TaxConnections

 
 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search

Tag Archive for IRS

IRS Warns Taxpayers And Tax Professionals: National Tax Security Awareness Week

IRS Warns Taxpayers And Tax Professionals: National Tax Security Awareness Week

The Internal Revenue Service and the Security Summit partners  issued warnings to all taxpayers and tax professionals to beware of scams and identity theft schemes by criminals taking advantage of the combination of holiday shopping, the approaching tax season and coronavirus concerns.

The IRS, state tax agencies and the tax industry opened the National Tax Security Awareness Week to coincide with Cyber Monday, the traditional start of the online holiday shopping season. But the holiday shopping season combined with the impending tax season and an increased trend toward working remotely make online security an absolute necessity.

Read more

Tax Exempt Organization Search Helps You Find Information About Tax-Exempt Organizations Federal Tax Status And Filings

Tax Exempt Organization Search

Tax Exempt Organization Search helps users find information about a tax-exempt organization’s federal tax status and filings. You can find:

  • Organizations eligible to receive tax-deductible charitable contributions (Pub 78 data).
    • Users may rely on this list in determining deductibility of their contributions. (Users may also download a complete list.) Data posting date: 08-11-2020
    • Be aware of the following when searching for organizations that can receive tax-deductible contributions:
      1. Certain eligible donees (i.e., churches, group ruling subordinates, and governmental units) may not be listed. See Other Eligible Donees for more information.
      2. “Doing business as” (also known as DBA) names of organizations are not listed. See Search Tips for additional guidance.
  • Automatically revoked organizations
    Read more

IRS Offers New Stricter Settlement For Micro-Captive Insurance Schemes; Offer Letters Being Mailed To Groups Under Audit

IRS Offers New Stricter Settlement For Micro-Captive Insurance Schemes; Offer Letters Being Mailed To Groups Under Audit

The Internal Revenue Service announced today a second time-limited settlement initiative for certain taxpayers under audit who participated in abusive micro-captive insurance transactions.

In the coming days, the IRS will begin sending settlement offers with terms that are stricter than the IRS’s first time-limited initiative started last year. This announcement occurs after the IRS recently deployed its 12 newly formed micro-captive examination teams to substantially increase the examinations of abusive micro-captive insurance transactions.

The IRS has decided to offer to resolve certain cases by requiring substantial concession of the income tax benefits claimed by the taxpayer together with penalties that can be partly mitigated if the taxpayer can demonstrate good faith, reasonable reliance on an independent, competent tax advisor and if the taxpayer can demonstrate it did not participate in any other reportable transactions.

Read more

IRS Rules On Closing A Partnership

IRS Rules On Closing A Partnership

partnership is a relationship between two or more partners to do a trade or business. Each person contributes money, property, labor or skill and shares in the profits and losses of the business.

Partners who want to close their partnership must take certain actions whether they’ve been in business a few months or many years. They must file final forms and schedules. Here’s information on typical final forms and schedules that a partnership needs to file when ceasing operations.

Read more

IRS Provides Guidance On Base Erosion And Anti-Abuse Tax

IRS On Base Erosion And Anti-Abuse Tax

The Internal Revenue Service issued final regulations  PDF providing additional guidance on the base erosion and anti-abuse tax (BEAT).

To limit profit-shifting, the Tax Cuts and Jobs Act (TCJA) added a new tax, the BEAT. The BEAT focuses on large U.S. corporations that make deductible payments to related foreign parties.

The final regulations provide detailed guidance regarding how to compute certain BEAT calculations for groups of related taxpayers. The final regulations also contain rules permitting taxpayers to waive deductions for purposes of the BEAT, and additional guidance regarding partnerships and anti-abuse rules.

Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.

IR-2020-200

IRS Finalizes Regulations For 100 Percent Bonus Depreciation

IRS Finalizes Regulations For 100 Percent Bonus Depreciation

The Treasury Department and the Internal Revenue Service today released the last set of final regulations PDF implementing the 100% additional first year depreciation deduction that allows businesses to write off the cost of most depreciable business assets in the year they are placed in service by the business.

The 100% additional first year depreciation deduction was created in 2017 by the Tax Cuts and Jobs Act and generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify.

The deduction applies to qualifying property (including used property) acquired and placed in service after September 27, 2017. The final regulations provide clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property.

Read more

IRS Reminds Taxpayers Of The Home Office Deduction Rules

IRS Reminds Taxpayers Of The Home Office Deduction Rules

During Small Business Week, September 22-24, the Internal Revenue Service wants individuals to consider taking the home office deduction if they qualify. The benefit may allow taxpayers working from home to deduct certain expenses on their tax return.

