Source: http://www.carnahanlaw.com/news-and-miscellaneous-legal-topics-2016/
Timestamp: 2019-04-21 17:01:47
Document Index: 523410599

Matched Legal Cases: ['§300', '§300', '§300', '§300', '§300', '§300', '§501', '§501', '§1', '§301', '§301', '§ 301']

News and miscellaneous legal topics – 2016 - carnahanlaw
IRS Business and other standard mileage rates decrease for 2017 12/14/16
The IRS announced the 2017 optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) will decrease by $.05 to $.53 1/2 per mile for business travel, and the rate for using a car to get medical care or in connection with a move that qualifies for the moving expense deduction will decrease by $.02 to $.17 per mile.
New Jan. 31 Deadline for Employers to file Forms W-2 11/4/16
The fee includes reviewing and monitoring the OIC, the IRS explained. No fee is charged if an offer is based solely on doubt as to liability or if made by a qualified lower-income taxpayer. The IRS reported that the full cost of providing an OIC is more than $2,000. The full cost of providing a service includes, but is not limited to, salaries, retirement benefits, rents, utilities, travel, and management costs, as well as an appropriate allocation of overhead and other support costs associated with providing the service.
Proposed Amendments of Regulations (REG-108934-16), published in the Federal Register on October 13, 2016.
“Instructional class” not subject to Missouri Sales Tax
The Missouri Legislation passed S.B 1025 to override the Governor’s veto, providing that amounts paid for an “Instructional class”, including any class, lesson, or instruction intended or used for teaching are not subject to Missouri sales tax. S.B. 1025, Laws 2016, effective October 14, 2016.
The program enables designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables, on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts. The IRS will notify taxpayer and their representative in writting that their account is being transferred to a private collection agency. The IRS will send a second, separate letter to the taxpayer and their representative confirming this transfer.
These agencies will be able to identify themselves as contractors of the IRS collecting taxes, but must be courteous and respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.
The IRS will continue to keep taxpayers informed about scams and provide tips for protecting themselves. The IRS encourages taxpayers to visit IRS.gov for information including the “Tax Scams and Consumer Alerts” page. For more information visit the Private Debt Collection page on IRS.gov.
IRS Alert warns Against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act 9/26/16
The IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email that includes the fake CP2000 as an attachment. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation. The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to taxpayers. The indicators are:
When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using information you provide. This information includes details about your family composition and your projected household income. It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.
The IRS launched a new web page – “Sharing Economy Center” 8/22/16
The site is directed at taxpayers participating in “on-demand”, “gig” or “access economy”, etc., online platforms available to rent a spare bedroom, vacation rental, provide car rides, or to connect and provide a number of other goods or services, noting the income is generally taxable even if you don’t receive a Form 1099-MISC, Miscellaneous Income, Form 1099-K, Payment Card and Third Party Network Transactions, Form W-2, Wage and Tax Statement, or some other income statement.
$52 for a direct debit installment agreement (taxpayer authorizes monthly electronic funds transfer from taxpayer’s bank account; and
Regular Installment Agreements $225 – sets up in person, by phone, or by mail to make manual payments by mailing a check or electronically through the Electronic Federal Tax Payment System (EFTPS). (Prop Reg§300.1(b))
Direct Debit Installment Agreements $107 – sets up by phone or mail to make automatic payments through a direct debit from a bank account. (Prop Reg §300.1(b)(1))
Online Payment Agreements $149 – sets up by Online Payment Agreement application on http://www.irs.gov to make manual payments by mailing a check or electronically through the EFTPS. (Prop Reg §300.1(b)(2))
Direct Debit Online Payment Agreements $31 – sets up by Online Payment Agreement application onhttp://www.irs.gov to make automatic payments through a direct debit from a bank account. (Prop Reg §300.1(b)(2))
Restructured/Reinstated Installment Agreements $89 – modifies a previously established installment agreement or reinstates a previously established installment agreement on which the taxpayer has defaulted. (Prop Reg §300.2(b))
Low-Income Rate remains at $43 – any type of installment agreement, other than a direct debit online payment agreement ($31), and when a low-income taxpayer restructures or reinstates any installment agreement. (Prop Reg §300.1(b)(3))
The Tax Court held a Chapter 11 debtor was liable for self-employment tax on self-employment income earned after filing for bankruptcy. The Court found that while the income tax arising from debtor’s post petition earnings are the bankruptcy estate’s liability of under Code Sec. 1398(c)(1), and Items included in the estate’s gross income under Code Sec. 1398(e)(1) are not included in debtor’s gross income. (Code Sec. 1398(e)(2)), there was no similar provision for self-employment taxes. Sisson, TC Memo 2016-143. he Court noted in its decision that its conclusion is consistent with Notice 2006-83, 2006-2 CB 596, but did not rely on that notice.
Organizations who intend to operate under §501(c)(4) are now required to submit Form 8976, Notice of Intent to Operate Under §501(c)(4) to the IRS. Most organizations must submit this notice within 60 days of their establishment.
The Form 8976 Electronic Notice Registration System allows organizations to complete the notification process, keeps account information current and enables organizations to receive secure, digital communications from the IRS. Form 8976 may only be completed and submitted electronically. There is no paper form. This is a one-time notification. However, you will have to file annual information returns or notices (e.g., Form 990, Form 990-EZ, or Form 990-N) depending on your total assets and gross receipts. In addition to submitting the Form 8976 notice, 501(c)(4) applicants may also choose to file a complete Form 1024. Submission of a Form 1024 does not relieve an organization of the requirement to submit a Form 8976.
