The IRS updated its online frequently asked questions page about its proposal to require return preparers to register with the IRS and for unenrolled preparers to pass a test and take annual continuing professional education (CPE) courses. (For prior JofA coverage, see “IRS Proposes New Requirements for Return Preparers” (1/5/10).)
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Tax
Adoption Credit Increased, Made Refundable by Health Care Act
The Patient Protection and Affordable Care Act (PL 111-148) temporarily increased the adoption expense credit and fringe benefit exclusion limit for adoption assistance programs and made the credit refundable. The changes are effective for tax years beginning after Dec. 31, 2009. The act increased the statutory maximum credit and exclusion
Tax Provisions in the Health Reconciliation Act
Late Thursday, Congress passed the Health Care and Education Reconciliation Act of 2010 (HR 4872). The bill now goes to the president for his signature. The Reconciliation Act amends various provisions of the Patient Protection and Affordable Care Act (PL 111-148), the large health care reform act that was enacted
IRS Issues Prop Regs on Use of PTINs After 2010
The IRS issued proposed regulations (REG-134235-08) on Wednesday that would require paid return preparers to use a preparer tax identification number (PTIN) on all tax returns after Dec. 31, 2010. The proposed regulations are the first guidance issued by the IRS under its proposed plan to require registration of all
Refunds Up, Returns Down in 2010
The IRS reports that the size of the average refund is almost 10% bigger this tax season compared with last year. The average refund, through March 12, is $3,036, up from $2,770 at the same time last year. The IRS says this increase is due to various new credits and
Tax Provisions in the Health Care Act
The Patient Protection and Affordable Care Act (H.R. 3590), passed by Congress on Sunday, contains numerous tax provisions. The Reconciliation Act of 2010 (H.R. 4872), which also passed the House on Sunday, contains many other tax items, including extending the general exclusion for reimbursements for medical care expenses under an
Ninth Circuit Says Exempt Organization Late-Filing Penalty Amount Is Mandatory
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
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
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
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.
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
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
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
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