Peter J. Scalise | TaxConnections

17 Dec 2021

The IRS Issues Revised R&D Tax Credit Instructions

On December 15^th, the Internal Revenue Service issued an early release draft of instructions for IRS Form 6765 entitled “Credit for Increasing Research Activities”, to properly reflect legislation regarding the determination of qualified wages that impacts Lines 5 and 24 from the December of 2020 revision.

It should be duly recalled, pursuant to legislation enacted in December of 2020, wages for qualified services do not include:

Wages paid to or incurred for any employee after December 31, 2020 and before July 1, 2021, if the employer uses the same wages to claim the Employee Retention Credit (“ERC”) on an employment tax return such as IRS Form 941 entitled “Employer’s Quarterly Federal Tax Return”; and
Wages paid to or incurred for any employee generally after December 27, 2019 and before April 17, 2021, if the employer uses the same wages to claim the 2020 qualified disaster ERC on IRS Form 5884-A entitled “Employee Retention Credit for Employers Affected by Qualified Disasters”.

As a reminder, do not file draft forms and do not rely on draft forms, instructions, and / or publications for filing until finalized by the Service. The draft instructions for IRS Form 6765 can be reviewed at https://www.irs.gov/pub/irs-dft/i6765–dft.pdf The Service is also currently accepting comments in connection to the draft instructions at https://www.irs.gov/forms-pubs/comment-on-tax-forms-and-publications All tax filing forms and instructions are expected to be finalized by the Service before the end of January 2022.

Have a question on R&D Tax Credits? Contact Peter J Scalise.

Written by Peter J. Scalise | Posted in Peter J Scalise • R&D Tax Credits

30 Nov 2021

An Industry Spotlight on Philanthropy: The Accounting Industry Leadership Council’s Journey To End Alzheimer’s Disease

Every year, on the Tuesday after Thanksgiving, people take the time to celebrate the kick-off to the holiday season by giving back to their community and supporting philanthropy now fondly known as “Giving Tuesday” which falls this year on November 30^th.

The Alzheimer’s Association Accounting Industry Leadership Council (hereinafter the “Council”) was established in January of 2020, immediately before the COVID-19 pandemic was about to unfold worldwide. Regardless of these daunting circumstances, the Council moved forward with its mission to bring the accounting profession together as one to end Alzheimer’s and all dementias.

As a philanthropist committed to giving back to my community and to my profession, I co-founded the Council with Rob Lucas, Director of Corporate Initiatives for the Alzheimer’s Association. While serving as the Chairman for the Alzheimer’s Association Manhattan Walk to End Alzheimer’s signature fundraising event at the historic South Street Seaport District, I recommended a strategy for bringing industry sectors together as one to raise significant funds collectively to make a greater impact to support the mission of the Alzheimer’s Association.

Written by Peter J. Scalise | Posted in Accounting Industry • Philanthropy

24 Nov 2021

A Legislative Update From Capitol Hill On The Federal-Level R&D Tax Credit Program

On Friday, November 19^th the House of Representatives narrowly passed the Build Back Better Act, H.R. 5376, by a vote of 220 to 213. The bill encompasses a wide range of budget and spending provisions in connection to significant tax law reform as well as funding for mitigating climate change, expanded health care, housing, education, childcare amongst many other provisions. As the Senate now prepares to negotiate a final deal on this legislation several leading Democrats indicated that a bilateral agreement on the reconciliation bill was likely to include a plan to continue for the full expensing treatment for R&D expenditures through December 31^st of 2025 and to delay the amortization requirements of such expenditures until January 1^st of 2026.

Written by Peter J. Scalise | Posted in Legislative Update

16 Oct 2021

New Administrative Authority Issued Governing Requirements For Valid R&D Tax Credit Claims

On October 15^th, the Internal Revenue Service (hereinafter the “Service”) has set forth additional information that taxpayers will be required to include for a R&D tax credit claim for refund to be considered valid. It should be duly noted that while the statutory authority under I.R.C. § 41 and its corresponding treasury regulations already outline the required statutory and administrative authority to get to a tax return filing position under Circular 230 for a R&D Tax Credit refund claim to be valid, the Service decided that additional administrative authority is warranted to improve the tax administration procedures with clearer instructions for eligible taxpayers to claim the R&D tax credit while reducing the number of disputes over such claims.

