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Preview: carnahanlaw.com tax and law items

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tax and other legal items



Published: Sun, 28 Nov 2004 00:00:00 GMT

Last Build Date: Wed, 28 Sep 2016 01:00:00 GMT

Copyright: Copyright 1997-2015, Frank C. Carnahan, all rights reserved
 



"Instructional class" not subject to Missouri Sales Tax

Wed, 28 Sep 2016 13:00:00 GMT

The Missouri Legislation passed S.B 1025 to override the Governor's veto, providing that amounts paid for an "Instructional class", including any class, lesson, or instruction intended or used for teaching are not subject to Missouri sales tax. S.B. 1025, Laws 2016, effective October 14, 2016



New IRS Private Debt Collection Program to Begin Next Spring, IR-2016-125

Wed, 28 Sep 2016 13:00:00 GMT

The IRS announced September 26, 2016 that it plans to begin private collection of certain overdue federal tax debts next spring and has selected 4 contractors to implement the new program.



IRS testing expanded criteria for streamlined installment agreements processing through September 30, 2017

Wed, 28 Sep 2016 13:00:00 GMT

One expanded criterion being tested immediately is individual taxpayers with an assessed balance of tax, penalty and interest between $50,000 and $100,000 may experience accelerated processing of their installment agreement request if the taxpayers' proposed monthly payment is the greater of their total assessed balance divided by 84 or the amount necessary to fully satisfy the liability by the Collection Statute Expiration Date



IRS Alert warns Against fake emails purporting to contain an IRS tax bill related to the Affordable Care Ac

Mon, 26 Sep 2016 13:00:00 GMT

The IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email that includes the fake CP2000 as an attachment. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation. The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to taxpayers. The indicators are: (1) These notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms; (2) The CP2000 notices appear to be issued from an Austin, Texas, address; (3) The underreported issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage; and (4) The payment voucher lists the letter number as 105C. IR-2016-123, Sept. 22, 2016



IRS Notice advises that Newly Married Couples Should Report Marriage to Marketplace

Fri, 23 Sep 2016 13:00:00 GMT

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using information you provide. This information includes details about your family composition and your projected household income. It is important for you to report life changes - known as changes in circumstances - to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.



The IRS launched a new web page - Sharing Economy Center

Thu, 01 Sep 2016 13:00:00 GMT

The site is directed at taxpayers participating in "on-demand", "gig" or "access economy", etc., online platforms available to rent a spare bedroom, vacation rental, provide car rides, or to connect and provide a number of other goods or services, noting the income is generally taxable even if you don't receive a Form 1099-MISC, Miscellaneous Income, Form 1099-K, Payment Card and Third Party Network Transactions, Form W-2, Wage and Tax Statement, or some other income statement. The site offers tips and resources on a variety of topics including filing requirements, making quarterly estimated tax payments, self-employment taxes, and special rules for reporting vacation home rentals. The site notes that companies providing services in the sharing economy should consider several employment tax issues.



IRS to increase installment payment agreement fees and offer reduced fee online options

Tue, 12 Jul 2016 13:00:00 GMT

The fees the IRS charges foran installment agreement, direct debit installment agreement, low-income taxpayer installment agreement, and for restructuring an installment agreement or reinstating an installment agreement that is in default, are set to increase January 1, 2017



Bankruptcy Debtor owes self-employment tax on earnings from post-petition services

Tue, 09 Aug 2016 13:00:00 GMT

The Tax Court held a Chapter 11 debtor was liable for self-employment tax on self-employment income earned after filing for bankruptcy. The Court found that while the income tax arising from debtor's post petition earnings are the bankruptcy estate's liability of under Code Sec. 1398(c)(1), and Items included in the estate's gross income under Code Sec. 1398(e)(1) are not included in debtor's gross income. (Code Sec. 1398(e)(2)), there was no similar provision for self-employment taxes. Sisson, TC Memo 2016-143. he Court noted in its decision that its conclusion is consistent with Notice 2006-83, 2006-2 CB 596, but did not rely on that notice.



