etrent17/irs-articles huggingface dataset:
IR-2008-142, Dec. 17, 2008
WASHINGTON — The IRS has placed its comprehensive tax guide for individuals on  IRS.gov, updating it for tax year 2008. The updated on-line version of IRS Publication 17, “Your Federal Income Tax,” contains more than 900 interactive links.
Publication 17 has been updated with important changes for 2008, including information on the new recovery rebate credit, new first-time-homebuyer credit, and an additional standard deduction for real estate taxes.  It has been published annually by the IRS for more than 65 years and has been available on the IRS Web site since 1996.
As in prior years, the publication provides information on how to file an individual tax return, what to include as income, how to calculate capital gains and losses, how IRAs and other expenses can affect how much income to report, whether to take the standard deduction or itemize, and how to figure taxes and credits. 
Publication 17PDF is available on line, however, those who do not have access to the Internet can call 1-800-829-3676 to request a free copy from the IRS. Printed copies will be available in January 2009.
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IR-2008-140, Dec. 11, 2008
WASHINGTON — The IRS issued a notice today announcing relief for certain retirement plans that do not have a written plan in place by January 1, 2009. The new guidance is for retirement plans covering employees at public schools, colleges and universities, and other tax exempt organizations. These retirement plans are often referred to as 403(b) plans after the relevant section in the tax code.
The IRS is extending the deadline for plan sponsors to adopt new written plans or amend existing plans to satisfy the requirement of the final 403(b) regulations because of difficulties expressed by numerous plan administrators in meeting the current deadline of January 1, 2009.  This extension will give plan sponsors additional time to put their plan documents in place.
The IRS will treat these plans as meeting the requirements of 403(b) and the regulations during the 2009 calendar year if:

By December 31, 2009, the plan sponsor of the plan has adopted a written 403(b) plan that is intended to satisfy the requirements of 403(b) and the regulations.


During 2009, the plan sponsor operates the plan in accordance with a reasonable interpretation of 403(b) and the related regulations.


By the end of 2009, the plan sponsor makes its best effort to retroactively correct any operational failure during the 2009 calendar year to conform to the written plan.

The IRS plans to issue further guidance on 403(b) plans, including a revenue procedure establishing programs for 403(b) plans to obtain IRS approval of the plan document and allowing these plans to make remedial amendments to retroactively fix plan provisions under rules that similar to those that apply for 401(a) qualified plans. 
Notice 2009-3PDF is available on IRS.gov.
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IR-2008-139, Dec. 10, 2008           
WASHINGTON – The Internal Revenue Service today announced in Revenue Ruling 2008-54 that interest rates for the calendar quarter beginning Jan. 1, 2009 will drop by one percentage point. The new rates will be: 
Five (5) percent for overpayments [four (4) percent in the case of a corporation];
Five (5) percent for underpayments;
Seven (7) percent for large corporate underpayments; and
Two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points.  The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.  The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate during October 2008 to take effect Nov. 1, 2008, based on daily compounding.
Revenue Ruling 2008-54PDF, announcing the new rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2008-52, dated Dec. 29, 2008.
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IR-2008-136, Dec. 5, 2008
WASHINGTON — The Internal Revenue Service announced the appointment of Curtis G. Wilson to the position of Associate Chief Counsel (Passthroughs and Special Industries).
"Curt Wilson will bring a wealth of leadership skills to the job,” said IRS Chief Counsel Don Korb. “Mr. Wilson has been with the Office of Chief Counsel for 25 years and is a testament to the office’s ability to grow executives from within."
The Associate Chief Counsel (PSI) provides legal advice on a wide variety of issues, including partnerships, S corporations, trusts, estate and gift taxation, energy taxation, excise taxes, low income housing, domestic production deductions, the research credit and tax shelters.
Wilson succeeds William O’Shea, who recently retired.
Wilson graduated with a B.A. from Augustana College in 1974, received his J.D. from the University of South Dakota School of Law in 1977 and an L.L.M. in Taxation from Georgetown University in 1988. 
Before joining the IRS Office of Chief Counsel in 1983, Wilson worked in private practice and with the South Dakota attorney general’s office. In 1996 he was promoted to Deputy Assistant Chief Counsel of Field Service and thereafter served a variety of executive positions in the Office of Chief Counsel. Most recently, Wilson was the Deputy Associate Chief Counsel (PSI).
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IR-2008-135, Dec. 1, 2008
WASHINGTON – The Internal Revenue Service today announced a two-year test of two programs: the post-Appeals mediation and arbitration procedures for Offer in Compromise (OIC) and Trust Fund Recovery Penalty (TFRP).
Beginning Dec. 1, 2008. for a  two-year test period, Appeals will offer post-Appeals mediation and arbitration for OIC and TFRP cases for taxpayers whose appeals are considered at the Appeals office in Atlanta, Ga.; Chicago, Ill.; Cincinnati, Ohio; Houston, Texas; Indianapolis, Ind.; Louisville, Ky.; Phoenix, Ariz.; and San Francisco, Calif.
Under these two alternative dispute resolution programs, the taxpayer or Appeals may request nonbinding mediation. The taxpayer may decline Appeals’ request for mediation. Appeals will evaluate a taxpayer’s request for mediation based on the criteria detailed in Revenue Procedure 2002-44 and Announcement 2008-111.  A request for binding arbitration must be made jointly by the taxpayer and Appeals. The mediation and arbitration procedures do not create any additional authority for settlement by Appeals.
During the test period, Appeals employees will advise the taxpayer of the availability of these alternative dispute strategies and the deadline for timely requesting such strategies when a rejection of an OIC is sustained or a proposed TFRP assessment is sustained.  An OIC submitted during Collection Due Process (CDP) as an alternative to a Collection action is not eligible for these alternative dispute resolution strategies during the test period.