Each electronic 990 filing is available as a unique XML file in the “irs-form-990” S3 bucket in the US East (N. Virginia) region.
A Program Manager Technical Advice (PMTA) has concluded that IRS has the authority to modify tax return forms and instructions under Code Sec. 6011(a) and Reg. §1.6011-1(a) to require the sole owner of a disregarded entity to provide the entity’s Employee Identification Number (EIN) on the owner’s tax return. A return filed without the additional EIN would still be a valid return for purposes of the statute of limitations and failure to file penalties. The activities of a disregarded entity are treated the same as a sole proprietorship, branch, or division of its owner. (Reg. §301.7701-2(a)) The income earned by a disregarded entity must be reported on the owner’s income tax return and reported under the owner’s Taxpayer Identification Number (TIN) (Reg. §301.6109-1(h)). However, disregarded entities can use an EIN for other purposes, such as for reporting employment taxes and other business taxes. (Reg. § 301.6109-1(d)(4)(ii)) Issue. Allowing a taxpayer to use two types of identification numbers (TINs and EINs) may cause problems for IRS in associating different types of returns with a single taxpayer. If a disregarded entity has an EIN, it typically does not appear on the owner’s tax return. Certain information returns such as Forms 1099 that reflect income earned by a disregarded entity may reflect the entity’s EIN and not the owner’s TIN. This makes matching the income reported on such an information return to what is reported on an income tax return difficult. Program Manager Technical Advice 2016-008
IRS Deputy Commission for Services and Enforcement, John Dalrymple in a May 20, 2016 memorandum to the Commissioners, Large Business and International, Small Business and Self-Employed, Tax-Exempt and Governmental Entities, and Wage and Investmen ordered that going forward, IRS employees must use the appropriate initial contact letters listed in the Internal Revenue Manual (IRM) to notify a taxpayer when a return is selected for examination (audit), and “will not make initial contact by telephone.”
The Act repealed the TEFRA uniform partnership audit rules and replaced them with a streamlined single set of rules for auditing partnerships and their partners at the partnership level.
The statute raises a number of questions, some of which might be considered for a technical corrections bill.
In general, adjustments to partnership income, gain, loss, deduction, or credit are determined at the partnership level, and any tax attributable to such adjustment is assessed and collected, and the applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share is determined, at the partnership level.
“Tax” resulting from a partnership’s audit’s increase in taxable income is levied on the partnership, not partners. Income, gain, loss, and deduction adjustments items are aggregated, the aggregate is modified in certain ways, and the modified aggregate is multiplied by the highest individual or corporation tax rate (not the highest rate applicable to a partner), and increased (or decreased) by each credit adjustment. The partnership owes the imputed underpayment plus penalties, if applicable, and apparently interest.
Missouri Income Tax: Refund Fraud Prevention Measures Increased For the upcoming tax season 2/18/16
The Missouri Department of Revenue (“DOR”) is implementing additional security measures to ensure that individual income tax refunds are issued to legitimate taxpayers. These enhanced fraud prevention measures will result in additional processing time for refunds. Tips to help taxpayers prevent and report identity theft are available on the Identity Theft page of the department’s website at http://dor.mo.gov/personal/individual/identity_theft.php. Tax Bulletin Vol. 5, Ed. 1, Missouri Department of Revenue, February 3, 2016. The page includes links to form 5593that can be emailed or faxed to DOR to advise DOR of possible fradulent tax returns.
The “Bipartisan Budget Agreement of 2015”, P.L. 114-74, eliminates the TEFRA unified partnership audit rules and the electing large partnership rules, and replaces them with streamlined partnership audit rules, effective generally for returns filed for partnership tax years beginning after Dec. 31, 2017.
Many questions remain to be answered, and the new rules may result in the partnership agreement needing to be amended.
Under the TEFRA rules, the IRS conducts a single administrative proceeding for most partnerships with more than 10 partners (the rules don’t apply if there are fewer partners), the tax treatment of any partnership item is generally determined at the partnership level, then the IRS recalculates each partner’s tax liability.
Partnerships with 100 or fewer qualifying partners can elect out of the new rules for any tax year, and the partnership and partners would be audited under the general rules applicable to individual taxpayers. But, to qualify to elect out, partners can only be individuasl, C corporations, a foreign entity that would be treated as a C corporation were it domestic, S corporations, or estates of a deceased partner. Trusts are not listed. The partnership must notify its partners of the election.
IRS announces error in Identity Protection (“IP”) PIN notices. 1/7/16
“Due to an error, taxpayers are receiving Identity Protection PIN letters with an incorrect year listed. Taxpayers and tax professionals should be advised the IP PIN listed on the CP 01A Notice dated January 4, 2016 is valid for use on all individual tax returns filed in 2016.”
“The notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return. The IRS emphasizes the IP PIN listed on the CP 01A notice is valid for the 2015 returns. Taxpayers and their tax professionals should use this PIN number for 2015 tax returns, which the IRS will begin accepting from taxpayers starting Jan. 19, 2016. The IRS apologizes for the confusion and any inconvenience.”