Form 1023-EZ User fee decreased

Tue, 12 Jul 2016 01:00:00 GMT

On July 1 the user fee to process the Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, was decreased from $400 to $275 (see Rev. Proc. 2016-32). You must submit the fee through www.pay.gov when you file a 1023-EZ application. You can pay the fee directly from your bank account or by credit/debit card.



Organizations must notify the IRS of intent to operate as a section 501(c)(4) organization

Tue, 12 Jul 2016 01:00:00 GMT

2015 legislation added Internal Revenue Code section 506, requiring an organization to notify the IRS of its intent to operate as a section 501(c)(4) organization. Organizations who intend to operate under Section 501(c)(4) are now required to submit Form 8976, Notice of Intent to Operate Under Section 501(c)(4) to the IRS. Most organizations must submit this notice within 60 days of their establishment. The Form 8976 Electronic Notice Registration System allows organizations to complete the notification process, keeps account information current and enables organizations to receive secure, digital communications from the IRS. Form 8976 may only be completed and submitted electronically. There is no paper form. This is a one-time notification. However, you will have to file annual information returns or notices (e.g., Form 990, Form 990-EZ, or Form 990-N) depending on your total assets and gross receipts. In addition to submitting the Form 8976 notice, 501(c)(4) applicants may also choose to file a complete Form 1024. Submission of a Form 1024 does not relieve an organization of the requirement to submit a Form 8976. Failure to file this notice may result in penalties. To submit this form, you must create an online account, complete the online Form 8976, Notice of Intent to Operate Under Section 501(c)(4), and submit payment. The IRS will review your submission and provide an acknowledgement within 60 days if your submission is complete and correct.



IRS Makes Electronically Filed Form 990 Data Available in New Forma

Sun, 26 Jun 2016 13:00:00 GMT

The Internal Revenue Service announced that the publicly available data on electronically filed Forms 990 will now be available for the first time in a machine-readable format through Amazon Web Services (AWS). IR-2016-87, June 16, 2016. This data set includes Forms 990, 990-EZ and 990-PF which have been electronically filed with the IRS and is updated monthly in an XML format. The data can be used to perform research and analysis of organizations that have electronically filed Forms 990, 990-EZ and 990-PF.



Forms 990-N can be viewed and downloaded from the IRS website.

Sun, 26 Jun 2016 13:00:00 GMT

Forms 990-N (e-Postcard) are not available within the IRS publicly available data on electronically filed Forms 990 available in a machine-readable format through Amazon Web Services (AWS)



IRS may revise forms to require sole owner of disregarded entity to provide EIN

Sun, 26 Jun 2016 13:00:00 GMT

A Program Manager Technical Advice (PMTA) has concluded that IRS has the authority to modify tax return forms and instructions under Code Sec. 6011(a) and Reg. Sec. 1.6011-1(a) to require the sole owner of a disregarded entity to provide the entity's Employee Identification Number (EIN) on the owner's tax return. A return filed without the additional EIN would still be a valid return for purposes of the statute of limitations and failure to file penalties. The activities of a disregarded entity are treated the same as a sole proprietorship, branch, or division of its owner. (Reg. Sec. 301.7701-2(a)) The income earned by a disregarded entity must be reported on the owner's income tax return and reported under the owner's Taxpayer Identification Number (TIN) (Reg. Sec. 301.6109-1(h)). However, disregarded entities can use an EIN for other purposes, such as for reporting employment taxes and other business taxes. (Reg. Sec. 301.6109-1(d)(4)(ii)) Issue. Allowing a taxpayer to use two types of identification numbers (TINs and EINs) may cause problems for IRS in associating different types of returns with a single taxpayer. If a disregarded entity has an EIN, it typically does not appear on the owner's tax return. Certain information returns such as Forms 1099 that reflect income earned by a disregarded entity may reflect the entity's EIN and not the owner's TIN. This makes matching the income reported on such an information return to what is reported on an income tax return difficult. Program Manager Technical Advice 2016-008



