IRS NEWS FOR TAX PROS
DECEMBER 2009
● EITC Due Diligence Compliance Program EITC return preparers may get letters or personal visits from the IRS starting this fall. The focus is reducing EITC errors.
● The recently enacted Worker, Homeownership, and Business Assistance Act of 2009 has provisions for extension and expansion of the First Time Homebuyer Credit and more. Watch irs.gov for updates, or read the bill at the Library of Congress web site (Public Law No: 111-92).
●Web site tip of the month: The IRS Tax Map has an index to much helpful information.
http://taxmap.ntis.gov/taxmap/
● SBTV has business news-casts daily on the web and information from the IRS and other business partners.
● New Publication 4128, Tax Impact of Job Loss, explains tax issues connected to severance pay, unemployment compensation, pension plans, job search expenses and moving costs. It is also available in Spanish.
● Bartering, trading one product or service for another, has tax responsibilities. The updated Bartering Tax Center provides tax information and reporting requirements for participants and barter exchanges.
● INFLATION ADJUSTMENTS
▪ According to the Social Security web site, the wage base will remain the same for 2010, at $106,800.
▪ IR 09-93,Tax rate brackets and various tax benefits will remain unchanged or change only slightly in 2010 due to inflation.
▪ Revenue Procedure 09-50 sets forth the cost-of-living adjustments to certain items for 2010 as required under various provisions of the Code.
▪ IR 09-94 The IRS announced cost‑of‑living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2010. The annual limits for most retirement plans remain the same as in 2009., except for the following:
o The modified adjusted gross income limits for determining the deductible amount of traditional IRA contributions for single and head of household filers who are active participants in a plan, and for married taxpayers filing jointly who aren’t active participants in a plan but whose spouses are;
o The modified adjusted gross income for Roth IRA purposes for determining the maximum Roth IRA contributions for taxpayers whose filing status is married filing jointly or qualifying widow(er); and
o The adjusted gross income limits for taxpayers who qualify for the 50% savers credit.
● Revenue Procedure 09-51 gives the procedures for employers who are eligible to file Form 944, to request to file Form 944 instead of Forms 941. It also tells how employers, who previously were notified to file Form 944, can request to file Forms 941 instead.
● The Taxpayer Advocate Service has a new toolkit. Become their Facebook fan.
RECENT TECHNICAL GUIDANCE
● Generally, an Employer Identification Number (EIN) is requested by listing on the application an individual or entity who is the entity’s true responsible party as the principal officer, general partner, grantor, owner, or trustee. The “responsible party” is the individual or entity that controls, manages, or directs the entity and the disposition of the entity’s funds and assets. A nominee, however, is someone who is given limited authority to act on behalf of an entity, usually for a limited period of time, and usually during the formation of the entity. A nominee should not request an EIN. If you used a nominee when applying for an EIN visit the Updating Incorrect Business Entity page to learn how to correct the information.
● The Small Business/Self-Employed (SBSE) division of IRS is conducting its annual telephone survey of tax professionals and needs your input.
● Learn about Audit Technique Guides on TaxWise TV. These guides contain examination techniques, unique industry issues, business practices, and terminology.
● In a recent podcast, a CPA describes the benefits of e-filing her clients tax returns.
● The Fall 2009 Employee Plans News includes information about hardship distributions, retirement and savings initiatives, and more.
● Headliner 276 IRS spotlights tax benefits for small businesses that accommodate and hire individuals with disabilities.
● Headliner 277 Lump-sum timber sales now require issuance of Form 1099-S.
● Headliner 278 October Tax Talk Today offered answers to the question: What Should You Know About ARRA 2009? You can view the archived program or read the transcript at http://www.taxtalktoday.tv
● IR-09-95 has remarks of IRS Commissioner Doug Shulman before the 2009 NACD Corporate Governance Conference in Washington, DC.
● IR 09-96 There is a new form, Form 4506T-EZ, that can be used to order a Form 1040 series tax return transcript free of charge. This will make it simpler for people, especially homeowners trying to modify or refinance their mortgages, to order copies of their tax return transcripts.
● IR 09-97 The Information Reporting Program Advisory Committee released the group’s 2009 recommendations.
● IR-09-98 People can now weatherize their homes and be rewarded for their efforts. Homeowners making energy-saving improvements this fall can cut their winter heating bills and lower their 2009 tax bill as well.
● IR-09-99 Two out of three Individuals are now using IRS e-File.
● IR-09-100 The IRS is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities (ACT).
● IR-09-101 The IRS is looking for taxpayers who are due a combined $123.5 million in 107,831 refund checks that were returned due to mailing address errors.
● IR-09-102 The Internal Revenue Service announced the selection of new members for the Electronic Tax Administration Advisory Committee (ETAAC), including Leann Boswell of Van Meter, Iowa.
● IR-2009-104 IRS Announces 2010 VITA Grant Recipients
● Announcement 09-82 provides relief for sponsors of statutory hybrid plans that must amend the interest crediting rate in those plans. Plan sponsors may rely on this announcement pending publication of the anticipated additional guidance described in the announcement.
● The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) waived required minimum distributions (RMDs) for 2009 from defined contribution (DC) plans and individual retirement arrangements (IRAs). Notice 09-82 provides two sample plan sponsors may adopt. See Employee Plans News, September 25, 2009, Special Edition for more information.
● Notice 09-84 provides a limited administrative exception to the ability of the Internal Revenue Service to examine a Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return) in connection with certain protective claims for refund based on a deduction under section 2053 of the Internal Revenue Code (Code) and filed within the time prescribed in section 6511(a) of the Code.
● Notice 09-86 extends the time by which a governmental plan must comply with final regulations on distributions from a pension plan upon attainment of normal retirement age (“the NRA regulations”),
● Notice 09-87 invites public comment on possible modifications to the conditions established in Rev. Proc. 80-59, under which a trustee of a blind trust that meets the requirements of section 102(f)(3) of the Appendix to Title 5 of the United States Code may execute and file an income tax return on behalf of any individual described in section 101(f) of the Appendix to Title 5 of the United States Code.
● Notice 09-89 sets forth a process that allows manufacturers to certify that a particular plug-in electric drive motor vehicle meets the requirements of § 30D of the Internal Revenue Code.
● Notice 09-91 provides guidance to employers paying wages to nonresident alien employees for services performed within the United States.
● TD 9468 contains final regulations relating to the amount deductible from a decedent’s gross estate for claims against the estate under section 2053(a)(3) of the Code. The regulations update the provisions relating to the deduction for certain state death taxes to reflect the statutory amendments made in 2001 to sections 2053(d) and 2058. The regulations primarily will affect estates of decedents against which there are claims outstanding at the time of the decedent’s death.
● TD 9469 contains final regulations that provide guidance on the manner in which an S-corporation reduces its tax attributes under section 108(b) for taxable years in which the S-corporation has discharge of indebtedness income that is excluded from gross income under section 108(a).