Tag Archive for Internal Revenue Service

Oh Thank Heaven For The IRS!

Barry Fowler

I remember the old jingle for 7-Eleven that sang “Oh thank heaven for 7-Eleven!” Well, now we can add the tax collecting IRS to that jingle. Oh, thank heaven for 7-Eleven and the IRS!

Believe it or not, you can now pay your taxes at that convenience store in 34 states. And, you can even make those payments in cash!

According to a recent announcement from the IRS, “Individual Read more

The Service Issues New Administrative Authority Governing Tangible Property Regulations Compliance

On November 20, 2015, the Internal Revenue Service (hereinafter the “Service”) issued new administrative authority governing the Tangible Property Regulations (hereinafter “TPR”) in connection to the safe harbor rules for the retail and restaurant industries. More specifically, the newly released Revenue Procedure 2015-56 (hereinafter “Rev. Proc. 2015-56) provides a safe harbor method of accounting for taxpayers engaged in the trade or business of operating either a retail establishment or a restaurant for purposes of determining whether expenditures paid or incurred to remodel or refresh a qualified building are:

• Deductible pursuant to I.R.C. § 162(a);

• Requires capitalization treatment as an improvement pursuant to I.R.C. § 263(a); or Read more

The Service Issues New Draft Version of Form 3115

The Internal Revenue Service (hereinafter the “Service”) issued on July 15th of 2015 their long awaited draft version of their revised Form 3115 entitled “Application for Change in Accounting Method” which incorporates revisions to the process for requesting accounting method changes (e.g., accounting method changes in complying with the Final Treasury Regulations governing Tangible Property; accounting method changes in connection to depreciation adjustments resulting from Cost Segregation Analysis; etc.). The draft version of Form 3115 can be accessed at–dft.pdf

Once finalized, the latest form will replace the current version, which was previously issued in 2009. The Service requests that comments on the draft Form 3115 be made on Read more

It Is Extremely Dangerous Not To Be Proactive In Tax – Learn Why From An International Tax Attorney

iStock_000020558994XSmall(This Is Part Of A 7 Series Special Report)

This special report is based on over 120 lectures presented by International Tax Attorney and Professor Daniel Erasmus on multinational corporations (MNEs) and smaller businesses (SMEs) looking to minimize one of the largest financial risks facing them: tax.

The case studies in this special report are very real and based on years of experience. The names, places, and specific details are not, so as to preserve the secrecy of the taxpayers.

One thing this special report will do for you is teach and guide you, step by step, that in matters of tax it is extremely dangerous not to be proactive. No matter what anyone says, tax is always and will always remain a large expense for any successful business. States will always look to their most successful taxpayers to collect 80% of the tax from the 20% most successful taxpayers. It makes commercial sense. The balance of tax officials’ time will most probably be spent chasing after tax criminals, those who are blatant tax evaders and offenders. For you, who are reading this special report, I doubt you fall into this latter category; otherwise you would only have grabbed this special report if its title read How to Evade Tax, Legally! Read more

The Taxgirl And The Lerner Rule

iStock_Hand On BibleXSmallAs Second IRS Official Pleads The Fifth, Congress Pushes For “Lerner Rule”.

Greg Roseman, a Deputy Director at the Internal Revenue Service, didn’t make any friends on the Hill last month when he refused to testify at a House Oversight Committee hearing. It was the second time in recent memory that an Internal Revenue Service employee had invoked a Fifth Amendment right not to testify.

Roseman follows hot on the heels of Lois Lerner’s invocation of the Fifth Amendment a month earlier in the wake of the IRS tax exempt scandal. Roseman, like Lerner, is still employed by the IRS. It’s important to note, however, that Roseman’s testimony was solicited as part of an ongoing investigation about his relationship with a contractor who won big dollar federal contracts. The testimony was not related to the tax exempt scandal – though the timing is close enough that it has cast a dark shadow over the already beleaguered agency.