The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy. However, the Tax Cuts and Jobs Act suspended the business use of home deduction from 2018 through 2025 for employees. Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home.

Qualifying For A Deduction

Read more

Penalties For Not Turning Trust Fund Taxes Over To The IRS

Penalties For Not Turning Trust Fund Taxes Over To The IRS

When you pay your employees, you are not paying them all of the money they earned. Instead, you are responsible for withholding part of their income for taxes. These can include income taxes and FICA (Social Security and Medicare).

Your employees trust that this money – referred to as trust fund taxes – goes to the treasury to pay their portion of taxes, and not to the company’s accounts.

But what happens if your business doesn’t submit this money to the treasury? Keeping this money can result in penalties from the IRS.

Learn what these penalties are and how you and your attorney can work the federal agency’s Special Agents to try to get the assessments reduced.

Key Insights We Will Discuss:
Possible penalties for not turning trust fund taxes over to the IRS.
Who are IRS Special Agents?
How a tax attorney can help you negotiate with Special Agents.
Read more

Here’s What Taxpayers Need To Know About The Home Office Deduction

Here’s What Taxpayers Need To Know About The Home Office Deduction

The home office deduction allows qualifying taxpayers to deduct certain home expenses on their tax return. With more people working from home than ever before, some taxpayers may be wondering if they can claim a home office deduction when they file their 2020 tax return next year.

Here are some things to help taxpayers understand the home office deduction and whether they can claim it:

• Employees are not eligible to claim the home office deduction.
• The home office deduction Form 8829 is available to both homeowners and renters.
• There are certain expenses taxpayers can deduct. They include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent.
• Taxpayers must meet specific requirements to claim home expenses as a deduction. Even then, the deductible amount of these types of expenses may be limited.
• The term “home” for purposes of this deduction:
Read more

Know The IRS Collection Statue Expiration Date

Keith Jones:The IRS Collection Statue Expiration Date

IRS Collection Statue Expiration Date (CSED)
“It is a basic concept of law that once a statute of limitation has passed, no action barred by the statute may take place.”

–Procedurally Taxing

The IRS collections statute expiration date (CSED) is the date after which the IRS can no longer collect a tax debt.

When things are simple, the CSED is easily calculated as 10 years from the date of assessment.

This means that no matter how little the IRS has been able to collect on a tax debt assessed in April of 2007, they must cease collection on that debt in April of 2017.

However, when you’re working with the IRS, things are rarely as simple as you’d like. There are a handful of events that can result in extending the CSED date (sometimes called “tolling events”).
Read more

IRS Reminds Businesses Filing Cash Transactions

IRS Reminds Businesses Filing Cash Transactions

IRS reminds businesses filing cash transaction reports about e-file option; batch filing now available

The Internal Revenue Service reminds businesses required to file reports of large cash transactions that e-filing is a fast, easy and secure option for filing their reports. Now, businesses can batch file their reports, which is especially helpful to those required to file many forms.

Although businesses have the option of filing Form 8300, Report of Cash Payments Over $10,000, on paper, many have already found the free and secure e-filing system is a more convenient and cost-effective way to meet the reporting deadline. The form is due 15 days after a transaction and there’s no charge for the e-file option.

Although many cash transactions are legitimate, information reported on this form can help stop those who evade taxes, profit from the drug trade, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through the payments reported on Form 8300 and other cash reporting forms.
Businesses that file Form 8300 electronically get free, automatic acknowledgment of receipt when they file. In addition, electronic filing is more accurate, reducing the need for follow-up correspondence with the IRS.
Read more

Working Virtually: Protect Tax Data At Home And At Work

Working Virtually: Protect Tax Data At Home And At Work

With cyberthieves active during COVID-19, the Internal Revenue Service and the Security Summit partners today urged tax professionals to review critical security steps to ensure they are fully protecting client data whether working in the office or a remote location.

Many tax professionals have expanded telework options this year as firms, like other businesses, work to keep personnel safe, practice recommended safety guidelines and use technology to virtually serve their clients.

During this period, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) have urged organizations to maintain a heightened state of alert as cybercriminals seek to exploit Covid-19 concerns.

To assist tax professionals with the security basics, the IRS, state tax agencies and nation’s tax industry are launching a five-part series called Working Virtually: Protecting Tax Data at Home and at Work. The special series is designed to help practitioners assess their home and office data security. The first recommendation today covers the “Security Six” – basic steps that should be taken for every work location. The series will continue each Tuesday through August 18.

“The Security Summit partners urge tax professionals to take time this summer to give their data safeguards a thorough review and ensure that these protections are in place whether they work from home or the office,” said IRS Commissioner Chuck Rettig.
Read more