The Post-Appeals mediation process is available for both legal and factual issues. The mediator’s role is to facilitate settlement negotiations so the parties can reach their own agreement.  The mediator does not have settlement authority over any issue.
The Arbitration procedure is available for factual issues only. The arbitrator’s role is to hear both sides of a disputed issue and then render a decision on the specific factual issue being arbitrated.  This decision is binding on both parties.  However, the arbitrator does not have the authority to decide that the offer in compromise itself must be accepted or that a person is/is not liable for the TFRP under § 6672.  Neither party may appeal the decision of the arbitrator or contest the decision in any judicial proceeding.
Complete procedures for initiating a request for post-Appeals mediation or arbitration are in Announcement 2008-111PDF. The agency will seek appropriate Offer in Compromise and Trust Fund Recovery Penalty cases for both post-Appeals mediation and arbitration during the two-year test period in order to evaluate the effectiveness of alternative dispute resolution for these cases.
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IR-2007-22, Jan. 31, 2007
 
WASHINGTON — The Internal Revenue Service announced that purchasers of qualified Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit. Also, four qualifying 2008 Ford hybrid vehicles were announced.
The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Ford sold 5,645 qualifying vehicles to retail dealers during the quarter ending Dec. 31, 2006. This brings the total number of Ford qualifying hybrids reported to date to 22,156.
Purchasers of Ford’s qualified vehicles may continue to rely on the previously issued IRS certifications concerning the vehicles’ qualification for the credit. However, those seeking the credit should remember that the full credit may be available only for a limited time.
The credit amount and make and model of previously certified vehicles sold are:
Ford Escape 2WD, Model Years 2005, 2006 and 2007 — $2,600
Ford Escape 4WD, Model Years 2005, 2006 and 2007 — $1,950
Mercury Mariner 4WD, Model Years 2006 and 2007 — $1,950
IRS also certified additional 2008 Ford vehicles for the following credit amounts:      
Ford Escape 2WD Hybrid Model Year 2008 — $3,000
Mercury Mariner 2WD Hybrid Model Year 2008 — $3,000
Ford Escape 4WD Hybrid Model Year 2008 — $2,200
Mercury Mariner 4WD Hybrid Model year 2008 — $2,200
Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
See related item: Hybrid Cars and Alternative Motor Vehicles
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IR-2007-19, Jan. 29, 2007
 
