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Here’s What Historic Building Owners Should Know About The Rehabilitation Tax Credit

IRS Tax Tip

Organizations around the country continue to promote historic buildings and other important heritage sites as May is National Historic Preservation Month. As part of this month, anyone who owns a historic building should remember that the rehabilitation tax credit offers an incentive to renovate and restore old or historic buildings. Tax reform legislation passed in December 2017 changed when the credit is claimed and provides a transition rule.

Here are some things that building owners should know about this credit:

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IRS Releases Data Book For 2018 Showing Range Of Tax Data Including Audits, Collection Actions And Taxpayer Service

IRS Logo - Notices

The Internal Revenue Service today released the 2018 IRS Data Book, a snapshot of agency activities for the fiscal year.

The 2018 IRS Data Book describes activities conducted by the IRS from Oct. 1, 2017, to Sept. 30, 2018, and includes information about tax returns, refunds, examinations and appeals. The annual publication is illustrated with charts showing changes in IRS enforcement activities, taxpayer assistance levels, tax-exempt activities, legal support workload and IRS budget and workforce levels when compared to fiscal year 2017 and prior years. Included this year is a section on taxpayer attitudes from a long-running opinion survey.

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LB&I Announces Large Corporate Compliance Program

IRS Announcement On Large Business

The Internal Revenue Service announced a key advancement in how it identifies its biggest and most complex large corporations.
On May 15, the IRS’s Large Business and International Division (LB&I) began a new application of data analytics for determining the population of its largest and most complex corporate taxpayers. This new Large Corporate Compliance (LCC) program replaces the Coordinated Industry Case (CIC) program and covers compliance oversight for LB&I’s largest corporate taxpayers. LCC is one of LB&I’s portfolio of compliance programs.

LCC employs automatic application of the large case pointing criteria to determine the LCC population. For example, pointing criteria include such items as gross assets and gross receipts. In the past, this was done on a manual, localized basis. Automated pointing allows a more objective determination of the taxpayers that should be part of the population.

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Capital Gains, Losses, And Sale of Home: What Is The Basis Of Property As A Gift?

IRS Capital Gains

According to the IRS:

To figure out the basis of property you receive as a gift, you must know three amounts:

If the FMV of the property at the time of the gift is less than the donor’s adjusted basis, your adjusted basis depends on whether you have a gain or loss when you dispose of the property.

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IRS Highlights Credits And Deductions For Small Businesses

IRS _ Credits And Deductions For Small Business

During Small Business Week, the Internal Revenue Service reminds small business owners and self-employed individuals to take deductions and credits that will help their bottom line.

This year, National Small Business Week is May 5-11. For more than 50 years, the week has recognized the important contributions of America’s entrepreneurs and small business owners.

Reviewing options and eligibility now can help business owners better estimate their tax situation and plan ahead. Here are just a few key deductions and credits that can benefit small business taxpayers.

Deductions
Qualified Business Income Deduction

Many individuals, including owners of businesses operated through sole proprietorships, partnerships, S corporations, trusts and estates may be eligible for a qualified business income deduction, also called the section 199A deduction. Some trusts and estates may also claim the deduction directly. Read more

Tax Cuts And Jobs Act: Comparison For Large Businesses And International Taxpayers

IRS LOGO TJCA

The Tax Cuts and Jobs Act (“TCJA”) made significant changes that affect international and domestic businesses, such as deductions, depreciation, expensing, tax credits and other tax items. This side-by-side comparison can help taxpayers understand the changes and plan accordingly.

Some provisions of the TCJA that affect individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine how these provisions work with their business situation.

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Businesses Should Review Depreciation Deductions Rules

IRS Logo 2

Businesses should know the tax rules for deducting depreciation on certain property. This deduction can benefit eligible business taxpayers. The Tax Cuts and Jobs Act made changes to the rules around depreciation that will affect many businesses.

