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Tag Archive for Washington D.C.

Many Tax-Exempt Organizations Must File Information Returns By May 15, 2018

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

Do Not Include Social Security Numbers Or Personal Data

WASHINGTON — The Internal Revenue Service reminded certain tax-exempt organizations that the Tuesday, May 15 filing deadline for Form 990-series information returns is fast approaching.

Form 990-series information returns and notices are normally due on the 15th day of the fifth month after an organization’s tax-year ends. Many organizations use the calendar year as their tax year, making May 15, 2018 the deadline to file for 2017.

No Social Security Numbers On Forms 990 Read more

Taxpayer Advocate Service Survey Confirms Need To Maintain And Enhance A Robust Omni-Channel Taxpayer Service Strategy

Nina Olson, National Taxpayer Advocate, Tax Blog, Washington D.C., USA, TaxConnections

In my most recent Annual Report to Congress, I published a study in support of the Service Priorities Project (SPP), a joint effort between Taxpayer Advocate Service (TAS) and IRS Wage & Investment (W&I). The goal of the SPP is to produce a matrix to help the IRS identify where to allocate its taxpayer service resources. To assist the IRS in determining service priorities, the matrix presents data on taxpayer needs and preferences as well as more traditional IRS “efficiency” concerns. While W&I initially worked with TAS in the development of the SPP, ultimately I felt that the additions to the Taxpayer Experience Survey did not address the missing data needed to complete the SPP matrix. I directed TAS Research to develop a study and fill in the gaps of the SPP. The result, A Further Exploration of Taxpayers’ Varying Abilities and Attitudes Toward IRS Options for Fulfilling Common Taxpayer Needs, revealed several areas that I’d like to highlight today. Read more

Seasonal, Part-Year Workers Urged To Check Tax Withholding Amount

Tom Kerester, Tax Blog, Tax Ambassador, Washington D.C., USA, TaxConnections

WASHINGTON – The Internal Revenue Service today encouraged taxpayers who work seasonal jobs or are employed part of the year to visit the Withholding Calculator and perform a “paycheck checkup.”

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, eliminating personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. These changes do not affect 2017 tax returns due earlier this year, but they will affect 2018 tax returns filed next year. Read more

Tax Credit Can Help Employers Hiring New Workers; Key Certification Requirement Applies

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other categories of workers with employment barriers.

During National Small Business Week — April 29 to May 5 — the Internal Revenue Service highlighted tax benefits and resources designed to help new and existing small businesses. Read more

New IRS Online Tool Offers Expanded Access To Information On Tax-Exempt Organizations

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — The Internal Revenue Service today introduced a new online tool on IRS.gov designed to provide faster, easier access to publicly available information about exempt organizations.

“This new tool provides taxpayers an easy way to get information about charitable organizations,” said Acting IRS Commissioner David Kautter. “Tax-exempt organizations play a critical role in our nation, and this will provide greater insight for people considering donations.” Read more

Corporate Executive Compensation Compliance: Fringe Benefits (Part V)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C, USA, TaxConnections

Issue Description

Corporate executives often receive extraordinary fringe benefits that are not provided to other corporate employees. Any property or service that an executive receives in lieu of or in addition to regular taxable wages is a fringe benefit that may be subject to taxation. In 1984, the Internal Revenue Code (“Code”) was amended to include the term “fringe benefits” i n the definition of gross income found in §61. A fringe benefit provided in connection with the performance of services, regardless of its form, must be treated as compensation includible in income under §61.

Whether a particular fringe benefit is taxable depends on whether there is a specific statutory exclusion that applies to the benefit. For example, when §61 was amended to include the term “fringe benefits”, §132 was added to provide exclusions for certain commonly provided fringe benefits that had previously not been addressed in the Code. Read more

Corporate Executive Compensation Compliance: Audit Techniques Guide (Part IV)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

Every publicly held corporation maintains its executive compensation records differently. Likewise, every publicly held corporation maintains different methods for compensating its executives. As the examining agent, you must first learn the identity of the individual(s) within the corporation who are most familiar with how the executive compensation records are maintained. You will need to have a general discussion with that person regarding the record maintenance and retention practices of the corporation with regard to executive compensation. This discussion will help you narrow the focus of your IDRs and will also familiarize you with in-house terminology that is utilized by the corporation when discussing and researching records concerning executive compensation. Read more

IRS Urges Small Businesses: Protect IT Systems From Identity Theft

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON – The IRS, state tax agencies and the nation’s tax industry are warning small businesses to be on-guard against a growing wave of identity theft attempts against employers.

Small business identity theft is big business for identity thieves. When businesses and their employees have their identities stolen, their sensitive information can be used to open credit card accounts or file fraudulent tax returns for bogus refunds. Read more

Corporate Executive Compensation Compliance: General Audit Steps (Part III)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

General Audit Steps

I. Examining Constructive Receipt and Economic Benefit Issues

Issues involving constructive receipt and economic benefit generally will present themselves in the administration of the plan, in actual plan documents, employment agreements, deferral election forms, or other communications (written or oral and formal or informal) between the employer and the employee. The issues may also be present in related insurance policies and annuity arrangements. Ask the following questions and request documentary substantiation where appropriate:

  • Does the employer maintain any qualified retirement plans?
  • Does the employer have any plans, agreements, or arrangements for employees that supplement or replace lost or restricted qualified retirement benefits?

Read more

Corporate Executive Compensation Compliance: Focus (Part II)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

Compliance Focus

I. When are deferred amounts includible in an employee’s gross income?

a. Constructive Receipt Doctrine — Unfunded Plans Cash basis taxpayers must include gains, profits, and income in gross income for the taxable year in which they are actually or constructively received. Under the constructive receipt doctrine [codified in IRC § 451(a)], income although not actually in the taxpayer’s possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it during the taxable year if notice of intention to withdraw had been given. However, income is not constructively received if the taxpayer’s control of its receipt is subject to substantial limitations or restrictions. See § 1.451-2(a) of the regulations. Read more

Corporate Executive Compensation Compliance: Unfunded Vs. Funded (Part I)

A nonqualified deferred compensation (NQDC) plan is an elective or non-elective plan, agreement, method, or arrangement between an employer and an employee (or service recipient and service provider) to pay the employee or independent contractor compensation in the future. In comparison with qualified plans, NQDC plans do not provide employers and employees with the tax benefits associated with qualified plans because NQDC plans do not satisfy all of the requirements of IRC § 401(a).

Under a nonqualified plan, employers generally only deduct expenses when income is recognized by the employee or service provider.  In contrast, under a qualified plan, employers are entitled to deduct expenses in the year contributions are made even though employees will not recognize income until the later years upon receipt of distributions. Read more

Effective Use Of The Offer In Compromise (OIC) Program Will Save Valuable IRS Resources While Bringing Finality To Taxpayers

Nina Olson, Washington D.C., USA, TaxConnections

When a taxpayer can’t afford to pay a tax liability in full, Internal Revenue Code (IRC) § 7122 authorizes the IRS to accept less than the full amount due in the form of an offer in compromise (OIC). As a condition of acceptance for an OIC, the taxpayer must agree to remain compliant with his or her filing and paying requirements for the five years following the acceptance of the OIC. So, although the IRS agrees to settle a tax debt for less than the full amount due, the IRS secures future filing and payment compliance for the next five years, hopefully developing better taxpayer habits, while also collecting an amount that it is unlikely to collect otherwise. On the other hand, the taxpayer is no longer saddled with a debt that cannot be satisfied in full. Read more

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