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Julie Dale, CPA
Julie Dale, CPA, chair, Federal Tax Policy Communications Subcommittee
Recent Activity
The IRS has announced the closing of its Offshore Voluntary Disclosure Program (OVDP), effective Sept. 28, 2018. Taxpayers have until then to come forward with previously undisclosed foreign financial assets. Clients should be encouraged to hire tax attorneys to perform the actual OVDP work even though the CPAs should be engaged to prepare the returns under the program. This helps prevent unauthorized practice of law by CPAs and, if a Kovel agreement is in place, may help preserve the attorney-client privilege. Despite the closure of ODVP, the Streamlined Filing Compliance Procedures (SFCP) will remain in place for eligible taxpayers previously... Continue reading
Posted 6 days ago at TSCPA Federal Tax Policy Blog
By William R. Stromsem, JD, CPA The Tax Cuts and Jobs Act of 2017 lowered the corporate income tax rate to a flat 21 percent and provided a one-time deemed repatriation tax on controlled foreign corporations’ current earnings and prior untaxed earnings back to 1986. The repatriation rate is 15.5 percent on liquid assets and 8 percent on illiquid assets instead of the prior 35 percent rate. Many large corporations are reporting radical changes to their bottom line from adjustments to their deferred tax assets and liabilities. It is difficult to estimate the book income effect of the repatriation tax... Continue reading
Posted Feb 28, 2018 at TSCPA Federal Tax Policy Blog
As you probably know, the IRS has revamped e-Services to make it more secure. In the IRS’ words: Starting Dec. 10, 2017, all e-Services users must register through a new, more rigorous identity proofing process called Secure Access. Any e-Services user who has not previously created a Secure Access account through Get Transcript Online, IP PIN tool, View Balance or by exception processing in recent days must validate their identity through this more rigorous process. This also includes all TIN Matching users and users who received Letter 5903 last December and authenticated by telephone. This new process is not optional... Continue reading
Posted Feb 26, 2018 at TSCPA Federal Tax Policy Blog
By David P. Donnelly, CPA-Houston, and Lindsay Verbit, CPA With the natural disasters that occurred in 2017, many CPAs are helping their clients with casualty loss deductions. Some of these clients may expect the CPA to assist in determining the amount of the loss. However, this is not a service that CPAs are licensed to perform. The IRS has issued guidance for these taxpayers by providing safe harbors for determining the amounts of these losses in Revenue Procedures 2018-8 and 2018-9. Revenue Procedure 2018-8 provides safe harbors for estimating casualty losses for personal-use residential property and personal belongings. For personal-use... Continue reading
Posted Feb 21, 2018 at TSCPA Federal Tax Policy Blog
This week, TSCPA’s Federal Tax Policy Committee urged Congress to support the IRS budget at a level to properly fund taxpayer services and to implement recent significant tax law changes. The committee believes a newly appointed commissioner (awaiting confirmation), along with a well-funded budget to support tax compliance, fund taxpayer information security, and to administer the revised tax laws, could bring change and restore congressional and public confidence in our tax system. Without adequate funding, both taxpayers and the tax system will continue to suffer. Continue reading
Posted Feb 21, 2018 at TSCPA Federal Tax Policy Blog
IRS Office of Professional Responsibility Director Stephen Whitlock recently reminded tax professionals that in situations where a client is a party in civil litigation regarding a non-tax matter, a preparer should not disclose, pursuant to a subpoena, client tax returns or the associated workpapers used or obtained in connection with the preparation of those returns except: · After obtaining the client’s written consent to the disclosure; or · Upon receipt of a valid court order requiring disclosure of the client’s tax returns to an attorney representing an opposing party in a lawsuit filed by or against the preparer’s client or... Continue reading
Posted Feb 2, 2018 at TSCPA Federal Tax Policy Blog
The IRS released an advance version of Notice 2018-13 providing administrative guidance for computing the treatment of deferred foreign income upon transition to a territorial-based taxation system—the “transition tax”—under the new Section 965. Notice 2018-13, which modifies prior Notice 2018-7, provides some clarifying definitions, fixes the exchange rate to be used in translating local currency amounts into U.S. dollars, expands the scope of the “gain-reduction” rule for previously taxed income amounts and addresses the new attribution rules. The IRS has indicated intentions to issue regulations and is requesting comments on what additional guidance should be issued to assist taxpayers in... Continue reading
Posted Jan 31, 2018 at TSCPA Federal Tax Policy Blog
