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Technical Guidance



On Tax Issues

The Internal Revenue Service has issued technical guidance on three tax issues: [Read more…]

New IRS Notices and Forms



  • A new revision of the Form 656-B booklet, with forms and instructions for submitting an Offer in Compromise (OIC), will be available on IRS.gov in January. The use of earlier versions after Jan. 1 will delay the processing of OIC applications.
  • Notice 2014-78 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates, and the 24-month average segment rates.  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities.
  • Notice 2014-81 establishes the Section 48B Phase III program of the qualifying gasification project program to reallocate the Section 48B Phase I credits that are available for allocation after the conclusion of the Section 48B Phase I program.

[Read more…]

TIGTA Report Says IRS Hires Critical Executives At Salaries Higher Than Typical



WASHINGTON – The Internal Revenue Service (IRS) appropriately used its legislative authority to temporarily hire employees at salaries higher than those typically given to Federal Government senior executives, according to a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The IRS Restructuring and Reform Act of 1998 (RRA 98) authorized the IRS to hire up to 40 individuals (at any one time) into positions it deemed to require extremely high-level expertise in an administrative, technical, or professional field that is critical to the IRS’s success. Appointments were limited to four years. Employees hired under the Streamlined Critical Pay (SCP) program received base salaries ranging from $130,000 to $227,300. The base pay for members of the Senior Executive Service in 2010-2013 ranged from $177,000 to $179,700.

[Read more…]

New Standard Mileage Rates Now Available; Business Rate to Rise in 2015



WASHINGTON — The Internal Revenue Service issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 57.5 cents per mile for business miles driven, up from 56 cents in 2014
  • 23 cents per mile driven for medical or moving purposes, down half a cent from 2014
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.

[Read more…]

IRS Publishes Technical Guidance on Five Issues



The IRS recently released information about a number of announcements, rulings, and notices. Five of those items, Announcement 2014-34, Revenue Ruling 2014-29, Announcement 2014-38, Announcement 2014-41, and Notice 2014-77,  are listed below.

[Read more…]

IRS Publishes Technical Guidance On Four Issues



The Internal Revenue Service has issued technical guidance for the following issues: 

  • Notice 2014-78 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates, and the 24-month average segment rates.  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities. Notice 2014-78 will be publishes in Internal Revenue Bulletin 2014-53 on Dec. 29, 2014. 
  • Notice 2014-79 provides the optional standard mileage rates for substantiating the amount of deductible expenses for using an automobile for business, moving, medical, or charitable purposes.  For 2015, the standard mileage rates are 57.5 cents for business use of an automobile, 14 cents for use of an automobile as a charitable contribution, and 23 cents for use of an automobile as a medical or moving expense. Notice 2014-79 also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.  The rules for using the optional standard mileage rates to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.  Notice 2014-79 will be in IRB IRB 2014-53, dated December 29, 2014. 
  • 2012 Tax-Exempt Bond Tables updates tax-exempt bond data for both governmental and private activity bonds issued in Calendar Year 2012 are now available on Tax Stats. Data include the term of issue, purpose, bond size, and uses of bond proceeds. 
  • 2011 Exempt Organizations’ Unrelated Business Income Tax offers eight tables presenting statistics for Tax Year 2011 from Forms 990-T, Exempt Organization Unrelated Business Income Tax Returns, are now available. The tables include statistics for the number of returns, gross unrelated business income, deductions, unrelated business taxable income, and total tax of these organizations. The statistics are classified by Internal Revenue Code section, size of gross unrelated business income, size of unrelated business taxable income or deficit, primary unrelated business activity, and type of entity.

[Read more…]

The “What Ifs” for Struggling Taxpayers



Video: What If?

People facing financial difficulties may find that there’s a tax impact to events such as job loss, debt forgiveness or tapping a retirement fund. For example, if your income decreased, you may be newly eligible for certain tax credits, such as the Earned Income Tax Credit.

Most importantly, if you believe you may have trouble paying your tax bill, contact the IRS immediately. In many cases, there are steps we can take to help ease the burden. You also should file a tax return even if you are unable to pay so you can avoid additional penalties.

Here are some “what if” scenarios and the possible tax impact: [Read more…]

ACA Basics Effect of Sequestration on Small Business



Effect of Sequestration on Small Business Health Care Tax Credit – Tax-Exempt Employers Only

Due to sequestration, refund payments issued to certain small tax-exempt employers claiming the refundable portion of the Small Business Health Care Tax Credit under Internal Revenue Code section 45R, are subject to sequestration. This means that refund payments processed on or after Oct. 1, 2014, and on or before Sept. 30, 2015, issued to a tax-exempt taxpayer claiming the Small Business Health Care Tax Credit under section 45R will be reduced by the fiscal year 2015 sequestration rate of 7.3 percent (regardless of when the original or amended tax return was received by the IRS). [Read more…]

Supreme Court Takes Up Obamacare Subsidies Appeal



Move Surprises Those Following the Case

The US Supreme Court has elected to take up the issue of tax credits given to users of the federal health exchange, setting the stage to resolve one of the most highly contested interpretations of the health care act. The court placed the case of King v. Burwell, U.S. Supreme Court, No. 14-114, on the list on November 7 rather than waiting as expected until the following Monday – a move that surprised those following the case.

A ruling by the Supreme Court is important in that it will either stop subsidies for health care among more than five million consumers, or will firm up the legal foundation of the law against the most significant legal challenge it has yet faced.

The petition before the court was brought by opponents of the Patient Protection and Affordable Care Act (“ACA”), and hinges on eight words in the original language of the act — “enrolled through an Exchange established by the State.” That language was intended to give states an incentive to create their own health care marketplaces, called exchanges.

Sixteen states have implemented a state run health insurance exchange, while others make use of the federal government-run health insurance exchange. Still other states have elected to partner with another state or the federal government. Five million-plus consumers in 34 states without their own exchanges are at issue.

Under the ACA, the Internal Revenue Service authorized subsidies in the form of tax credits, which were intended in the act to make the health care programs more accessible to lower-income consumers. In July, the 4th US Circuit Court of Appeals upheld the credits.

The Supreme Court is expected to hear arguments in the case in March, with a ruling announced not later than June of 2015. There is no analysis yet on the impact this may have on the coming tax preparation season.

The Court’s order reads:

 

14-114       KING, DAVID, ET AL. V. BURWELL, SEC. OF H&HS, ET AL.

                   The petition for a writ of certiorari is granted.

 

###

 

Sources: Supreme Court of the United States List of Ceriorti Granted

 

Scam Phone Calls Continue; IRS Unveils New Video to Warn Taxpayers



Scam Phone Calls Continue; IRS Unveils New Video to Warn Taxpayers 

IRS YouTube Video:
IR-2014-105, Oct. 31, 2014

WASHINGTON — As incidents of an aggressive telephone scam continue across the country, the Internal Revenue Service unveiled a new YouTube video with a renewed warning to taxpayers not to be fooled by imposters posing as tax agency representatives. 

The new Tax Scams video describes some basic tips to help protect taxpayers from tax scams.
[Read more…]