Kelly Erb, as The Taxgirl, has published a blog speaking about the “Lerner Rule” which would handle federal employees testifying before a congressional hearing.The bill, H.R. 2458, has been referred to the House Committee on Oversight and Government Reform. The text of the bill is pretty short and to the point. It says: Read more

Tax-Exempt Bonds and Small Business Health Care Tax Credit Take a Hit from Sequester

The Internal Revenue Service said that budget sequestration would require reductions in refundable credits for certain tax-exempt bonds and the refundable portion of the Small Business Health Care Tax Credit for some small tax-exempt employers, along with whistle-blower awards.

In a pair of emails Monday, the IRS noted that pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic cuts will take place as of March 1, 2013. The 1985 law, better known as the Gramm-Rudman-Hollings Act, provided the original basis for the budget sequestration process that was revived in 2011 as part of the Budget Control Act.

Under the provisions of the 2011 law, which aimed to curb the budget deficit, Congress and the Obama administration set a goal of identifying $1.5 trillion in deficit reduction measures, or else $1.2 trillion in automatic spending cuts over 10 years across most government agencies would begin in 2013. After numerous meetings and reports, and the efforts of the Simpson-Bowles Commission and a congressional “super committee,” Democrats and Republicans were unable to reach an agreement, and $85 billion in automatic spending cuts began to take effect on March 1.

In an email to the tax-exempt bond community, the IRS noted that Form 8038-CP claims for certain qualified tax-exempt bonds are subject to the sequester. The required reductions include a reduction to refundable credits under Section 6431 of the Tax Code applicable to certain qualified bonds. The sequester reduction is applied to Section 6431 amounts claimed by an issuer on any Form 8038-CP filed with the IRS that results in a payment to the issuer on or after March 1, 2013. The sequestration reduction rate will be applied until the end of the fiscal year (Sept. 30, 2013) unless there is some intervening congressional action, at which time the sequestration rate would be subject to change.

The reductions apply to Build America Bonds, Qualified School Construction Bonds, Qualified Zone Academy Bonds, New Clean Renewable Energy Bonds and Qualified Energy Conservation Bonds for which the issuer elected to receive a direct credit subsidy pursuant to Section 6431. As determined by the Office of Management and Budget, payments to issuers from the budget accounts associated with these qualified bonds are subject to a reduction of 8.7 percent of the amount budgeted for such payments. 

The sequester is also set to affect the Small Business Health Care Tax Credit which was included as part of the Patient Protection and Affordable Care Act of 2010, the Obama administration’s signature health care reform law. The IRS noted in an email to tax-exempt organizations that the required cuts under sequestration include a reduction to the refundable portion of the Small Business Health Care Tax Credit for certain small tax-exempt employers under Section 45R of the Tax Code. As a result, the refundable portion of the claim will be reduced by 8.7 percent. The sequestration reduction rate will be applied until the end of the fiscal year (Sept. 30, 2013) unless there is some intervening congressional action, at which time the sequestration rate is subject to change.

Separately, the IRS also said Tuesday it was reducing whistle-blower payment awards by 8.7 percent because of sequestration, unless Congress intervenes. Last week, IRS Acting Commissioner Steven T. Miller informed IRS employees that sequestration might also require unpaid furloughs of five to seven days starting this summer, after tax season is over. Along with the reductions in employee pay, Miller also warned of other budget cuts at the agency, which has already seen its budget cut in the past two fiscal years. Miller wrote: “If sequestration occurs, we will continue to operate under a hiring freeze, reduce funding for grants and other expenditures, and cut costs in areas such as travel, training, facilities and supplies. In addition, we will need to review contract spending to ensure only the most critical and mandatory requirements are fully funded.”

By Michael Cohn, Washington D.C. March 5, 2013

Edited and posted by Harold Goedde CPA, CMA, Ph.D. (taxation and accounting)

CIRCULAR 230 DISCLOSURE:  Pursuant to regulations governing practice before the IRS, any tax  advice contained herein is not intended or written to be used and cannot be used by the taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.