Successful tax administration entails ensuring taxpayers truly understand what is required to support the claim for the R&D tax credit. Each year, the Service receives tens of thousands of R&D tax credit claims for credits in the aggregate totaling hundreds of millions of dollars from business entities and individual taxpayers. The Service is currently examining a substantial number of R&D tax credit cases which consume considerable resources from both the Service and our judicial system as many disputes are settled in District Court or Tax Court.

Written by Peter J. Scalise | Posted in R&D Tax Credit Claims

27 Dec 2019

Tax Aspects Of The Further Consolidated Appropriations Act Of 2020

PETER J SCALISE - Consolidated Appropriations Act of 2020

Introduction

On Friday, December 20^th of 2019, President Donald J. Trump signed into law:

H. R. 1158, entitled the “Consolidated Appropriations Act, 2020,” which divisions A through D of the enrolled bill provides full-year funding through September 30, 2020, for projects and activities of certain agencies of the Federal Government; and
H. R. 1865, entitled the “Further Consolidated Appropriations Act, 2020,” which Divisions A through H of the enrolled bill provides full-year funding through September 30, 2020, for projects and activities of the remaining agencies of the Federal Government.

Both H.R. 1158 and H.R. 1865 (hereinafter “the new Act”) averted a government shutdown that would have commenced on December 21, 2019 without this sweeping $ 1.4 trillion spending package being passed into law. Most of the new Act outlines how the government will appropriate the federal budget funding across numerous departments and programs including, but not limited to, the Department of Defense; Department of Transportation; Department of Labor; Department of the Interior; and of course, the Department of Treasury.

Written by Peter J. Scalise | Posted in Consolidation Appropriations Act

22 Oct 2019

A Practical Guide To Perfecting Your Tax Research Techniques

Tax Research Methodology: A Practical Guide to Perfecting Your Tax Research Techniques and Achieving Sustainable Tax Return Filing Positions for the Upcoming 2020 Tax Season and Beyond!

Introduction

In order to properly optimize your accounting firm’s overall efficiency, effectiveness, and productivity in connection to researching and resolving a tax issue and determining the sustainability of a tax return filing position per Circular 230, the appropriate tax research processes must be meticulously designed, implemented, and executed.

The subsequent five practical steps will guide you in establishing and sharpening your 20/20 vision as it relates to reviewing your tax research methodology through an all-inclusive lens in time for the 2020 tax season while properly ascertaining the likelihood of success should a tax position taken on a tax return be challenged by the Internal Revenue Service (hereinafter the “Service”) upon examination.

Written by Peter J. Scalise | Posted in Tax Research Guide

04 Jan 2019

Breaking News! IRS Issues New Administrative Authority Governing The Tax Treatment Of Depreciation

Peter J Scalise - Tax Treatment on Depreciation

On December 21^st of 2018, the Internal Revenue Service (hereinafter the “Service”) issued new administrative guidance in the form of Rev. Proc. 2019-08 governing expense deductions and depreciation measures in connection to real property as enacted by the 2017 Tax Cuts and Jobs Act, Pub. L. No. 115-97, (hereinafter the “TCJA”’). It should be duly recalled, the TCJA enacted the subsequent tax law amendments including, but not limited to:

I. R.C. § 179 by modifying the definition of “Qualified Real Property” that may be eligible as I.R.C. § 179 property pursuant to I.R.C. § 179(d)(1);
I. R.C. § 168 by requiring certain property held by an electing real property trade or business and reducing the recovery period under the Alternative Depreciation System (hereinafter “ADS”) from 40 years to 30 years for commercial residential real estate property; and
I. R.C. § 168 by requiring certain property held by an electing farming business to be depreciated under the ADS.

Written by Peter J. Scalise | Posted in Depreciation Tax Treatment • Internal Revenue Code

25 Jun 2018

A Spotlight On The Extension And Expansion Of The California Film & Television Tax Credit Program 3.0

Peter J Scalise, Tax Credits And Incentives, Film & Entertainment

Overview of Film Production Tax Incentives

Motion Picture and Television Production Tax Incentives (hereinafter “MPIs”) are tax incentives that are available at the U.S. Federal Level, at most of the U.S. Multi-State Levels, and on a Global Level through nearly a hundred participating countries worldwide and should certainly be incorporated into the tax planning process for movie and television studios to properly tax affect their costs of production.

