Blogs

IRS provides various payment options for taxpayers who owe but can’t pay in full

By James Crawford
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The IRS has just released information that tax preparers and accountants can share with their clients regarding tax payment options. Read more below. As the 2019 tax filing season gets into full swing, the Internal Revenue Service reminds taxpayers who owe of the many easy payment options. The IRS anticipates that most taxpayers will be affected by major tax law changes . While most will get a tax refund, others may find that they owe taxes, many of whom may qualify for a waiver of the estimated tax penalty that normally applies. See Form 2210 , Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for details. “The ...
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Fashion & Finance: Do's and don'ts for new recruits

By Kent Heele
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Fashion is a great way to express your individuality. Throughout your whole life, you will buy clothing items from various brands and try out different styles. Experimenting with different looks is always going to be fun, but that is an activity that you should save for your personal life. If you’re about to start working in finance, you will need to stop thinking of fashion as a way to express your individuality. Instead, you should view it as a business communication tool. Transitioning from college to a job in finance can be pretty tough. Nearly every new recruit will struggle with crafting their professional image. You may feel out of place in the ...
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Be alert to identity theft and W-2 scams

By James Crawford
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During National Tax Security Awareness Week, be sure to take note of this information provided by the IRS. Be sure to share it with your clients, too. IRS, state tax agencies and the nation’s tax industry joined together to warn small businesses to be on-guard against a growing wave of identity theft and W-2 scams. Small business identity theft is big business for identity thieves. Just like individuals, businesses may have their identities stolen and their sensitive information used to open credit card accounts or used to file fraudulent tax returns for bogus refunds. Employers also hold sensitive tax data on employees, such as Form W-2 data, which also ...
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Tax Transcript Email Scam

By James Crawford
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The Internal Revenue Service and Security Summit partners today warned the public of a surge of fraudulent emails impersonating the IRS and using tax transcripts as bait to entice users to open documents containing malware.   The scam is especially problematic for businesses whose employees might open the malware because this malware can spread throughout the network and potentially take months to successfully remove.   This well-known malware, known as Emotet, generally poses as specific banks and financial institutions in its effort to trick people into opening infected documents. The Summit partnership of the IRS, state tax agencies and the ...
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IRSAC Released the 2018 Final Report

By James Crawford
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Today, the IRS Internal Review Service Advisory Council (IRSAC) released their 2018 final report to the Commissioner of Internal Revenue. This annual report contains evaluations of current practices and procedures of the present tax administration, and emerging issues, including recommendations for addressing these issues. Topics included in the report cover a range of subjects, including: The Critical Need to Provide the Internal Revenue Service with Adequate and Reliable Funds; Improving the Free File Program by Increasing IRS Oversight and Restructuring the MOU; Statutory Authority of the IRS to Establish and Enforce Minimum Standards of Competence ...
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IRS Releases Information On Post Tax Reform Blended Tax Rate

By James Crawford
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After tax reform, many corporations will pay blended tax rate Last year’s tax reform legislation replaced the graduated corporate tax structure with a flat 21 percent corporate tax rate. This new maximum tax rate for corporations is effective for tax years beginning after Dec. 31, 2017. A corporation with a fiscal year that includes Jan. 1, 2018, will pay federal income tax using what is called a blended tax rate. They will not use the flat 21 percent tax rate for their entire fiscal year. To calculate their blended tax rate, these corporations will: First calculate their tax for the entire taxable year using the tax rates that were in effect prior ...
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IRS issues final regulations, expanding paid preparer due diligence requirement to head of household filers

By James Crawford
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Just Released: IRS issues final regulations, expanding paid preparer due diligence requirement to head of household filers The Treasury Department and the Internal Revenue Service today issued final regulations expanding the long-standing paid preparer due diligence requirement to include individual income tax returns claiming the head of household filing status. The final regulations, available in the Federal Register , implement a provision included in the Tax Cuts and Jobs Act (TCJA), the tax reform legislation enacted in December 2017. The additional requirement will apply starting with 2018 returns, prepared on or after November 7, 2018. The due ...
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IRSAC expands

By NSA Blogger
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IRSAC expands to cover more areas of the IRS; IRPAC and ACT to join centralized advisory committee in 2019 The Internal Revenue Service announced today that the Internal Revenue Service Advisory Committee’s role will expand in 2019 to have a wider portfolio and incorporate two other advisory groups. The expanded IRSAC will include areas currently covered by both the Information Reporting Program Advisory Committee (IRPAC) and the Advisory Committee on Tax Exempt and Government Entities (ACT). The combined advisory group will provide a more unified platform for representatives of the tax community and the IRS to discuss pressing issues in tax administration. ...
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401(k) contribution limit increases to $19,000 for 2019; IRA limit increases to $6,000

By NSA Blogger
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The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.  The IRS today issued technical guidance detailing these items in Notice 2018-83 . Highlights of Changes for 2019 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject ...
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IRS issues proposed regulations for Revenue Code section 956

By NSA Blogger
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The Internal Revenue Service today issued proposed regulations reducing the amount determined under Internal Revenue Code section 956 for certain domestic corporations that own (or are treated as owning) stock in controlled foreign corporations (CFCs).  The Tax Cuts and Jobs Act (TCJA), passed in December 2017, made major changes to the tax law, including enacting a participation exemption system for the taxation of certain foreign income. The new proposed regulations are intended to ensure that the application of section 956 is consistent with the new participation exemption system. Treasury and IRS welcome public comments on these proposed regulations. ...
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Taxpayers can get tax help after hurricanes and other natural disasters