WASHINGTON — The Internal Revenue Service is providing a new online tool to help individual taxpayers determine whether they might benefit by electing to deduct their state and local general sales taxes.
“The Sales Tax Calculator is another interactive tool on the IRS.gov web site designed to help make it easier for taxpayers to figure their taxes,” said IRS Commissioner Mark W. Everson.
Taxpayers who itemize deductions on Schedule A of the Form 1040 in 2006 have the option of deducting the amount of state and local sales taxes paid instead of deducting their state and local income taxes paid. Taxpayers cannot take a deduction for both sales and income taxes.
New tax law enacted in late December reinstated the optional deduction for state and local sales taxes. Because of this late enactment date, the IRS previously announced that it would not begin processing returns claiming the sales tax deduction until Feb. 3.
To use the Sales Tax Calculator, taxpayers input their adjusted gross income, number of exemptions and zip code. The IRS estimates most taxpayers will get an answer in less than five minutes using the new tool.
The calculator is anonymous. Taxpayers do not need to enter their name, Social Security number or any other identifying information. The calculator is another in a series of steps the IRS is taking to reduce taxpayer burden.
As an alternate to the online sales tax calculator, taxpayers can use the worksheet in Publication 600, State and Local General Sales Tax, posted on IRS.gov and mailed in early January to about six million individuals who received the Form 1040 tax package.
To calculate what their sales tax deduction would be, taxpayers can use either the actual amounts paid or use sales tax tables that allow them to factor in the exact sales taxes paid on certain specified items, such as a car, boat or material to build a house.
To find this tool, enter Sales Tax Calculator into the search box on this Web site. 
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See related item: Sales Tax Calculator
IR-2007-18, Jan. 26, 2007
WASHINGTON — The Internal Revenue Service announced that it has updated its online tool to help taxpayers determine whether they may owe the Alternative Minimum Tax (AMT). Most taxpayers can enter their data and get an answer in five to 10 minutes using this Internet-based calculator, available at on this Web site.
“Nobody likes the AMT. But this tool helps people learn quickly whether they’re going to be paying this tax,” said IRS Commissioner Mark W. Everson. “We also remind taxpayers that AMT calculations are automatic when you use e-file rather than filing a paper return.”
The online AMT Assistant is an automated version of the Worksheet to see if you should fill in Form 6251, Alternative Minimum Tax. The worksheet, contained in the Form 1040 Instruction Booklet, helps determine whether a taxpayer may be subject to AMT. The IRS projects that most taxpayers using the online AMT Assistant will find that the AMT does not apply to them.
The AMT Assistant is aimed at individual taxpayers and can be used by individuals, tax practitioners and community or public service organizations. All entries are anonymous. Taxpayers filing paper returns benefit the most from the AMT Assistant since electronic filing software generally computes AMT liability automatically.
By entering “AMT Assistant” in the IRS.gov search box, taxpayers can easily find the tool. To use the AMT Assistant, taxpayers must complete a draft Form 1040 through line 44 and have that information at hand to use the AMT Assistant, which is one of several online tools available on IRS.gov.
Related Item: AMT Assistant
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IR-2007-17, Jan. 26, 2007
WASHINGTON — Payroll professionals and business owners who file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, for 2006, due by Jan. 31, will notice several improvements in the form and instructions. The IRS has redesigned Form 940 to be more user-friendly, reducing the burden for more than one million filers.
In May 2004, a team led by the IRS office of Taxpayer Burden Reduction began the process of redesigning Form 940. IRS employment tax experts worked with representatives from other federal and state agencies, gathering input from internal and external stakeholders to create a plain language form that is logical, easy to follow, and compatible with optical scanning.
The new Form 940 incorporates the advantages of Form 940-EZ (discontinued for tax year 2006) into a simplified form for all filers. Improvements include:

A logical sequence from the taxpayer’s point of view
	 


Eight separate parts with visual cues, breaking up the task into smaller steps
	 


A new Schedule A for multi-state employers or credit reduction situations
	 


Check boxes instead of “A, B, C” questions

The IRS is committed to reducing unnecessary taxpayer burden and welcomes input from tax and payroll professionals, business owners and the general public on opportunities to make it easier to comply with the tax laws. More information can be found in Form 13285A, Reducing Tax Burden on America's Taxpayers, and at the link below for the Office of Taxpayer Burden Reduction.
Related Items:

Form 940PDF


Form 940 InstructionsPDF


Form 940, Schedule APDF


Office of Taxpayer Burden Reduction


Form 13285A, Reducing Tax Burden on America's TaxpayersPDF

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IR-2007-15, Jan. 24, 2007
WASHINGTON — Taxpayers across the nation will have until Tuesday, April 17, 2007, to file their 2006 returns and pay any taxes due, the Internal Revenue Service announced today.
Taxpayers will have extra time to file and pay because April 15 falls on a Sunday in 2007, and the following day, Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia.
“This year, taxpayers have additional time to file and pay beyond the traditional April 15 deadline,” said IRS Commissioner Mark W. Everson. “As we always do, we encourage taxpayers to get an early start on their taxes to make sure they have plenty of time to accurately prepare their return.”
This means the entire country has an April 17 deadline. Previously, the April 17 deadline applied just to individuals in the District of Columbia and six eastern states who are served by an IRS processing facility in Massachusetts, where Patriots Day will be observed on April 16.
The April 17, 2007 deadline will apply to any of the following:

2006 federal individual income tax returns, whether filed electronically or on paper.
	 


Requests for an automatic six-month tax-filing extension, whether submitted electronically or on Form 4868.
	 


Tax year 2006 balance due payments, whether made electronically (direct debit or credit card) or by check.
	 


Tax-year 2006 contributions to a Roth or traditional IRA.
	 


Individual estimated tax payments for the first quarter of 2007, whether made electronically or by check.
	 


Individual refund claims for tax year 2003, where the regular three-year statute of limitations is expiring.

