This Tax Briefing provides a review of the key tax law developments of 2010 and their impact on taxpayers -- Only 15 pages - good overview.
http://tax.cchgroup.com/downloads/files/pdfs/legislation/tax-yearend.pdf
Mary Lew Kehm, CPA
Wednesday, December 29, 2010
CCH Releases 2010 Tax Year in Review Tax Briefing
Friday, December 24, 2010
FYI: New Jersey no longer mailing 1099-G forms
Per the most recent NJ State Tax Update, New Jersey is joining New York in
not mailing 1099-G forms:
not mailing 1099-G forms:
"The State of New Jersey is no longer mailing Form 1099-G, Certain
Government Payments, to report the amount of a State tax refund a taxpayer
received. State income tax refunds may be taxable income for Federal
purposes for individuals who itemized their deductions on their Federal tax
return in the previous year. Taxpayers who need this information to complete
their Federal return will be able to view or print their 1099-G information
from the Division's Web site."
Also, Form NJ-2450 has been revised for Family Leave Insurance - Excess
family leave insurance contributions can be claimed as a credit on Form
NJ-1040. The maximum contribution for 2010 was 35.64. Taxpayers who had more
than the maximum amount withheld by two or more employers must enclose a
completed Form NJ-2450 with their return to claim the credit, unlike last
year, when many people lost the excess.
The Winter issue of the NJ State Tax Update is available at
http://www.state.nj.us/treasury/taxation/pdf/pubs/stn/winter10.pdf
Mary Lew Kehm, CPA
Whitehall, PA 18052
Tuesday, October 26, 2010
IRS Commissioner Shulman Speech clarifies some Preparer Registration items; Announces New Preparer Office
On October 26, Commissioner Shulman gave a speech in front of the AICPA Tax Division.
He stated that "We are also still refining our rules for people who work in a professional firm, like an accounting firm, who prepare all, or substantially all of a return under the supervision of an accountant, enrolled agent or lawyer. While this is a tricky area, and I can't give you definitive guidance until we publish our final guidance later this year, I will tell you that I am sympathetic to the argument that the rules should be flexible for people who have met a higher professional standard. Therefore, it is highly likely that as we implement the new rules and procedures there will be some relief for testing and continuing education requirements for people who do not sign a return and work in a professional firm under the supervision of an accountant, enrolled agent or lawyer."
He also said IRS is still working on a start date for testing, and an effective date for the 15 hours of continuing education. DURING THE FIRST YEAR OF IMPLEMENTATION, IRS INTEDS TO WAIVE THE REQUIREMENT FOR CONTINUING EDUCATION.
IRS is also creating a Return Preparer Office (separate from OPR) inside of the IRS that will be led by David R. Williams, who is spearheading the return preparer initiative. He will report directly to Steve Miller, Deputy Commissioner for Services and Enforcement.
According to Commissioner Shulman, the new office will have broad responsibility for the return preparer initiative. It will manage all activities related to continuing education and testing of all professionals under IRS jurisdiction. t will also manage the registration system and process, as well as coordinate resource planning for IRS efforts across the organization related to return preparers.
It is the Commissioner's intention to provide Karen Hawkins and her OPR team increased resources to investigate additional cases of improper conduct, ethical violations and other disciplinary issues involving tax professionals falling under Treasury Circular 230. "I think it's fair to say that we could see an appreciable jump in the OPR case load in the foreseeable future as we work to ensure that all return preparers are serving the American people well."
Consider yourself warned.
The full text of the speech is IR 2010-107 available at the link below.
Mary Lew Kehm, CPA
http://www.irs.gov/newsroom/article/0,,id=229675,00.html
He stated that "We are also still refining our rules for people who work in a professional firm, like an accounting firm, who prepare all, or substantially all of a return under the supervision of an accountant, enrolled agent or lawyer. While this is a tricky area, and I can't give you definitive guidance until we publish our final guidance later this year, I will tell you that I am sympathetic to the argument that the rules should be flexible for people who have met a higher professional standard. Therefore, it is highly likely that as we implement the new rules and procedures there will be some relief for testing and continuing education requirements for people who do not sign a return and work in a professional firm under the supervision of an accountant, enrolled agent or lawyer."
He also said IRS is still working on a start date for testing, and an effective date for the 15 hours of continuing education. DURING THE FIRST YEAR OF IMPLEMENTATION, IRS INTEDS TO WAIVE THE REQUIREMENT FOR CONTINUING EDUCATION.