IRS to notify taxpayer of audits by appropriate initial contact letters, not telephone contact

Wed, 01 Jun 2016 13:00:00 GMT

IRS Deputy Commission for Services and Enforcement, John Dalrymple in a May 20, 2016 memorandum to the Commissioners, Large Business and International, Small Business and Self-Employed, Tax-Exempt and Governmental Entities, and Wage and Investmen ordered that going forward, IRS employees must use the appropriate initial contact letters listed in the Internal Revenue Manual (IRM) to notify a taxpayer when a return is selected for examination (audit), and "will not make initial contact by telephone."



The Bipartisan Budget Act of 2015 repealed the TEFRA partnership audit rules and replaced them

Wed, 06 Apr 2016 13:00:00 GMT

The statute raises a number of questions, some of which might be considered for a technical corrections bill. In general, adjustments to partnership income, gain, loss, deduction, or credit are determined at the partnership level, and any tax attributable to such adjustment is assessed and collected, and the applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share is determined, at the partnership level. "Tax" resulting from a partnership's audit's increase in taxable income is levied on the partnership, not partners. Income, gain, loss, and deduction adjustments items are aggregated, the aggregate is modified in certain ways, and the modified aggregate is multiplied by the highest individual or corporation tax rate (not the highest rate applicable to a partner), and increased (or decreased) by each credit adjustment. The partnership owes the imputed underpayment plus penalties, if applicable, and apparently interest.



The IRS updated collection standards March 28, 2016

Wed, 30 Mar 2016 13:00:00 GMT

generally lowering some allowances slightly



IRS Payment P.O. Box Locations in Georgia and Missouri Have Changed

Mon, 22 Feb 2016 13:00:00 GMT

As of Jan. 1, payments mailed to closed payment P.O. boxes or lockboxes in the Atlanta and St. Louis areas are no longer being forwarded to the correct lockbox location. They will be returned to the sender. Go to Where to File on IRS.gov for current payment addresses



Missouri--Income Tax Refund Fraud Prevention Measures Increased For the upcoming 2016 tax season

Thu, 18 Feb 2016 13:00:00 GMT

The Missouri Department of Revenue ("DOR") is implementing additional security measures to ensure that individual income tax refunds are issued to legitimate taxpayers. These enhanced fraud prevention measures will result in additional processing time for refunds. Tips to help taxpayers prevent and report identity theft are available on the Identity Theft page of DOR's website. Tax Bulletin Vol. 5, Ed. 1, Missouri Department of Revenue, February 3, 2016. The page includes links to form 5593 that can be emailed or faxed to DOR to advise DOR of possible fradulent tax returns.



TEFRA partnership audit rules eliminated effective for returns filed beginning after Dec. 31, 2017

Wed, 20 Jan 2016 13:00:00 GMT

The Bipartisan Budget Agreement of 2015--P.L. 114-74, eliminates the TEFRA unified partnership audit rules and the electing large partnership rules, and replaces them with streamlined partnership audit rules, effective generally for returns filed for partnership tax years beginning after Dec. 31, 2017. Many questions remain to be answered, and the new rules may result in the partnership agreement needing to be amended.



IRS announces error in IP PIN notices

Wed, 11 Nov 2015 13:00:00 GMT

The notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return



IRS Business and other standard mileage rates decrease for 2016

Fri, 18 Dec 2015 13:00:00 GMT

The standard mileage rate is $.54 per mile for business use (business standard mileage rate), $.14 per mile for unreimbursed services to a charitable organization under Sec. 170, and $.19 per mile for: (1) for medical care described in Sec. 213, or (2) deductible moving expenses under Sec. 217. Notice 2016-1, 2016-2 IRB, 12/17/2015