Other tax-filing and payment requirements affected by this change are described in IRS Publication 509, Tax Calendars for 2007, available on this Web site.
Most taxpayers will not have to change their plans in response to this announcement. Three out of four individual filers get refunds. Typically, returns claiming refunds are filed early in the tax season.
By law, filing and payment deadlines that fall on a Saturday, Sunday or legal holiday are timely satisfied if met on the next business day. Under a federal statute enacted decades ago, holidays observed in the District of Columbia have impact nationwide on tax issues, not just in D.C. Under recently-enacted city legislation, April 16 is a holiday in the District of Columbia. Officials recently became aware of the intersection of the national filing day and the local observance of the new Emancipation Day holiday after most forms and publications for the current tax filing season went to print.
Even with the extra time, taxpayers can skip the last-minute rush and avoid needless mistakes by filing early, taking advantage of the speed and convenience of electronic filing, choosing direct deposit for any refunds and paying any taxes due by direct debit or credit card. IRS.gov has further details on electronic filing and payment options and links to companies providing these services.
Related Items:

Questions and Answers — April 17 Deadline


Pub. 509PDF

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IR-2007-14, Jan. 24, 2007
WASHINGTON — The Internal Revenue Service is joining national television network Telemundo in a special one-hour tax program for Spanish-speaking taxpayers on Sunday, Jan. 28. The program, “Los Impuestos y Usted” (“Taxes and You”), will air at 3:30 p.m. Eastern and Pacific Time, and at 2:30 p.m. Central and Mountain Time.
“Los Impuestos y Usted” will focus on a variety of tax issues, including the Earned Income Tax Credit (EITC) for low-income taxpayers, electronic filing (IRS e-file), Free File and tips on how to choose a tax preparer. In addition, the program will explain the changes to the tax laws such as split refunds and the federal telephone excise tax. IRS experts also will discuss taxpayers’ rights and how to obtain help with tax questions.
Mónica Noguera, host for many of Telemundo’s special programs, will present the IRS program, which features in-studio interviews with IRS tax experts.
Information about the IRS is available in Spanish online at /espanol or toll-free by telephone at 1-800-829-1040, extension 8.
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IR-2007-13, Jan. 22, 2007
 
WASHINGTON – The Internal Revenue Service has launched a new Internet-based version of its popular Exempt Organizations Workshop covering tax compliance issues confronted by small and mid-sized tax-exempt organizations, including charities and churches.
The target audience for the free online workshop, Stay Exempt – Tax Basics for 501(c)(3)s, is organizations that have no tax experts on staff or have no or limited contact with outside advisors on tax compliance issues.
“The Exempt Organizations division has offered face-to-face workshops for small and mid-sized organizations since 2001,” said Lois G. Lerner, Exempt Organizations director. “These have been remarkably popular and have played an important role in our effort to increase compliance with the law through effective outreach and education.”
“However because of the cost and time involved in producing the live workshops, we can offer only a few each year in major cities. With this new online program, anyone, anywhere can access a ‘virtual workshop’ whenever it’s convenient for them,” Lerner added.
The workshop consists of five interactive modules on tax compliance topics:
Tax-Exempt Status – How can you keep your 501(c)(3) exempt?
Unrelated Business Income – Does your organization generate taxable income?
Employment Issues – How should you treat your workers for tax purposes?
Form 990 – Would you like to file an error-free return?
Required Disclosures – To whom do you have to show your records?
Each module contains learning objectives as well as interactive exercises to keep the sessions lively. Users can complete the modules in any order and repeat them as many times as they like. Users also will find dozens of links to IRS forms and publications that provide details about the topics in the modules. The IRS Web site does not require registration and its visitors will remain anonymous. Comments on ways to improve the workshop are encouraged.
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IR-2007-12, Jan. 18, 2007
WASHINGTON — The Internal Revenue Service has selected eight new members for the Information Reporting Program Advisory Committee (IRPAC). The appointees join 15 returning members who are in the second or third year of their three-year terms.
The eight new members appointed to serve on the committee are:

Richard Hollingsworth, a Manager of Tax Information Returns, H&R Block Financial Advisors, Inc., Detroit, Mich.


Nadine Hughes, Vice President, Agency Services, CompuPay, Inc., Miramar, Fla.


Jon Lakritz, Vice President, National Financial Services, LLC, Jersey City, N.J.


Timothy McCutcheon, President, Fort William, LLC, Milwaukee, Wis.


Maria Murphy, Director, PricewaterhouseCoopers LLP, Washington, D.C.


Suzanne Sullivan, Senior Vice-President and Senior Financial Manager, Bank of America, Providence, R.I.


Ron Whitney, CEO, Barter Network, Inc., Chadds Ford, Pa.


Ralph Zerbonia, Tax Principal, UHY Advisors, Inc., Southfield, Mich.

The committee will hold its orientation meeting on Jan. 24-25, 2007.
The Information Reporting Program Advisory Committee was established in 1991 and focuses on information reporting issues. The committee’s purpose is to provide an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public.
Links:

IRSAC and IRPAC General Information


Tax Information for Tax Professionals

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IR-2007-09, Jan. 12, 2007
Washington — The Internal Revenue Service today announced the completion of the first bilateral advance pricing agreement (“APA”) between the U.S. and the People’s Republic of China.
The agreement involves Wal-Mart Stores, Inc. The parties, including Wal-Mart, worked quickly and constructively to establish a mutual agreement process that will benefit future bilateral APAs between the two countries.
“We’re working closely with China as they develop their tax administration system,” said IRS Commissioner Mark W. Everson. “This is an important event, and I’m pleased we’ve been able to reach this agreement with the Chinese tax authority and Wal-Mart.”
The IRS APA Program provides a way to resolve transfer pricing issues before they arise during an audit.  The program enables the taxpayer and the IRS to work together to resolve potential double taxation disputes under U.S. tax law and relevant income tax treaties.  APAs lessen the burden of compliance by giving taxpayers greater certainty regarding their transfer pricing methods.
The APA process increases the efficiency of tax administration by encouraging taxpayers to come forward and present to the IRS all the facts relevant to a proper transfer pricing analysis and to work towards a mutual agreement in a spirit of openness and cooperation. 
    