The Tax Cuts and Jobs Act signed into law in December made significant changes to the deduction of entertainment expenses effective Jan. 1, 2018. The so-called “entertainment” expenses, such as sporting events, clubs and golf outings, are clearly no longer deductible. However, a recent article in Tax Notes indicates that the elimination of the deduction for entertainment expenses does not apply to certain entertainment provided to employees, such as company picnics or holiday parties, and does not appear to apply to business-related meals with associates, referral sources, clients, prospects, etc. Tax preparers should advise their clients to continue to document... Continue reading
Posted Jan 30, 2018 at TSCPA Federal Tax Policy Blog
The IRS issued final regulations in T.D. 9829 that explain procedures for electing out of centralized partnership audits. It describes what partner information must be disclosed in the election, the requirements for notifying partners of the election, and the requirement that the IRS consent to revoke an election. The centralized partnership audit rules are generally effective for partnership taxable years beginning after Dec. 31, 2017. The annual election out is only available to partnerships required to furnish 100 or fewer Schedules K-1, which includes K-1s issued by an S corporation partner, where each partner in the partnership is an individual,... Continue reading
Posted Jan 9, 2018 at TSCPA Federal Tax Policy Blog
The new tax law expands a paid preparer’s due diligence and record keeping requirements under IRC section 6695(g) to include determining a client’s eligibility to file as head of household. It imposes a $500 penalty for each failure. Due diligence requirements are already in place on Form 8867 for child tax credit, American opportunity tax credit and earned income tax credit. Until the Treasury Department and the IRS provide guidance, it is uncertain if the effective date will apply to 2017 returns, 2018 returns or perhaps even earlier year returns if prepared after Dec. 31, 2017. Until then, practitioners should... Continue reading
Posted Jan 5, 2018 at TSCPA Federal Tax Policy Blog
In a set of revenue procedures, the IRS has provided safe harbor methods that taxpayers may use in determining the amount of their casualty and theft losses for their homes and personal belongings. Rev. Proc. 2018-8 offers four safe harbor methods that apply to any qualifying casualty or theft loss, as well as three methods that apply only to losses occurring because of a federally declared disaster. Rev. Proc. 2018-9 provides a safe harbor method that allows a homeowner to use one or more cost indices to determine the amount of a home loss due to Hurricanes Harvey, Irma or... Continue reading
Posted Jan 2, 2018 at TSCPA Federal Tax Policy Blog
Significant developments in the tax reform legislative process are occurring frequently. The Senate’s version hit a $1-trillion deficit snag due to recent projections by the Joint Committee on Taxation, leaving lawmakers scrambling for new revenue sources. TSCPA has created a section on the website as a dedicated resource to assist you in keeping connected to any new developments and details related to tax reform legislation. Go to the Tax Reform Bill Information area on the website for updates. Continue reading
Posted Dec 1, 2017 at TSCPA Federal Tax Policy Blog
Trenda Hackett, CPA-Dallas, represented Texas Society of CPAs and the tax professional community in a north Texas area press conference on Nov. 30, 2017, for National Tax Security Awareness Week. Hackett is a senior technical tax editor of the Tax and Accounting business of Thomson Reuters and a member of TSCPA’s Relations with IRS Committee. The IRS is collaborating with the tax industry, state tax agencies and community organizations across the nation to alert taxpayers and reinforce vigilance on how to avoid becoming victims of identity theft and other tax scams that tend to peak as the holiday approaches. Continue reading
Posted Nov 30, 2017 at TSCPA Federal Tax Policy Blog
The IRS issued a reminder in IR-2017-189 to employers and other businesses of the Jan. 31 filing deadline that now applies to filing wage statements and independent contractor forms with the government. This deadline was the same last year. The Protecting Americans from Tax Hikes Act of 2015 includes a requirement for employers to file their copies of Form W-2 and W-3 with the Social Security Administration by Jan. 31. This deadline also applies to certain Forms 1099-MISC filed with the IRS to report non-employee compensation to independent contractors. Such payments are reported in box 7 of this form. There... Continue reading
Posted Nov 17, 2017 at TSCPA Federal Tax Policy Blog
On Oct. 26, President Trump signed into law the bipartisan Family Farmer Bankruptcy Clarification Act of 2017. It was part of a larger bill, H.R. 2266, Additional Supplemental Appropriations for Disaster Relief Requirements Act of 2017. This act reverses the Supreme Court decision in Hall v. United States, 132 S. Ct. 1882 (2012), that declared tax attributable to the sale of farm property after a bankruptcy petition was filed was not part of the bankruptcy petition and accordingly had priority over the other debts that were included in the petition. That meant the capital gains tax on the sale of... Continue reading