Three Primary Phases of Film Production

The three primary phases of qualified filmmaking production include the “Qualified Pre-Production Phase”, the “Qualified Production Phase”, and the “Qualified Post-Production Phase”. It should be duly noted that it is fairly common practice in the movie and television studio industry to shoot the aforementioned phases of qualified production throughout several locations (e.g., Qualified Production Phase in the City of Los Angeles, California, USA and the Qualified Post-Production Phase in the City of Vancouver, British Columbia, Canada). Consequently it is critical to be cognizant of tax incentives available, as applicable, not only state by state within the United States but also country by country worldwide in order to reduce a movie or television studios global effective tax rate.

Written by Peter J. Scalise | Posted in Film Industry • R&D Tax Credits

15 Feb 2018

Tax Aspects Of The Bipartisan Budget Act of 2018

Peter J. Scalise, New York, USA, Tax Advisor, Tax Blog, TaxConnections

Introduction

On Friday, February 9^th of 2018, President Donald J. Trump signed into law H.R. 1892 entitled the Bipartisan Budget Act of 2018 (hereinafter “BBA”) just hours after the Senate passed the bill by a vote of 71-28 and the House of Representatives passed the bill by a vote of 240-186. The BBA resolved numerous non-tax law related issues for the federal government on a bipartisan basis including but not limited to raising the debt ceiling; domestic and military spending; community healthcare; and disaster relief. In addition, the BBA includes tax relief for certain disasters, a retroactive one-year tax extenders package for statutory tax incentives that previously expired on December 31, 2016 including several highly prevalent energy tax incentive programs pursuant to I.R.C. § 179D and I.R.C. § 45L, amongst a highly diverse array of other statutory tax provisions.

Individual And Business-Entity Tax Relief For Certain Disasters

Written by Peter J. Scalise | Posted in Bipartisan Budget Act 2018

03 Nov 2017

A Practical Guide to the Tax Cuts and Jobs Act

On Thursday, November 2^nd the House of Representatives released a draft of their tax reform legislation entitled ‘The Tax Cuts and Jobs Act’ as presented by the Ways and Means Chairman Kevin Brady (R-TX). This legislation represents the largest proposed transformation of the U.S. tax code in more than thirty years. While both changes are expected in the committee markup phase and the Senate will certainly bring its own priorities to the process, this release is the first bill text we’ve seen from a tax-writing committee. The goal of President Trump and the Republicans in Congress is to have a final tax bill enacted ideally before the Thanksgiving break, but certainly before the calendar year end of 2017. The subsequent synopsis will serve to highlight just some of the more significant provisions of this bill in its current form and its impact on both individuals and businesses.

Written by Peter J. Scalise | Posted in Legislative • Tax Reform

03 Oct 2017

A Practical Guide to the 2017 Trump Tax Reform Plan – By Tax Advisor Peter J. Scalise

Introduction

On September 27^th, President Trump and Republican leaders in Congress announced a new conceptual framework for tax reform which they optimistically hope to get enacted into law on or before December 31^st of 2017. The proposed conceptual framework broadly describes significant tax law changes affecting both individuals and businesses alike ranging from lower tax rates for individuals and businesses to the repeal of many tax incentives – both deductions and credits. President Trump stated “it is now time for all members of Congress – Democrat, Republican, and Independent – to support pro-American tax reform. It’s time for Congress to provide a level playing field for our workers, to bring American companies back home, to attract new companies and businesses to our country, and to put more money into the pockets of everyday hardworking people.”

Written by Peter J. Scalise | Posted in Tax Reform

31 Aug 2017

Start-Up Companies Are Now Receiving Their R&D Tax Credit Payroll Refund Checks

The Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) significantly enhanced the Research and Development Tax Credit Program (“RTCP”) on a myriad of levels by making the RTCP a permanent tax incentive within the Code and considerably restructured the program to: Read More

Written by Peter J. Scalise | Posted in Tax Credit