IRS is also creating a Return Preparer Office (separate from OPR) inside of the IRS that will be led by David R. Williams, who is spearheading the return preparer initiative. He will report directly to Steve Miller, Deputy Commissioner for Services and Enforcement.
According to Commissioner Shulman, the new office will have broad responsibility for the return preparer initiative. It will manage all activities related to continuing education and testing of all professionals under IRS jurisdiction. t will also manage the registration system and process, as well as coordinate resource planning for IRS efforts across the organization related to return preparers.
It is the Commissioner's intention to provide Karen Hawkins and her OPR team increased resources to investigate additional cases of improper conduct, ethical violations and other disciplinary issues involving tax professionals falling under Treasury Circular 230. "I think it's fair to say that we could see an appreciable jump in the OPR case load in the foreseeable future as we work to ensure that all return preparers are serving the American people well."
Consider yourself warned.
The full text of the speech is IR 2010-107 available at the link below.
Mary Lew Kehm, CPA
http://www.irs.gov/newsroom/article/0,,id=229675,00.html
Thursday, October 7, 2010
EFTPS Scam Rears its Ugly Head Again
Yet another wave of the EFTPS Phishing Scam targeting Electronic Federal Tax Payment System (EFTPS) users is going around. The scheme uses an e-mail claiming that a tax payment was rejected and directs the user to a website for more information. The website contains malware that will attempt to infect the user's computer. DO NOT reply to the sender, access links on the site or submit any information to them. IRS does NOT send emails regarding your individual or business account.
I personally received more than 5 of these emails today. If you need to check the status of your payments, log on DIRECTLY to your EFTPS account and click on the left hand side "Check Payment History". You can verify status of all payments there.
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.
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.
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..."
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
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
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.
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.
Mary Lew Kehm, CPA
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.
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.
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.
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.
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
Thursday, August 26, 2010
Spaniard Accidently Accumulated $172 Million Tax Bill
| A young former day-trader from Barcelona has inadvertently accumulated $172 million in back taxes after neglecting to report his activities to the IRS, the existence of which the man had been unaware of until recently, according to the New York Daily News. Moving to New York City in 2006 to try his hand at the market, he moved back home one year later after taking significant losses. However, by not reporting his losses or expenses to the IRS, the government simply assumed that all his trading activity resulted in nothing but pure profit and so taxed him on $500 million worth of income that he never actually had. When informed by his friends of what was going on, the man allegedly asked “who’s the IRS?” |
Wednesday, August 25, 2010
100-plus tax breaks on the line
Washington fiddles as usual... meantime, tax planning is nearly impossible -- or extremely costly, since there are so many scenarios to consider..No matter what your tax bracket, this becomes very expensive for all taxpayers since IRS forms need to be changed, etc.
100-plus tax breaks on the line
100-plus tax breaks on the line
Sunday, August 22, 2010
Second Phase of PA Cash for Furnaces Program
You may remember that in the spring there was a "cash for appliances" program that each state could run with stimulus money.
Pennsylvania chose to only give rebates to furnaces and water heaters - NOT through the tax return; rather, purchasers have to apply directly to the state.
Apparently the money hasn't been moving too quickly, because the rebate amounts have been increased - doubled or more, effective for purchases on or after 8/2/10 (apparently they still have more than three-fourths of the money to give out).
More information is at http://www.paheatingrebates.com/
TTFN
IRS Announces New Return Preparer Application System and User Fee; IRS Also Releases Proposed Regulations to Amend Circular 230 Rules
My first post! Those who know me know I have been very interested in the new tax preparer rules and regulations IRS has been creating, which will be effective for tax returns prepared for the 2011 tax season.
IRS issued a release dated 8/19/10 regarding the systems and Circular 230 changes. They also say PTIN application process will be suspended August 22 in preparation for September rollout of the online PTIN application.
http://www.irs.gov/newsroom/article/0,,id=226697,00.html
Also, some more FAQ's on PTINs were updated 8/18:
http://bit.ly/ciHosl
More to come.
IRS issued a release dated 8/19/10 regarding the systems and Circular 230 changes. They also say PTIN application process will be suspended August 22 in preparation for September rollout of the online PTIN application.
http://www.irs.gov/newsroom/article/0,,id=226697,00.html
Also, some more FAQ's on PTINs were updated 8/18:
http://bit.ly/ciHosl
More to come.
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