Refundable credit payments processed on or after Oct. 1, 2013, and on or before Sept. 30, 2014, will be reduced by a sequestration rate of 7.2% for issuers of various bonds that elected to receive a direct credit subsidy under Sec. 6431.
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TOPICS / PROCEDURE
Tax Planning; Tax Minimization
Change in “Responsible Party” Must Be Reported to the IRS
The IRS in May 2013 issued final regulations requiring any person assigned an employer identification number to provide updated responsible-party information to the IRS.
Top Tax News Developments in 2013
The past year featured a large number of tax developments, some of which got extensive coverage in the media, and many of which got less coverage but affect almost all taxpayers and practitioners. As we get ready to welcome a new year, here’s a look back at the most important
Final Rules Permit Agents to Withhold FUTA for Home Care Service Recipients
The IRS issued final regulations permitting an agent authorized by the IRS under Sec. 3504 to perform certain acts normally required of employers to withhold FUTA taxes owed by home care service recipients.
Six-Year Statute of Limitation for Substantial Omissions of Income
The IRS has indicated that an estimated amount of flowthrough S corporation K-1 income did not constitute proper disclosure and therefore the taxpayer’s return was subject to an extended six-year statute of limitation due to a substantial omission of income.
Post-Windsor FICA Refund Procedures
The IRS announced procedures employers should follow for filing refund claims for overpaid FICA and income taxes paid on employer-provided benefits for same-sex spouses that, because of the Windsor decision, are now tax free.
Heightened Emphasis on Worker Classification
Worker classification has been a major concern for many years. While it is clear that government agencies recognize that worker misclassification is a significant problem, how to classify workers remains unclear.
Social Security Wage Base Rises to $117,000 for 2014
The Social Security Administration announced that the wage base above which taxes for old age, survivors, and disability insurance (OASDI) are not due will increase from $113,700 to $117,000 in 2014.
Government Shutdown, Debt Ceiling Deal Includes One Tax Provision
Wednesday’s deal to fund the federal government through Jan. 15 and to extend the federal government’s borrowing authority through Feb. 7 in the end contained only one tax provision, making a minor change to 2010’s health care legislation.
Streamlined Procedures for Post-Windsor FICA Refunds Are Released
The IRS announced the procedures employers should follow for filing refund claims for overpaid FICA and income taxes paid on employer-provided benefits for same-sex spouses that, because of the Supreme Court’s Windsor decision, are now tax free.
Regulations Clarify Treatment of a Debt Instrument Under Straddle Rules
The IRS issued regulations to clarify the treatment of debt instruments that are part of a straddle.
Broker Basis Reporting of Debt Instruments and Options: Actions Holders or Issuers Must (or May Want to) Take
Buried in the regulations are optional or necessary actions to be taken in certain circumstances by holders of debt instruments, issuers of debt instruments subsequently registered with the SEC, and securities issuers that undertake organizational actions affecting the basis of specified securities.
Proposed Rules Reset Limitation for Pursuing Equitable Innocent Spouse Relief
The IRS issued proposed regulations under Secs. 6015(f) and 66(c) changing the deadline for taxpayers to request innocent spouse relief from joint liability.
IRS Releases Draft Net Investment Income Tax Form
The IRS released a draft of Form 8960, a new dual-purpose form that will be used by individuals and trusts and estates to compute the new 3.8% net investment income tax.
Comments Requested on Proposed Net Investment Income Tax Form
The IRS published a notice and request for comments from taxpayers on a new dual-purpose form that will be used by individuals and trusts and estates to compute the new 3.8% tax and then to report the tax.
Suspension of Tangible Property Capitalization Issue Examinations Extended
The IRS posted an updated directive for field examinations on the repair vs. capitalization issue that extends the suspension of examinations.
Statute of Limitation Tolled by Fraudulent Tax Returns
The Second Circuit held that the filing of fraudulent tax returns for a corporation by an accountant to embezzle money that was owed to the IRS was an intentional evasion of taxes that tolled the statute of limitation on assessment.
AICPA Makes Tax Reform Recommendations to Ways and Means Committee Working Groups
The AICPA submitted recommendations for tax reform to five of the 11 working groups the House Ways and Means Committee has formed.
Witnesses Tell Senate Finance Committee Ways to Improve Tax System
Witnesses gave the Senate Finance Committee a variety of suggestions on how to fight tax identity theft and fraud, reform the tax system, and fund the IRS during a hearing on Tuesday.
IRS Extends Suspension of Examinations of Tangible Property Capitalization Issues
The IRS posted an updated LB&I Directive for field examinations on the repair vs. capitalization issue that extends the suspension of examinations
TAX PRACTICE MANAGEMENT
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