The IRS on Tuesday issued further relief for nonqualified deferred compensation (NQDC) plans covered by IRC § 409A (Notice 2010-80). The notice expands the types of plans eligible for relief under Notice 2010-6, which was issued in January. It also provides an additional method of correction and transition relief under
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Notice Gives Guidance on In-Plan Roth Rollovers
On Friday, the IRS issued guidance on how plan participants can make rollovers from a 401(k) or 403(b) plan to a designated Roth account in the same plan (Notice 2010-84). Such in-plan Roth rollovers are now permitted under IRC § 402A(c)(4), as amended by the Small Business Jobs Act of
SBA Supports Bill to Repeal “Burdensome” 1099 Filing Requirements
The head of the U.S. Small Business Administration called for the repeal of a vast expansion of 1099 filing requirements scheduled to begin in 2012. In an open letter to small business owners, SBA Administrator Karen Mills repeated President Barack Obama’s Nov, 3 statements that the expanded requirement for small
AICPA Comments on SEC Proposed Rule for Family Offices
The definition of a family office’s “family clients” must be inclusive enough to encompass all of the clients and arrangements that are typically present in a single-family office, the AICPA said. The suggestion was among comments submitted by the Institute on Tuesday on a proposed SEC rule defining family offices, part of
AICPA Urges Repeal of Expanded 1099 Reporting Requirements
In letters to members of the House of Representatives and the Senate, the AICPA on Nov. 16 expressed its concerns about the compliance burdens being placed on businesses (including rental property owners) by recently expanded Form 1099 information-reporting requirements. The letters, signed by Patricia Thompson, CPA, chair of the AICPA’s
New Rules Require Rental Property Owners to Issue 1099s
The recently enacted Small Business Jobs Act contained one provision that may have escaped the notice of taxpayers who own rental property, but will affect them starting in January. Under the provision, owners of property who receive rental income will be required to issue Forms 1099 to service providers for
Featured Online Content for November 2010
FEATURED VIDEO Performance-Based Compensation Accounting firms are increasingly using pay-for-performance to compensate their high performers. Compensation experts August Aquila and Coral Rice discuss key aspects of a pay-for-performance system, how it can benefit your firm and mistakes to avoid when implementing it. Also on journalofaccountancy.com, read ideas from the
Expanded Form 1099 Reporting “A Nightmare”
The article “The Coming 1099 Revolution: Are You and Your Clients Ready?” (Aug. 2010, page 40) provided much useful information on the tremendous increase in burdensome paperwork that will be imposed on American businesses by section 9006 of the Patient Protection and Affordable Care Act. As the largest coin and
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FOREIGN TAX CREDIT RESTRICTIONS ENACTED New restrictions on the use of foreign tax credits (FTCs), along with other revenue-raising international tax provisions, were enacted Aug. 10, 2010, as part of the so-called Education Jobs Act (PL 111-226). The legislation adds IRC § 909, which provides generally that in the case
Deferring COD Income: Burden May Outweigh Benefit
The election provided in the American Recovery and Reinvestment Act of 2009 (ARRA) to defer until 2014 and spread over five years cancellation of debt income (CODI) has been touted as an attractive relief option for taxpayers struggling with cash flow problems. However, partnerships and S corporations and their owners
Health Care Reform Mandates Immediate Changes
The sweeping changes made by the health care reform legislation (the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010) will become effective over the course of several years. However, some employer-related changes are effective as early as the first plan year that
IRS Amends Plan for Uncertain Tax Positions
The IRS unveiled a number of significant changes to its plan to require certain business taxpayers to report uncertain tax positions on their tax returns (see Announcement 2010-75 and Announcement 2010-76). The changes, released in September, come in response to numerous comments received on the proposal and on the draft
Navigating Nexus
Nexus can be a hidden danger for a company with a multistate presence. Certain activities might cause nexus for sales and use tax, income tax, franchise tax or other business taxes. One key to successfully navigating these widely varying provisions is for tax professionals to review the statutes and rulings
Preparer Registration Draws Concerns
The IRS moved ahead with its program to register tax return preparers, as aspects of the plan drew concerns and recommendations from a wide range of practitioners and policymakers, including the AICPA. In late September, the IRS issued final regulations (TD 9501 and TD 9503) on preparer tax identification numbers
Stock “Loans” Ruled Sales
In three cases this summer, the Tax Court ruled against purported stock loans that it said were sales. One case involved millions of dollars in built-in gain and IRS-asserted deficiencies totaling $30 million for Denver multibillionaire Philip Anschutz. Two other cases involved participants in the Derivium “90% stock loan” abusive
Whose Goodwill Is It?
The U.S. District Court for the Eastern District of Washington recently held that goodwill created while a dentist was employed by his solely owned corporation belonged to the corporation and not to him. As a result, the dentist was required to characterize as a corporate dividend rather than a long-term
IRS Releases Some Annual Inflation Adjustments, Many Unchanged for 2011
The IRS released on Thursday its annual revenue procedure making inflation adjustments for various credits and other tax items (Revenue Procedure 2010-40). However, unlike in past years, the guidance does not include updated tax rate tables or updated amounts for the child tax credit, Hope scholarship and lifetime learning credits,
IRS Commissioner Predicts Relief From Testing and Continuing Education for CPA-Supervised Nonsigning Preparers
The IRS will likely provide relief from testing and continuing education requirements for nonsigning tax preparers working under the supervision of a CPA or other federally authorized tax practitioner, such as an attorney or enrolled agent, in a CPA or other professional firm, IRS Commissioner Doug Shulman said Tuesday. In
IRS Provides PTIN Guidance for Preparers Without a Social Security Number
In Revenue Procedure 2010-41, released on Tuesday, the IRS has provided a process for individuals without a Social Security number to obtain a preparer tax identification number (PTIN). Paid tax return preparers are required to register with the IRS and obtain a PTIN, and part of the PTIN registration process
Regulations Provide Guidance on Hybrid Pension Plans
On Monday, the IRS released final and proposed regulations providing guidance on so-called hybrid defined benefit pension plans (TD 9505 and REG-132554-08). The regulations deal with changes made by the Pension Protection Act of 2006 and the Worker, Retiree, and Employer Recovery Act of 2008. They generally apply to plan
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