In 2006, there were 82 APAs executed, of which 40 were bilateral agreements with other tax treaty countries.
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IR-2007-08, Jan. 11, 2007
WASHINGTON — The Internal Revenue Service has acknowledged the certification by Nissan North America, Inc., that its 2007 Nissan Altima Hybrid vehicle meets the requirements of the Alternative Motor Vehicle Credit as a qualified hybrid motor vehicle.
The credit amount for the hybrid vehicle certification of the 2007 Nissan Altima Hybrid is $2,350.
Consumers seeking the credit may want to buy early since the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
See related item: Hybrid Cars and Alternative Vehicles
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IR-2007-7, Jan. 10, 2007
WASHINGTON — The Treasury Department and the IRS issued a notice today providing extensive guidance on several Pension Protection Act rules relating to distributions from tax-qualified retirement plans.
The guidance addresses many questions on PPA provisions, including:

interest rate assumptions for lump sum distributions
	 


hardship distributions from a 401(k) and similar plans
	 


early distributions from qualified plans to terminated public safety employees
	 


rollovers from qualified plans to IRAs for non-spouse beneficiaries
	 


distributions to pay for health insurance for retired public safety officers
	 


earlier vesting of certain employer contributions
	 


new rules for the notice and consent period for distributions

The notice also clarifies several issues concerning the provision permitting IRA owners age 70 ½ or older to directly transfer tax-free, up to $100,000 per year to an eligible charity. For example, a check from an IRA made payable to an eligible charity but delivered by the IRA holder still qualifies for tax-free treatment. IRAs held on behalf of beneficiaries, as well as IRAs held by the original owners, are eligible to use this provision. Additionally, the $100,000 annual limit applies separately for each spouse of a married couple. If both spouses have IRAs and are at least age 70 ½, the couple can transfer a combined total of $200,000.
Related Item: Notice 2007-7PDF
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IR-2007-06, Jan. 10, 2007
WASHINGTON — The Internal Revenue Service Office of Chief Counsel is reviving its Professor-in-Residence program.
Dormant since the late 1980s, the Professor-in-Residence program provides some of the nation’s top legal academicians the opportunity to contribute to the development of legal tax policy and administration. Reporting directly to IRS Chief Counsel Donald L. Korb, the Professor in Residence provides advice and assistance on a wide array of legal issues within the scope of his or her expertise.
Korb has selected Calvin H. Johnson, the Andrews & Kurth Centennial Professor of Law at the University of Texas Law School, as the 2007 Professor in Residence for the IRS Office of Chief Counsel.
A graduate of Columbia College and Stanford Law School, Johnson is a nationally known scholar on tax law who has taught at the University of Texas Law School for more than 25 years. He has previously served in a number of advisory roles, including adviser to the Joint Committee on Taxation, Guest Scholar at The Brookings Institution, and member of the IRS Commissioner’s Advisory Group.
Johnson has authored numerous articles on tax and tax policy, including recent works on corporate tax shelters, stock options, depreciation and corporate integration.
He will begin his tenure with the IRS Office of Chief Counsel this month.
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IR-2007-05, Jan. 10, 2007
 
