October 2011

October 31, 2011

Regs. Extend Religious and Family Member FICA, FUTA Exceptions to Disregarded Entities

Temporary and proposed regulations extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.

October 28, 2011

IRS Gives Penalty Relief, Delays Backup Withholding for Payment Card Reporting

The IRS postponed for a year the effective date of the backup withholding requirement for payments in settlement of payment card and third-party network transactions.

October 28, 2011

AICPA Expresses Concerns and Requests Review of Procedure Regarding Release of PTIN Holder Information

The AICPA’s Tax team has had, and continues to have, numerous conversations with IRS regarding its recent release of PTIN holder information.

October 27, 2011

House Passes Repeal of 3% Withholding on Government Contracts

The House of Representatives passed a bill October 27 to repeal a law that beginning in 2013 requires tax withholding of 3% of payments to vendors and contractors providing services to federal, state and local governments and their agencies.

October 25, 2011

Final Regs Clarify Excise, Employment Tax Treatment of Disregarded Entities

The IRS issued final regulations clarifying the treatment of disregarded entities with respect to employment and certain excise taxes.

October 24, 2011

IRS Proposes Eliminating De Minimis Partner Rule

The IRS issued proposed regulations on October 24 that, if finalized, would remove the de minimis partner rule in Regs. Sec. 1.704-1(b)(2)(iii)(e) (REG-109564-10).

October 21, 2011

President Signs Bill Increasing EITC Due Diligence Penalty

President Barack Obama signed into law a bill that increases from $100 to $500 the penalty for failure by preparers to exercise due diligence with respect to the EITC.

October 20, 2011

Inflation Adjustments Made to Many Tax Items for 2012

The IRS released its annual revenue procedure making inflation adjustments to the income tax tables and many tax credits and other items for tax years beginning in 2012.

October 20, 2011

PTIN System Opens for 2012 Renewals

The IRS on October 20 announced that it has opened its preparer tax identification number (PTIN) registration system to accept renewals for the 2012 filing season

October 19, 2011

Final Regs. Eliminate Hot Stock Rule for Certain Reorganizations

The IRS issued final regulations that generally hold that the so-called hot stock rule is inapplicable in reorganizations where a subsidiary is a member of the distributing corporation’s separate affiliated group

October 14, 2011

Estate Tax Protective Claim Procedures Detailed

The IRS issued guidance on filing a protective claim for refund of estate tax and notifying the IRS that the claim is ready for consideration.

October 13, 2011

Trade Bills Pass Congress with Tax Provisions

The EITC due diligence penalty will increase to $500 under a bill passed by Congress Oct. 12.

October 12, 2011

TIGTA Finds Problems with IRS Purchase Cards, Network Security

TIGTA released a pair of reports finding problems with the security of the IRS Windows environment and a lack of control over IRS purchase cards.

October 7, 2011

Practitioners Raise Concerns About Fingerprinting Proposal at IRS Hearing

The IRS heard a consistent chorus at an October 7 hearing on proposed fees for fingerprinting of registered tax return preparers and nonsigning staff at CPA firms: The IRS’ proposal is duplicative, expensive, and can be done in a better way.

October 6, 2011

IRS Proposes Stiffer Preparer Requirements for EITCs

The IRS issued proposed regulations that would impose new requirements for tax return preparers and their firms for returns claiming the earned income tax credit (EITC), including submission of information regarding taxpayers’ eligibility to the IRS.