By NSA Blogger
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Each year, hurricanes and other natural disasters leave widespread damage in their wake. In addition to property losses, disasters can have an effect on victims’ taxes. The IRS wants taxpayers to know that when a disaster strikes, the agency is here to help. Here are some resources taxpayers can find on IRS.gov: Around the Nation . The Around the Nation page provides local tax news, including disaster relief information for specific areas. Disaster declarations . The Tax Relief in Disaster Situations page of IRS.gov has a list of the latest disaster declarations and any disaster-related tax relief. Tax information about federally declared disasters ...
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2019 PTIN renewal period underway for tax professionals

By James Crawford
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Accountants and tax preparers need to be aware that the 2019 PTIN renewal period has begun. The Internal Revenue Service today reminded the nation’s more than 768,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers (PTINs) for 2019. All current PTINs will expire Dec. 31, 2018. Anyone who prepares or helps prepare any federal tax return, or claim for refund, for compensation must have a valid PTIN from the IRS. The PTIN must be used as the identifying number on returns prepared. Failure to have and use a valid PTIN may result in penalties. “We ask that you renew your PTIN as soon as possible to avoid a last-minute ...
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Tax reform brings changes to real estate rehabilitation tax credit

By NSA Blogger
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The rehabilitation tax credit offers an incentive for owners to renovate and restore old or historic buildings. Tax reform legislation passed in December 2017 changed when the credit is claimed and provides a transition rule:  The credit is 20 percent of the taxpayer’s qualifying costs for rehabilitating a building. The credit doesn’t apply to the money spent on buying the structure. The legislation now requires taxpayers take the 20 percent credit spread out over five years beginning in the year they placed the building into service. The law eliminates the 10 percent rehabilitation credit for pre-1936 buildings. A transition rule provides relief ...
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IRS extends Oct. 15 and other upcoming deadlines, provides expanded tax relief for victims of Hurricane Michael

By NSA Admin
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Hurricane Michael victims in parts of Florida and elsewhere have until Feb. 28, 2019, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today. The IRS is offering this relief to any Major Disaster Declaration area designated by the Federal Emergency Management Agency ( FEMA ) as qualifying for either individual or public assistance. Currently, this only includes parts of Florida, but taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available ...
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IRS issues guidance on Tax Cuts and Jobs Act changes on business expense deductions for meals, entertainment

By NSA Admin
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The Internal Revenue Service issued guidance today on the business expense deduction for meals and entertainment following law changes in the Tax Cuts and Jobs Act (TCJA). The 2017 TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact. Food and beverages that are ...
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Court upholds validity of IRS Annual Filing Season Program

By NSA Blogger
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The US Court of Appeals for the DC Circuit today upheld the IRS Annual Filing Season Program, finding that the IRS had the legislative authority to develop and implement the Program under existing statute. The challenge to the Program was brought by the AICPA, which argued that the AFSP should be invalidated for two reasons:  it violates this same Courts opinion in the Loving case and also that the Program, which is implemented by means of a Revenue Procedure, is invalid because it was not subject to a notice and comment period as required by law. In its opinion, the Court noted that, “Consistent with its authority under § 330(a), and contrary to the AICPA’s ...
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IRS Notice 2018-64 Addresses Wage Calculation for 199-A

By NSA Blogger
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Notice 2018-64 proposes a revenue procedure that provides guidance on methods for calculating W-2 wages for purposes of section 199A of the Internal Revenue Code (Code) and proposed §§ 1.199A-1 through -6 of the Income Tax Regulations (26 CFR part 1) which are being published contemporaneously.   Specifically, this notice provides methods for calculating W-2 wages (1) for purposes of section 199A(b)(2) which, for certain taxpayers, provides a limitation, based on W-2 wages, to the amount of the deduction qualified business income under section 199A; and (2) for purposes of section 199A(b)(7), which, for certain specified agricultural and horticultural cooperative ...
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IRS Releases Section 199-A Regulations

By NSA Blogger
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The IRS released the long-awaited guidance for 199-A, Qualified Business Income (QBI), this morning. This release contains proposed regulations concerning the 20% QBI deduction that impacts small businesses, individuals, partnerships, trusts and estates, and S-corps involved in domestic trades or businesses. The text of this update can be found here .
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IRS offers guidance on recent 529 education savings plan changes

By NSA Blogger
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The Internal Revenue Service and Department of the Treasury today announced their intent to issue regulations on three recent tax law changes affecting popular 529 education savings plans . Notice 2018-58 , addresses a change included in the 2015 Protecting Americans From Tax Hikes (PATH) Act, and two changes included in the 2017 Tax Cuts and Jobs Act (TCJA). Taxpayers, beneficiaries, and administrators of 529 and Achieving a Better Life Experience (ABLE) programs can rely on the rules described in this notice until the Treasury Department and IRS issue regulations clarifying these three changes. Tuition refunds The PATH Act change added ...
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NSA Scholarship Foundation Announces Student Recipients

By NSA Blogger
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More than $31,000 awarded to 25 Students Nationwide The National Society of Accountants (NSA) Scholarship Foundation has awarded 25 students scholarships to continue their college education. Combined, NSA scholarships for 2018 totaled $31,200. Since its inception in 1969, the NSA Scholarship Foundation has provided more than $1 million to deserving undergraduate and graduate students pursuing a career in accounting. The scholarships range from $500 - $2,500. Recipients were selected on the basis of scholastic achievement, demonstrated leadership ability, and financial need. “The NSA Scholarship Foundation assists dedicated students who are committed ...
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