WASHINGTON — The Internal Revenue Service announced today another milestone in its outreach campaign to the entertainment industry regarding the taxability of gift bags and promotional items.
The Hollywood Foreign Press Association and the IRS reached a mutually satisfactory agreement that will resolve outstanding tax responsibilities with respect to Golden Globe Awards presenter gift baskets. The Hollywood Foreign Press Association (HFPA) voluntarily approached the IRS last year seeking to clarify the tax issues surrounding the gift baskets, as well as to ensure that any obligations for the prior years were met.
Under the closing agreement, the HFPA and the IRS have settled the tax obligations with respect to gifts given through 2005. Recipients of 2006 gift boxes will be issued appropriate informational tax forms by the HFPA and will be responsible for satisfying their income tax obligations.
Last year, the IRS started an outreach campaign aimed at the entertainment industry. This effort is focused on distribution of celebrity gift bags and goodie bags in conjunction with appearances by the stars at award shows and other gatherings. Such bags can include luxury trips, jewelry and electronics. Dozens of the award shows take place each year.
“The fact this gift bag practice grew so quickly is stranger than fiction,” said IRS Commissioner Mark W. Everson. “We’re happy the Hollywood Foreign Press Association stepped forward to resolve this issue.”
“We are pleased to have reached an agreement with the IRS which resolves all income tax obligations on the part of our presenters,” said Philip Berk, HFPA President.  Last September, the HFPA voted to discontinue the practice of thanking presenters with presenter boxes.
Since August, the IRS has contacted entertainment industry groups and others to focus attention on tax guidelines for gift bags and other promotional items. The effort is concentrated on two main areas:
Reporting compliance by the stars and other recipients receiving the items.
Completion of Form 1099s as appropriate by those providing the items to the stars and other recipients.
This outreach provides an opportunity for taxpayers, businesses and tax professionals to better understand their tax obligations as it relates to these luxury goods and services and the associated tax implications. The outreach effort is also aimed at keeping entertainers, organizations and others in this area in compliance with the tax law.
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IR-2007-02, Jan. 8, 2007
WASHINGTON — Beginning today, partnership taxpayers can electronically file tax year 2006 Form 1065, U.S. Return of Partnership Income, and Form 1065-B, U.S. Return of Income for Electing Large Partnerships, using the Modernized e-File platform.
“Electronic filing is a key component to modernizing our tax system,” IRS Commissioner Mark W. Everson said. “E-File improves the speed and accuracy of tax return filing, and we encourage partnership taxpayers to take advantage of this enhanced system.”
Since tax year 1986, the IRS has offered electronic filing of Form 1065. The existing 1065 e-File platform uses a proprietary data transmission format. However, the Modernized e-File platform uses the Extensible Markup Language (XML) format, which is an industry-standard method of identifying, storing and transmitting data. Both e-File platforms offer improved speed and accuracy of tax return filing. But Modernized e-File offers additional benefits, including transactional processing instead of batch processing, allowance for binary file attachments, elimination of the duplicate filing of International returns and a federal/state partnership program.
The IRS anticipates more than 400,000 partnerships will e-File in 2007. Most of those partnerships are not mandated to e-File but are encouraged to do so for the e-Filing benefits.
For tax year 2006, partnerships have the option to e-File Form 1065 through the Modernized e-File system or the existing 1065 e-File system. However, e-File for Form 1065-B is available solely through Modernized e-File. Partnership taxpayers should talk with their software provider or transmitter to determine which e-File platform to use. Beginning in January 2008, Modernized e-File will be the only e-File platform available to e-File partnership returns. At that time, the IRS will also require e-File for all 1065-B returns.
Partnership taxpayers can access detailed information about the Form 1065 e-File process by clicking on the "Modernized e-File for Partnerships" link below.
Link:

Modernized e-File for Partnerships

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IR-2007-45, Feb. 28, 2007
WASHINGTON — The Internal Revenue Service announced today that farmers and fishermen may ask the IRS to waive any estimated tax penalties if they were affected by the snowstorms that began on February 19, 2007.
The timing and suddenness of the storm, as well as the resulting power outages, may have affected the ability of many farmers and fishermen to file their 2006 calendar year return by March 1, 2007.
 
Generally, farmers and fisherman can avoid an estimated tax penalty if they file their returns and pay the full amount of tax shown on their return by March 1, 2007.  An individual is a farmer or fisherman for these purposes if two-thirds of the individual’s total gross income for the taxable year or the preceding taxable year is from farming or fishing (including oyster farming).
 
If a taxpayer has an underpayment of estimated tax, all or part of the penalty for the underpayment may be waived if the IRS determines that the underpayment was due to a casualty, disaster or other unusual circumstance and it would be inequitable to impose the penalty.
To request a waiver of the estimated tax penalty, affected taxpayers should complete Form 2210-F Underpayment of Estimated Tax by Farmers and Fisherman and file it with their Form 1040 series income tax return. As indicated in the instructions to Form 2210-F, a statement should be attached to the Form explaining the reasons why you are unable to meet the March 1 deadline. At the top of the Form 2210-F, write “Request for Waiver Due to Winter Ice Storms.” 
Taxpayers may download forms and publications from IRS.gov or may order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.
Link: Form 2210-FPDF (Underpayment of Estimated Tax by Farmers and Fishermen)
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IR-2007-44, Feb. 28, 2007
WASHINGTON — The IRS has extended the 2007 deadline until June 30 for restaurant or beverage businesses to elect to participate in the Attributed Tip Income Program.
The extension is in response to requests from restaurant and beverage industry members and is only applicable for the 2007 calendar year.
Normally, eligible establishments must elect to participate in ATIP by Feb. 28 when they timely file their Form 8027, “Employer’s Annual Information Return of Tip Income and Allocated Tips.”
To participate in the program for calendar year 2007, employers should have started to attribute tips under the provisions of Revenue Procedure 2006-30 beginning with the first payroll period on or after Jan. 1, 2007. However, for calendar year 2007 only, employers will be granted until June 30, 2007, to begin the tip attribution process and make the election to participate in ATIP. As long as the employer notifies the Service that they would like to participate in the program via Form 8027, the safe-harbor protection will begin the first pay-roll period that the employer attributes tips based on the prescribed formula under the Revenue Procedure. The ATIP participation extension does not extend the Form 8027 filing deadline.
If the employer has already filed Form 8027 without electing ATIP participation, but now desires to participate, the employer should file a duplicate Form 8027 before June 30, 2007, electing to participate in the ATIP with a notation “Duplicate Filing to Elect ATIP Participation” prominently displayed on the Form. A copy of the duplicate filing must also be sent to the attention of the Employment Tax/ATIP Coordinator in Covington, Ky., as prescribed in the Revenue Procedure.
The IRS announced ATIP on July 28, 2006. The program provides employers in the food and beverage industry with an alternative option that encourages voluntary tip income reporting by tipped employees. ATIP provides the following significant benefits for the employer and the tipped employee:

