The IRS announced on its website that, beginning in 2014, it will stop providing a number of taxpayer assistance services in person or over the phone and will shift those services online. The move is designed to free up IRS employees to help taxpayers deal with issues, such as identity
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Tax
Senate confirms John Koskinen as IRS commissioner
The Senate on Friday voted 59–36 to confirm the nomination of John Koskinen to be the next IRS commissioner. Koskinen was nominated by President Barack Obama on Aug. 1. The previous commissioner, Douglas Shulman, stepped down in November 2012 at the end of his term. Since May 22, Daniel Werfel
Six more countries sign FATCA agreements with U.S.
The Treasury Department announced on Thursday that the United States has signed six more bilateral agreements to implement the reporting and withholding provisions of the Foreign Account Tax Compliance Act (FATCA), P.L. 111-147. The agreements with the Netherlands, Malta, Bermuda, Jersey, Guernsey, and the Isle of Man bring the number
Guidance issued on tax treatment of National Mortgage Settlement payments
The IRS issued guidance on the correct tax treatment of payments taxpayers receive under the National Mortgage Settlement when their house is foreclosed on (Rev. Rul. 2014-2). The National Mortgage Settlement is an agreement reached in 2012 between the U.S. government and the attorneys general of 49 states and the
IRS reveals start date for 2014 tax filing season
The IRS has finally announced an official start date for the 2014 filing season: It will start accepting returns on Jan. 31. This date is 10 days later than the originally planned starting date of Jan. 21. “The late January opening gives us enough time to get things right with
Notice answers many post-Windsor questions on cafeteria plans, FSAs
The IRS continues to consider the effects of the Supreme Court’s Windsor decision on federal tax law, and its most recent guidance deals with elections and reimbursements for cafeteria plans, health savings accounts (HSAs), and health, adoption, and dependent care flexible spending arrangements (FSAs) (Notice 2014-1). Windsor, 133 S. Ct.
Immediate year-end planning opportunity for existing CRTs
On Dec. 2, the Treasury Department issued final regulations addressing the 3.8% net investment income tax under Sec. 1411 (T.D. 9644). Regs. Sec. 1.1411-3 addresses estates and trusts, including charitable remainder trusts (CRTs). The final regulations include an additional accounting method to tax CRT distributions. Distributions of income from a
IRS releases rules for in-plan rollovers of Roth accounts
The IRS released rules in question and answer format for in-plan rollovers to designated Roth accounts in retirement plans (Notice 2013-74). The most significant part of the guidance concerns the mechanics of making an in-plan rollover of funds from Sec. 401(k), 403(b), or 457(b) governmental plans, which is now permitted
Final rules permit agents to withhold FUTA for home care service recipients
The IRS on Wednesday issued final regulations permitting an agent authorized by the IRS under Sec. 3504 to perform certain acts normally required of employers to withhold Federal Unemployment Tax Act (FUTA) taxes owed by home care service recipients (T.D. 9649). Under prior regulations, agents that paid wages to home
Proposed rules would require terminating partnerships to amortize startup expenditures
On Friday, the IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses (REG-126285-12). When finalized, the regulations will apply to technical terminations of partnerships that occur on or after Dec. 9, 2013. Under Sec. 708(b)(1), a partnership terminates
Standard mileage rates go down slightly in 2014
Optional standard mileage rates for use of a vehicle will go down by one-half cent per mile for 2014, the IRS announced (Notice 2013-80). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile. For business use of a car, van, pickup truck,
Numerous provisions expire at year end
Taxpayers and practitioners breathed a sigh of relief in January when Congress passed the American Taxpayer Relief Act of 2012 (ATRA), P.L. 112-240, at the last minute, bringing some certainty to a host of provisions that had been uncertain. Many expired and expiring provisions were extended by ATRA, including the
Supreme Court resolves circuit split on 40% gross valuation misstatement penalty
On Tuesday, the U.S. Supreme Court held that the 40% penalty for a gross valuation misstatement applied when the partnerships at issue had been determined to be shams that lacked economic substance, and, as a result, the partners’ outside basis in the partnerships was zero (Woods, No. 12-562 (U.S. 12/3/13),
FASB to seek feedback on accounting for income taxes
FASB plans to ask financial statement users, preparers, auditors, and others for feedback on how to best address concerns about its standard on accounting for income taxes. The board also plans to ask stakeholders whether addressing those concerns should be a priority in comparison to other projects that could be
IRS oversight of CPAs who provide valuation services
Under Sec. 6695A, enacted by the Pension Protection Act of 2006, P.L. 109-280, appraisers may face monetary penalties for appraisals that lead to substantial and gross valuation misstatements on returns. This section is intended to provide greater assurance that all appraisers and appraisals meet a minimum threshold of qualification. These
FICA and FUTA caps refer to common law employment relationships
The Court of Appeals for the Federal Circuit upheld a lower court decision that the wage caps for the Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) must be calculated by reference to common law employment relationships rather than statutory employment relationships. Thus, a payroll service company
Long-awaited repair regulations are issued
The IRS issued long-awaited final regulations (T.D. 9636) regarding the treatment of expenditures incurred in acquiring, producing, or improving tangible assets, including rules on determining whether costs related to tangible property are deductible repairs or capital improvements. The IRS noted that it had received many comments on the regulations, most
IRS bound to honor designation of voluntary payment by one taxpayer of another’s liability
In a reviewed opinion, the Tax Court held that the IRS must follow a corporation’s designation of voluntary payments toward the income tax liabilities of its owners/employees. However, because the payments did not represent taxes withheld at the source, the IRS was allowed to levy on the assets of the
Health coverage information-reporting guidance issued
The IRS issued two related proposed regulation projects on health care coverage reporting requirements under the Patient Protection and Affordable Care Act, P.L. 111-148. One set of proposed regulations gives guidance to providers of minimum essential health coverage that are subject to the information-reporting requirements of Sec. 6055 (REG-132455-11). The
IRS issues employment tax refund procedures for same-sex spouses
In Notice 2013-61, the IRS announced the procedures employers should follow for filing refund claims for overpaid Federal Insurance Contributions Act (FICA) and income taxes paid on employer-provided benefits for same-sex spouses that, because of the Supreme Court’s Windsor decision, are now tax free. The notice provides two streamlined administrative
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