Thursday, September 23, 2010

Paid preparer Paper Application Up on IRS Website -- Form W-12

Apparently there IS a paper application for PTIN - the IRS said previously
there would not be a paper form, but they must have changed their minds.
Form W-12 will replace Form W-7P. The new form is at

http://www.irs.gov/pub/irs-pdf/fw12.pdf

The instructions say it will take 4-6 weeks if filed by mail.

I would still recommend waiting for the web-based system to open - the IRS
has said it will be up by the end of next week, so we won't have to wait
much longer. There is a site up already for the PTIN but it hasn't gone
live. The form might still be of interest to see what questions they will be
asking.



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Wednesday, September 22, 2010

LeverageSALT: Pennsylvania Keystone Opportunity Zones Set To Exp...

LeverageSALT: Pennsylvania Keystone Opportunity Zones Set To Exp...: "If your business is currently taking advantage of a Pennsylvania Keystone tax credit, you may be interested in reading a recent bulletin iss..."
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Thursday, September 16, 2010

IRS Estimates Late September for PTIN Registration Start Date

>From IRS FAQ's (updated 09/16/10)

Implementation Timeline

1. What is the best estimate for when the new regulations will be
implemented? (revised 9/16/10)

Late-September, 2010, is the current target date for an on-line registration
system and all preparers will need to be registered on the new system and
have a Preparer Tax Identification Number (PTIN) prior to filing any return
after Dec. 31, 2010. Final determination of these dates is dependent on many
factors and will be widely publicized as soon as available.

Testing will not be implemented until after registration and mandatory PTIN
usage are in place.

Complete FAQ's on Proposed New Requirements for Tax Return Preparers
available at http://bit.ly/ciHosl


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Tuesday, September 7, 2010

IRS Releases Draft Form for Health Insurance Tax Credit/Guidance on How Tax-Exempts Will Claim

On Tuesday morning, IRS released a draft version of the form that small
businesses and tax-exempt organizations will use to calculate the small
business health care tax credit when they file income tax returns next year.
The IRS also announced how eligible tax-exempt organizations -- which do not
generally file income tax returns -- will claim the credit during the 2011
filing season.

The draft of the form is at the link below. Both small businesses and
tax-exempt organizations will use the form to calculate the credit. A small
business will then include the amount of the credit as part of the general
business credit on its income tax return.

Tax-exempt organizations will instead claim the small business health care
tax credit on a revised Form 990-T. The Form 990-T is currently used by
tax-exempt organizations to report and pay the tax on unrelated business
income. Form 990-T will be revised for the 2011 filing season to enable
eligible tax-exempt organizations -- even those that owe no tax on unrelated
business income -- also to claim the small business health care tax credit.

http://bit.ly/8X0CSp

Mary Lew Kehm, CPA
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Monday, September 6, 2010

Lehigh County PA Chooses Berkheimer as EIT Collector

The incredibly long saga of earned income tax (EIT -- a local tax collected by school districts and municipalities) collection reform in Pennsylvania is about to take a major step forward. Under Act 32, almost all counties in the state of Pennsylvania must appoint a common EIT collector by September 15, 2010. Currently, the tax is collected by either municipalities or school districts themselves, although some have appointed outside collectors.

These tax collectors would be effective for 2012, although 2011 is allowed.

The Lehigh Valley is one of the worst areas in the state of PA for the balkanization of our tax collection. There are 63 municipalities in Lehigh and Northampton counties alone, plus more than a dozen school districts. This results in incredibly inefficient tax collection practices. I am sure much revenue is lost even from people who want to comply with the tax, let alone people who want to cheat. There are so many steps in the process that must go exactly right that mistakes are very common.

The surprising news is that the outside tax collectors who have been slowly consolidating power in each county may not be the ones getting the contracts. The most populous municipalities of Lehigh County, for example, have contracted with Keystone Collections (Allentown City, Lower Macungie Township, and Whitehall Township). All three used to collect their own taxes, but came to the conclusion (correct, I think) that having their own employees collect the taxes was incredibly expensive and inefficient. (I understand Allentown City used to have 17(!) people handle this task.)

However, when it came down to appointing the county-wide tax collector for 2012, Lehigh County went with Berkheimer Associates, another large tax collection bureau. That's OK with me; Berkheimer has been making an effort to allow electronic filing which is helpful.

Bucks County, however, where 35 of 48 municipalities and school districts are now using Berkheimer, decided to go with Keystone Collections.

And Northampton County, where Berkheimer has offices, is apparently seriously considering Keystone Collections as well, even though they are from the opposite end of the state in Irwin near Pittsburgh. They are supposed to make their choice on 9/9/10.

I am getting really curious how this will all work out. Although I was in favor of statewide collection, the county-wide collection is the largest leap forward since the tax was adopted back in 1965. I am hopeful that with all of this lead time that a smooth transition will take place. As a CPA who assists clients with payroll and payroll taxes, anything to lessen the chance for error is appreciated. And as a taxpayer, I want every dollar that is due to be collected -- no more, no less -- for the least cost.

Stay tuned.
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Thursday, September 2, 2010

State Tax Amnesty Program Update

Brian Strahle of the LeverageSALT (State and Local Taxes) blog has the following update on state tax amnesties:

The following are state tax amnesty programs that are currently in effect or will start soon:


Nevada (July 1 to September 30, 2010)
Florida (July 1 to September 30, 2010)
New Mexico (June 7 to September 30, 2010)
District of Columbia (August 2 to September 30, 2010)
Kansas (starts September 1 to October 15, 2010)
Illinois (starts October 1 to November 8, 2010
LeverageSALT: State Tax Amnesty Program Update

These can be very useful programs if you are not current with your obligations. The recently ended program in Pennsylvania save some of my clients thousands of dollars and they are back in compliance.

Contact your CPA or tax preparer ASAP if you think you could qualify -- the amnesty process is NOT quick or easy if the PA program is any indication.
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Wednesday, September 1, 2010

"Non-Combat" Troops Remaining in Iraq Will Still Receive "Combat Zone" Tax Treatment

The Tax Foundation quotes an email from a Defense Department source. "Non-Combat" Troops Remaining in Iraq Will Still Receive "Combat Zone" Tax Treatment
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