Reduces recordkeeping burdens for the employer and the tipped employee


Simplifies enrollment procedures, no one-on-one meetings with the IRS


Promotes accurate reporting of tip wages on federal income tax returns using the business owners records


Provides safe-harbor protections against tip audits for the employer and the participating employee


Eliminates financial hardships associated with unplanned tax liabilities resulting from tip audits.

Details and requirements for participation for employers and employees are available in Revenue Procedure 2006-30.
Link:

Attributed Tip Income Program


Rev. Proc. 2006-30PDF

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IR-2007-43, Feb. 28, 2007
WASHINGTON — Internal Revenue Service Commissioner Mark W. Everson today announced the appointment of Michael R. Chesman as Director of the Office of Professional Responsibility.
Chesman most recently served the IRS as Director of the Office of Taxpayer Burden Reduction, which he launched in 2001 before taking a position in early 2006 as senior vice president and general counsel with Ullico, Inc., an insurance and financial services holding company.
“I’m pleased we’ve gotten Michael back at the IRS,” said IRS Commissioner Mark W. Everson. “His legal expertise is a good fit for the Office of Professional Responsibility, which enforces high professional and ethical standards among tax practitioners.”
The Office of Professional Responsibility (OPR) is responsible for setting, communicating and enforcing standards of competence, integrity and conduct among tax practitioners—specifically, attorneys, certified public accountants, enrolled agents and others who represent taxpayers before the IRS.
Chesman will report for duty on March 1.
During his tenure in the Office of Taxpayer Burden Reduction, Chesman was able to save taxpayers more than 200 million hours of work by simplifying tax responsibilities or eliminating unnecessary filing requirements.
Earlier in his career, Chesman served in the IRS Chief Counsel’s Office and also worked as an attorney for Prudential Financial, where, in addition to other duties, he was in charge of the tax and employee benefits divisions of the Prudential law department. He is a graduate of the University of Virginia School of Law and Yale University.
Link:


Standards of Practice for Tax Professionals


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IR-2007-42, Feb. 27, 2007
WASHINGTON — The Internal Revenue Service today provided tips to businesses, individuals and tax professionals to avoid errors involving Schedules K-1.
Income, deductions and credits from partnerships, S corporations, estates and trusts are reported to investors on Schedules K-1. Correct information on the forms by issuers and reporting of the income by recipients is important because the IRS matches the data to other tax returns to ensure accurate reporting.
A recent study found that many unnecessary notices issued to taxpayers could have been avoided if Schedule K-1 entity information was accurate when the forms were filed and if offsets against income reported on Schedule K-1 were reported correctly.
Businesses, individuals and return preparers can avoid unnecessary questions and correspondence by following these instructions:

For flow-through entities issuing Schedules K-1 — Ensure entity information on Schedules K-1 properly identifies the taxpayer (or other entity) responsible for reporting the Schedule K-1 income.
	 


For recipients of Schedules K-1 — Avoid netting or combining income against losses or expenses not reported on Form 8582, Passive Activity Loss Limitations. Refer to the instructions for Form 8582 on how to properly report passive activity losses. Ordinary business income should be reported separately from related deductions, such as unreimbursed partnership expenses or the Section 179 expense deduction. Refer to the Schedule E instructions for information on properly accounting for deductions related to Schedule K-1 income.


For example, unreimbursed partnership expenses from nonpassive activities should be entered on a separate line in column (h) of Schedule E’s line 28 and labeled “UPE” in column (a) of the same line. Do not combine these expenses or net them against any other amounts from the partnership.

To reduce errors, the IRS also encourages electronic filing of Schedules K-1 and other tax forms.
Related Items:

Form 1041, Schedule K-1PDF, Beneficiary’s Share of Income, Deductions, Credits, etc.


Form 1041, Schedule K-1 InstructionsPDF


Form 1065, Schedule K-1PDF, Partner’s Share of Income, Deductions, Credits, etc.


Form 1065, Schedule K-1 InstructionsPDF


Form 1120S, Schedule K-1PDF, Shareholder’s Share of Income, Deduction, Credits, etc.