First off, businesses should remember they can generally depreciate tangible property, except land. Tangible property includes:

  • Buildings
  • Machinery
  • Vehicles
  • Furniture
  • Equipment

Here are some of the changes to business depreciation under tax reform:

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Some People Get More Time To File IRS Tax Return Without Asking

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Anyone can request an automatic tax-filing extension, but some people get extra time without asking, according to the Internal Revenue Service.

The IRS estimates that more than 14.6 million taxpayers will get an automatic extension this filing season, either by filing a form or making an electronic tax payment. But some taxpayers, such as disaster victims, those serving in a combat zone and Americans living abroad, get more time, even if they don’t ask for it. Here are details on each of these special tax-relief provisions.

Victims Of Certain Federally Declared Disasters

Some disaster victims may have extra time to file their tax returns and pay any taxes due. Currently, taxpayers affected by the Nov. 30, 2018, earthquake in parts of Alaska have until April 30, 2019, to file and pay. Similarly, those affected by the March 3, 2019, tornadoes and severe storms in parts of Alabama have until July 31, 2019, to file and pay. Residents of California impacted by wildfires on Nov. 8, 2018, have until April 30, 2019, to file and pay. And those affected by the March 9, 2019, winter storms and flooding in parts of Nebraska and the March 12, 2019, severe storms and flooding in parts of Iowa have until July 31, 2019, to file and pay. This relief applies to tax returns and tax payments currently due within the relief periods.

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IRS Transfer Pricing Selection And Scope Of Analysis – Best Method Selection

Transfer Pricing Examination Process Update

INTRODUCTION

Transfer pricing issues make up a substantial portion of the LB&I inventory.  As a result, significant LB&I resources are devoted to transfer pricing issues.  LB&I recognizes that it needs to manage transfer pricing issues under examination and related resources in the most efficient and effective manner possible.  This Directive provides instructions with respect to managing certain transfer pricing issues in inventory.

This Directive applies to:
• Examinations of LB&I taxpayers (i.e., assets equal to or greater than $10,000,000) who are required to file (including extensions) forms 5471 or 5472 with their original annual US tax return
• Taxpayers in the Advance Pricing Agreement (APA) program.

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For Those Who Missed Tax Filing Deadline: IRS States File Now To Avoid Bigger Tax Bill

IRS - File Now

While the federal income tax-filing deadline has passed for most people, there are some taxpayers who have not yet filed their tax returns. The Internal Revenue Service encourages them to file now, even if they can’t pay to avoid potential penalties and interest.

There are many ways the IRS offers help to taxpayers facing this situation. The IRS offers these simple tips for handling some typical after-tax-day issues:

For those who didn’t file by the April deadline

There is no penalty for filing late if a refund is due. Penalties and interest only accrue on unfiled tax returns if taxes are not paid by April 15, the tax filing deadline this year in most states. Because of local holidays, the deadline for taxpayers living in Maine or Massachusetts was April 17, 2019.

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See Who Made The IRS Dirty Dozen List This Year

IRS Tax Scams This Year

Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. (IR-2019-26)

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2019-28)

Identity Theft: Taxpayers should be alert to tactics aimed at stealing their identities, not just during the tax filing season, but all year long. The IRS, working in conjunction with the Security Summit partnership of state tax agencies and the tax industry, has made major improvements in detecting tax return related identity theft during the last several years. But the agency reminds taxpayers that they can help in preventing this crime. The IRS continues to aggressively pursue criminals that file fraudulent tax returns using someone else’s Social Security number. (IR-2019-30)

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IRS New Booklet On Offer In Compromise

IRS - OIC

The IRS just issued an updated publication with information for individual taxpayers and business owners unable to pay their taxes. This electronic pub, Offer in Compromise Booklet, helps people understand how an offer in compromise works.

An offer in compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. An offer in compromise is an option when a taxpayer can’t pay their full tax liability. It is also an option when paying the entire tax bill would cause the taxpayer a financial hardship. The ultimate goal is a compromise that suits the best interest of both the taxpayer and the agency.

When reviewing applications, the IRS considers the taxpayer’s unique set of facts and any special circumstances affecting the taxpayer’s ability to pay as well as the taxpayer’s:

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