Archive for Tax Policy

FLASH ALERT! WOTC: IRS Notice 2015-13: Providing Transition Relief For Employers Submitting Late WOTC Applications

We Have Been Waiting For This!

The IRS has released IRS Notice 2015-13, which provides transition relief given the late retroactive renewal of the Work Opportunity Tax Credit program in December 2014. Notice 2015-13 waves the 28-day deadline for submitting IRS Form 8850 (the WOTC Pre-screen Notice) for qualifying employees hired in 2014.  The extended deadline for submitting the applications for affected employees is now April 30, 2015.

From the Notice:


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The President Unveiled His 2016 Budget Which Includes a Tax on Foreign Profits!

President Barack Obama on Monday unveiled a fiscal 2016 budget blueprint that proposed to tax the $2 trillion in earnings held by American companies offshore as part of a set of revenue changes that would generally increase taxes on the wealthy and lower them for the middle class.

His budget plan includes:

• A one time 14 Percent Tax would on Foreign Profits.

· This is acts estimated to raise $268 billion to help pay for a $478 billion, six-year re-authorization of the Highway Trust Fund. Read more

Change Of Accounting Method

Final Tangible Property Regulations Necessitate that Many Businesses Apply for Change Of Accounting Method: IRS Form 3115; Rev Procs 2015-13 & 2015-14

Back in June 2014 I blogged about the new IRS Regulations governing tangible personal property. These regulations prompted a vigorous debate over the last 7 months between the most astute students of the US Tax Code as to what constitutes the need to file IRS Form 3115 – Change in Accounting Method for our business clients as a direct result of these new governing regulations.

Many practitioners make compelling points supporting the position that most ALL Read more

National Taxpayer Advocate Report To Congress Released

On 1/14/15, Nina Olson, the National Taxpayer Advocate released her required annual report to Congress about problems with the tax system. As noted on the NTA website, the key parts of this 700+ page report are:

Most Serious Problems Legislative Recommendations Most Litigated Issues Volume 2: TAS Research and Related Studies

Some key points noted include:

• Tax law complexity (here + Executive Summary)
• The need to put taxpayer bill of rights into the Internal Revenue Code (here)
• Problems due to inadequate funding of the IRS (here + Executive Summary) Read more

Taxpayer Advocate Delivers Annual Report to Congress and Cites Offshore Voluntary Disclosure Program Inequities.

National Taxpayer Advocate Nina E. Olson today released her 2014 annual report to Congress, which expresses concern that taxpayers this year are likely to receive the worst levels of taxpayer service since at least 2001 when the IRS implemented its current performance measures.  The report recommends that Congress enact a principles-based Taxpayer Bill of Rights, adopt additional safeguards to make those rights meaningful, and provide sufficient funding to make the “Right to Quality Service” a reality.

In the preface to the report, Olson emphasizes four points:

• “First, the budget environment of the last five years has brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively; Read more

E.U. NEWS – The Corporation Tax Bill (Northern Ireland)

The Corporation Tax (Northern Ireland) Bill was published on 8th January 2015. The British Government hopes the Bill will be passed before the UK General Election in May.

The Bill, if passed, would allow Northern Ireland to apply its new Corporation Tax rate on most trading profits from April 2015.

The current rate paid by companies in Northern Ireland is 21% while the rate in the Republic of Ireland is 12½%.

According to the UK Government Press Release “if the rate was lowered, around 34,000 businesses in Northern Ireland would stand to benefit including 26,500 SMEs.” Read more

Tax Season Opens As Planned Following Extenders Legislation

Following the passage of the extenders legislation, the Internal Revenue Service announced it anticipates opening the 2015 filing season as scheduled in January.

The IRS will begin accepting tax returns electronically on Jan. 20. Paper tax returns will begin processing at the same time.

The decision follows Congress renewing a number of “extender” provisions of the tax law that expired at the end of 2013. These provisions were renewed by Congress through the end of 2014. The final legislation was signed into law December 19, 2014. See our post entitled Two Weeks To Benefit from the Recently Passed Tax Extenders Bill! Read more

New Developments (As of December 23, 2014)

Recently, there have been several important IRS and court opinions affecting various areas of taxation.

A. Distribution of benefits to estate beneficiaries.

An executor was aware that the estate would owe significant taxes but instead of distributing the assets to the beneficiaries, he had the estate distribute money to himself and other heirs. As a result, the estate did not have enough funds to pay the taxes. The IRS put a lien against other property owned by the executor. The executor appealed the IRS decision to a Pennsylvania District court. The court upheld the IRS decision stating that the executor is personally liable for depleting the assets of the estate [Stiles, D.C., PA]. Read more

Tax Extenders, Tax Extenders…. Check If You Won The Extender Lottery!!

Well, it is December 30th, 2014 and as I sit down to write up the last blog post of the year, I realize how much I have enjoyed writing this year! This blog has brought a lot of traffic my way, I have gained a few clients, engaged in some very interesting conversations with fellow professionals and learned a lot about the roller-coaster social media world! Thanks to my readers from the bottom of my heart!

The conversations around tax planning sessions these days has been how quickly can we file in the coming tax season (hopefully on time!) and of course the hype around the Tax Extenders Bill that Congress passed early this month and President Obama signed soon after. So what was the drama all about? Read more

Two Weeks To Benefit from the Recently Passed Tax Extenders Bill!

This past Friday, December 19, 2014, President Obama signed into law the Tax Increase Prevention Act of 2014 (HR 5771) which passed the the Senate on December 16th, 2014, that retroactively extended certain tax incentives which had expired on December 31, 2013 for one year.

Individual Tax Extenders:

– Research and experimentation credit;
– 50% first-year bonus depreciation;
– Increased expensing limits ($500,000/$2 million) for section 179 property;
– 15-year depreciation life for qualified leasehold improvements, qualified restaurant Read more

Tax Extenders Legislation Becomes Law

On Friday, December 19th, President Obama signed the tax extenders legislation into law that retroactively extends for one year the bulk of the temporary tax incentives that expired on December 31, 2013. The Tax Increase Prevention Act of 2014 (hereinafter “TIPA”) was approved on a bipartisan basis in the House of Representatives on December 3rd and the Senate on December 16th. Its passage and enactment mark the last significant action in connection to tax policy in the 113th Congress, which has now officially adjourned as the 114th Congress convenes on January 6, 2015. However, the tax extenders package is short-lived as the retroactive renewal of approximately 60 temporary provisions sunsets on December 31, 2014. For taxpayers who rely on these provisions for planning purposes, this means a return to uncertainty in just a few weeks as calendar year 2014 comes to a close. Read more

Congress Passes $42 Billion Tax Extenders Package: The Primary Tax Extenders Affecting The Real Estate Industry

On Tuesday, December 16th the U.S. Senate passed H.R. 5771 by a 76 to 16 vote reviving dozens of previously expired tax breaks for calendar year 2014 only.

Republicans and Democrats compromised on the one-year extension after the White House undercut negotiations on a broader bipartisan package, underscoring divisions between Democrats in the wake of this year’s heavy losses at the election polls this past November. Senators from both parties indicated that they would have preferred legislation that would have restored the tax extenders through calendar year 2015 (e.g., a 2 year extension package that would have retroactively reinstated the tax extenders for calendar year 2014 and forward through all of calendar year 2015). The bill is now awaiting President Obama’s signature in order for the bill to become law. It is highly anticipated that the President will Read more