayers who start a like-kind exchange but fail to complete the exchange because the qualified intermediary (QI) goes bankrupt and defaults on its obligation to acquire replacement property (Revenue Procedure 2010-14). Taxpayers often use QIs to help them complete a tax-free like-kind
President Signs Extension of COBRA 65% Subsidy
President Barack Obama signed into law on Wednesday the Temporary Extension Act of 2010 (HR 4691), hours after the Senate passed it by a 78–19 vote. The main purpose of the bill is to extend unemployment benefits and health care subsidies for the unemployed, but it also extends through March
IRS Will Process Medical Residents’ FICA Refund Claims for Periods Before April 1, 2005
The IRS has announced that it will accept that medical residents are exempt from FICA taxes under the student exception in IRC § 3121(b)(10) for periods ending before April 1, 2005 (IR-2010-25). The Service said it will start contacting hospitals, universities and medical residents who have filed FICA refund claims
IRS Extends Relief for Some FBAR Filers; Prop. Regs Clarify Certain FBAR Definitions
The IRS on Friday suspended any requirement for persons other than U.S. citizens and domestic entities to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), otherwise due on June 30, 2010. The Service also extended until June 30, 2011, the deadline for filing an
The Proper Timing of Workers’ Compensation Deductions
For companies with more than a de minimis amount in their workers’ compensation reserve, it may be worthwhile to review the details underlying the reserve amount. The reason? These days a significant portion of a workers’ compensation reserve likely results from amounts due to medical service providers for treatment already
How the R&D Tax Credit Is Calculated
Editor’s note: This is a Web-exclusive sidebar to “Navigating the R&D Tax Credit,” in the March 2010 issue of the JofA. Regular research credit. The RRC is an incremental credit that equals 20% of a taxpayer’s current-year QREs that exceed a base amount, which is determined by applying the
IRS Issues Regulations on 2009 Reduced Estimated Tax Options
The IRS on Friday released temporary and proposed regulations relating to reduced estimated income tax payments for qualified individuals with small business income in 2009 (TD 9480 and REG-117501-09). The regulations provide guidance on who is a qualified individual and what is a small business for these purposes. The American
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