November 2013

November 27, 2013

Final and Proposed Regs. Issued on 3.8% Net Investment Income Tax

The IRS issued final and proposed regulations giving guidance on the application and computation of the 3.8% net investment income tax imposed by Sec. 1411.

November 27, 2013

Final Rules Released on 0.9% Medicare Surtax

The IRS issued final regulations governing the 0.9% Medicare surtax. The regulations contain guidance for employers and individuals on the implementation of the tax.

November 26, 2013

IRS Proposes Curbing Political Activities of Sec. 501(c)(4) Social Welfare Organizations

The IRS announced its intention on Tuesday to amend the regulations governing social welfare organizations, a topic that has recently created an enormous amount of political controversy.

November 21, 2013

TIGTA Report Says IRS Should Do a Better Job Protecting Taxpayer Data

The IRS does not do a good job of correcting security weaknesses, thereby failing to protect taxpayer data, TIGTA concluded in a report released Thursday.

November 19, 2013

Accounting for Income Taxes Standard Achieves Purpose, Panel Finds

A review panel has concluded FAS 109, addressing accounting for income taxes, generally achieves its purpose but may not have reduced complexity.

November 19, 2013

For Penalty Calculation, Amount of Tax Shown on Return Reduced by Credits, Tax Court Holds

The Tax Court held that the amount of tax shown on the taxpayers’ return was reduced by refundable credits, but not below zero, for purposes of calculating the Sec. 6662(a) accuracy-related penalty.

November 14, 2013

United States and France Sign FATCA Agreement

The Treasury Department announced on Thursday that the United States and France have signed a bilateral agreement requiring French banks to report to the French government information about their U.S. account holders.

November 14, 2013

Regs. Permit Midyear Changes to Employer Contributions 401(k) Plans

The IRS issued final regulations that permit employers to make midyear reductions or suspensions of safe-harbor matching or nonelective contributions to retirement plans in certain situations.

November 12, 2013

Tax Return Preparers Suspected of Filing Inaccurate EITC Claims to Be Targeted by IRS

The IRS announced in an email to tax practitioners that it will send letters in November and December to return preparers “suspected of filing inaccurate EITC claims.”

November 8, 2013

Permanent Injunction Closes Large Tax Preparation Firm

A federal district court in Ohio has issued a permanent injunction ordering ITS Financial LLC, the parent company of Instant Tax Service tax franchiser, to cease operations.

November 6, 2013

IRS Extends Fast-Track Settlement to Smaller Businesses Nationwide

Formerly available only to large and midsize businesses and in a geographically limited pilot program for smaller entities, the IRS’s Fast Track Settlement program is now available to smaller businesses nationwide, the IRS announced.

November 1, 2013

Health FSA Use-It-Or-Lose-It Rule Modified to Allow a $500 Carryover

The IRS will now permit companies to amend their cafeteria plans to allow participants in health FSAs who do not use all of the money in a plan year to use up to $500 in the next plan year, in addition to the regular $2,500 limit during the succeeding year.