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eTax Alerts

Tax Changes: Are You Keeping Up? - 3/22/2017
Payroll/HR Department receiving email from CEO/CFO requesting list of all employees’ W-2s probably is new W-2 phishing. Cyber criminals are using various spoofing techniques to disguise an email to make it appear as if it is from an organization executive to an employee in the payroll or human resources department requesting a list of all employees and their Forms W-2.

Corporate Extensions - 2/27/2017
The IRS has reassured the public that it knows what it is talking about in the 2016 instructions for Form 7004. Apparently, the IRS has been getting inquiries from preparers who are wondering if the instructions for Form 7004 are correct. The instructions indicate that the automatic extension period for corporations is six months, while §6081(b) states that the extension period for corporations is five months. The IRS explained that they were relying upon §6081(a) for the authority to grant six-month extensions, rather than the five-month extension period specified in §6081(b). For more information see the IRS notice here.

"Silent" Returns Will Be Processed - 2/21/2017
As a result of the President’s executive order on January 20, 2017, the IRS recently confirmed here that “silent” returns will be processed, both electronically and on paper. A silent return is the term the IRS is using to refer to individual returns where:

Forms W-2 & 1099-MISC Corrections - 2/2/2017
2016 Forms W-2 and 1099-Miscellaneous Income (if there is an entry on box 7 for Nonemployee compensation) were due to the IRS by January 31, 2017. That’s at least a month earlier than the year before. The problem? What if my client makes a small mistake on the W-2 or 1099 in reporting income or withholding? In prior years, the IRS never saw the mistake if we made the correction prior to the February 28 due date (March 31 for some issuers). This year, we could be caught up in issuing corrected forms to the IRS.

2017 Tax Season Staff Meeting Agenda - 1/1/2017
A staff meeting to begin another tax season is a good idea, whether your staff is just your beleaguered spouse, one admin, or includes partners, preparers, reviewers and bookkeepers. Changes occur and communicating them to all workers who deal with tax returns is crucial. If you have ever discovered that your most valuable person didn’t know what you thought was a simple “everyone-knows- that” change, and had errors because of that assumption, then you know the necessity to start the tax season right with staff. Here are a few ideas for your staff meeting agenda.

New Law “Cures” Small Employer Health Insurance Dilemma - 12/20/2016
The 21st Century Cure Act has passed Congress and the President has just approved and signed. The legislation provides for an exception from group health plan requirements for qualified small employer health reimbursement arrangements. Beginning in 2017, a small employer may again reimburse employees for individual health insurance premiums without fear of the onerous $100 per day per employee penalty assessed for violation of health care reform.

Overtime Rules Change Dec. 1, 2016 – Is Your Client Ready? - 12/6/2016
Fair Labor Standards Act. The Fair Labor Standards Act (FLSA) provides American workers the right to a minimum wage and time-and-a-half pay for more than 40 hours of work in a week. The FLSA rules apply to hourly and salaried workers, but not to “white collar” workers whose salaries and duties exempt them from the overtime pay requirements.

Dead-broke Client and an IRS Audit - 12/5/2016
Did your dead-broke client receive an IRS audit letter? If so, ask for a “collectability determination.” If your client has piled up medical bills or credit card debt or business losses and has no ability to pay additional taxes, an IRS audit can be halted.

Last Minute Changes Affect Clients - 12/4/2016
Federal Judge Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas granted a motion temporarily barring the implementation of the December 1, 2016, Fair Labor Standards Act (“FLSA”) new rules on overtime pay from going into effect nationwide. A consolidated lawsuit was filed in September 2016 by 21 states and more than 50 business groups. Judge Mazzant concluded a plain reading of the FLSA demonstrated that Congress intended the “white collar” exemptions to apply to employees doing executive, administrative, or professional (EAP) duties, without reference to a minimum salary level.

Estate Planning Questions for Large and Small Estates - 12/3/2016
President-elect Donald Trump has proposed eliminating estate taxes. If there is a repeal, or when there is a repeal, will estate planners be out of a job? Of course not—estate planning is not only about tax. It includes how the estate is divided, whether the estate is big or small. Estate planning mistakes by the ultra-rich, when they had plenty of money to pay for the best advice, make a dramatic starting point for a discussion about transferring family assets to the next generation.

Avoiding and Resolving ACA Employer Mandate Policies - 10/28/2016
A penalty applies if an applicable large employer did not provide affordable and adequate insurance coverage. The IRS will send employers a §1411 Certificate informing them that an employee has applied for insurance through the Marketplace and that the employee qualified for a premium assistance credit. Once it receives the §1411 Certificate, the employer is allowed to respond before any liability is assessed or notice and demand for payment is made.

Be Careful Paying Wages to Minor Children - 10/27/2016
Tax planning often includes a recommendation to the small business owner that he or she pay wages to their minor children. Wages to the kids may mean (1) using the child’s standard deduction to provide some tax free money, (2) shifting income from the parent’s high tax bracket to the child’s lower bracket, (3) saving FICA/SE tax on wages paid to the minor child, and (4) allowing the parent (or child) to fund a Roth IRA. All of these are legitimate tax savings ideas as long as the parent follows some strict rules. Two 2016 Tax Court cases show what can go wrong even with good intentions.

FASB Issues Brand New Guidance for Not-for-Profit Entities - 8/23/2016
On August 18, 2016 FASB issued Update 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. This represents the culmination of the first phase of FASB’s project on Not-for-Profit Entities and represents the first major revision since the issuance of FASB 116 and 117 in 1993.

Extender Bill Passed By Congress - 12/18/2014
Late as usual, Congress finally extended almost 60 expiring tax provisions to December 31, 2014. Sen. Ron Wyden, chairman of the Senate Finance Committee, who voted against the bill, criticized passage, saying that "with this stop-and-go tax extender bill, Congress is turning in its tax homework 11 months late and expecting to earn full credit."