Form 1120S, Schedule K-1 InstructionsPDF


Form 1040, Schedule EPDF, Supplemental Income and Loss


The Electronic IRS


IRS e-file

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IR-2007-41, Feb. 26, 2007
WASHINGTON — Eileen Mayer, currently head of the IRS’s Office of Fraud / Bank Secrecy Act, was named today as head of the agency’s Criminal Investigation Division.
“Eileen is a seasoned prosecutor and knows the criminal justice system inside and out,” said Mark W. Everson, IRS Commissioner. “She will play a key role in IRS efforts to halt tax fraud. I look forward to her joining the leadership team.”
As director of the IRS Small Business/Self-Employed Division’s Office of Fraud / BSA, Mayer was responsible for the agency’s internal fraud referral program. Her office ensured that egregious cases of noncompliance uncovered by the agency’s examiners were forwarded to criminal investigators working for CI. She also was responsible for the agency’s mission as one of the federal regulators involved in the enforcement of BSA. Within the agency, SB/SE is responsible for enforcement and compliance issues involving individual taxpayers and small businesses.
Mayer came to the IRS in January 2006 after 19 years at the U.S. Attorney’s Office in Washington, D.C. She was deputy chief of the criminal division, supervising the prosecution of federal criminal offenses in the D.C. area. Her tenure included a two-year detail as an Associate Deputy Attorney General with the Department of Justice and a three-year detail as special assistant to the Director of the Financial Crimes Enforcement Network (FinCEN). FinCEN is a branch of the Department of Treasury.
Her duties at FinCEN included coordinating the implementation of the original Bank Secrecy Act regulations for non-bank financial institutions. The act is the main federal law used to combat money laundering.
Mayer received a degree in economics from Randolph-Macon Women’s College at Lynchburg, Va., and her law degree from Georgetown University Law Center.
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IR-2007-38, Feb. 20, 2007
 
WASHINGTON — The Internal Revenue Service announced that purchasers of American Honda Motor Company, Inc., qualified vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.
Honda sold 12,716 qualifying vehicles to retail dealers in the quarter ending Dec. 31, 2006. This brings the cumulative number of qualified Honda hybrid vehicles sold as of Dec. 31, 2006, to 41,124.
The credit amount and make and model of qualified vehicles sold are:
Honda Accord Hybrid Model Year 2006
without updated calibration                                                             $650
Honda Accord Hybrid Model Year 2006                                        $1,300
with updated calibration
Honda Accord Hybrid, Model Year 2007                                       $1,300
Honda Accord Hybrid Navi Model Year 2007                                $1,300
Honda Civic Hybrid Model Year 2006 and 2007                             $2,100
Honda Insight Model Year 2006                                                      $1,450

Taxpayers may claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
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IR-2007-35, Feb. 14, 2007
WASHINGTON —The IRS announced today that it had entered into an agreement that resolves several disputed tax issues with Merck & Co., Inc. and its subsidiaries. The agreement will result in a payment to the government of approximately $2.3 billion in federal tax, net interest and penalties, and resolves all issues that had been in dispute between the parties for the tax years 1993-2001. The resolution is one of the largest achieved in recent years by the Service and a taxpayer through the examination process.
Both the IRS and Merck acknowledge that reaching an agreement of this magnitude was the result of cooperation by both parties. To facilitate this agreement, the IRS and the taxpayer used various issue management strategies, including the Fast Track Settlement Program.
Among the significant issues resolved were three issues that resulted from Merck’s use of minority equity interest financing transactions. The execution of these agreements should facilitate the ability of the IRS and the taxpayer to move forward and effectively address tax issues arising in subsequent examination years.
Related link: Fast Track Settlement 
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IR-2007-34, Feb. 13, 2007
 
WASHINGTON — The Internal Revenue Service will extend until March 30 the deadline for current and former U.S.-based employees of foreign embassies, consular offices and missions and international organizations to participate in a one-time settlement initiative to resolve outstanding tax matters related to their employment.
The deadline for participating in the offer, first announced November 17, had originally been February 20.  Following requests from several embassies, the date is being extended to make certain those wishing to participate in the initiative have the opportunity to do so.
The offer is open to employees of those organizations who are U.S. citizens, green-card holders and foreign employees who have  U.S. tax obligations.
The IRS estimates that as many as half of these employees subject to U.S. tax either fail to report their wages, claim deductions they are not entitled to, incorrectly establish SEP/IRA retirement plans, fail to pay self-employment tax or fail to file tax returns at all.
To participate, employees must submit amended or original tax returns, which properly reflect their income and expenses, for tax years 2003, 2004 and 2005.
Failure to act now could mean facing a costly audit process in the future. Foreign embassy, consular office or international organization employees who fail to come forward may be subject to IRS audits and penalties which could cover more than just three years.
Additional guidance on the extension will be announced soon.
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