Posted Nov 13, 2017 at TSCPA Federal Tax Policy Blog
The IRS announced on Oct. 31, 2017, that it will stop accepting e-filed returns for 2016 after Nov. 18, 2017. After that date, any disaster victims who are eligible to file through Jan. 31, 2018, will be required to submit their returns via paper instead of e-filing. This will likely result in delays in processing and remitting refunds for the disaster victims. The disaster victims are those affected by hurricanes, tropical storms or wildfires in portions of the following states: California, Florida, Georgia, Louisiana, South Carolina and Texas. Portions of Puerto Rico and the Virgin Islands also qualify for the... Continue reading
Posted Nov 7, 2017 at TSCPA Federal Tax Policy Blog
For more than a year, TSCPA’s Federal Tax Policy Committee and the tax professional community have expressed concerns with IRS Appeals’ changes that made telephone appeals conferences the primary method over in-person conferences. Appeals recently announced that it will roll back some of those changes, returning to the general rule to provide taxpayers with in-person appeals conferences in field cases. That liberalization will not apply to service center-generated cases. The IRS has indicated that it will release interim revised guidance soon. TSCPA’s committee advocated for taxpayers’ rights in Appeals proceedings, including for in-person conferences, in a letter dated May 13,... Continue reading
Posted Oct 9, 2017 at TSCPA Federal Tax Policy Blog
On Tuesday, the U.S. Department of Treasury released its second report in response to Executive Order 13789 to reduce burdensome tax regulations. Treasury Secretary Steven Mnuchin is recommending significant action on two of the rules that TSCPA’s Federal Tax Policy Committee listed in its letter dated Aug. 2, 2017. Treasury will withdraw proposed regulations under Section 2704 that would negatively impact family-owned and operated businesses by limiting valuation discounts that may be applicable when businesses are transferred from one generation to the next. Treasury also would revoke the final and temporary Section 385 documentation regulations and replace them with streamlined... Continue reading
Posted Oct 6, 2017 at TSCPA Federal Tax Policy Blog
The IRS officially announced in IR-2017-135, IR-2017-138 and IR-2017-160 that filing deadlines will be extended until Jan. 31, 2018, for most tax returns for individuals who live and businesses whose principal place of business is located in the Hurricane Harvey disaster area (see below). These include: · Individual, corporate, estate, trust, partnerships, S corporation, gift, generation skipping transfer, tax exempt, benefit plan, employment and excise tax returns for which the initial due date (including extensions) was after Aug. 23 and before Jan. 31, 2018; · Quarterly estimated taxes originally due on Sept. 15, 2017, and Jan. 16, 2018; and ·... Continue reading
Posted Sep 28, 2017 at TSCPA Federal Tax Policy Blog
On Sept. 8, TSCPA sent a letter urging Congress to pass legislation that would extend tax filing deadlines for those impacted by Hurricane Harvey. In the letter, TSCPA also supports legislation that would automatically extend reporting deadlines for all tax-related documents and elections in the event of a federally-declared disaster. Read the letter Continue reading
Posted Sep 20, 2017 at TSCPA Federal Tax Policy Blog
by Gerard H. Schreiber, Jr., CPA, and Valrie Chambers, CPA, Ph.D Hurricane Harvey has brought about unique circumstances never seen before. We are accustomed to hurricanes as recently experienced with Allison, Katrina, Rita, Wilma, Gustav, Ike and Isaac. The catastrophic flooding from Hurricane Harvey is an event no one anticipated would happen. This will review topics associated with the filing of returns for taxpayers affected by disasters: Basics of a casualty loss Individual casualty losses Business casualty losses Involuntary conversions for personal residences and business property Code Section 121 exclusion Personal belongings FEMA payments Code Section 165(i) election Casualty Losses... Continue reading
Posted Aug 28, 2017 at TSCPA Federal Tax Policy Blog
Texas Society of CPAs’ Federal Tax Policy Committee issued a letter to IRS Commissioner John Koskinen raising concerns about recent changes to Internal Revenue Manual (IRM) The changes provide discretion for greater involvement by the Examination Division and Office of Chief Counsel in Appeals conferences and may undermine Appeals’ independence, causing taxpayers to lose confidence in the case resolution process. The committee encourages the IRS to clarify and limit the degree of other IRS divisions’ involvement in Appeals conferences, particularly Exam’s involvement, to preserve fair and impartial proceedings. Continue reading
Posted Aug 17, 2017 at TSCPA Federal Tax Policy Blog
Treasury Notice 2017-36 amends and delays for one year, to Jan. 1, 2019, the IRS’ application of final and temporary regulations under Section 385 regarding documentation necessary to determine whether an interest in a corporation is treated as stock or indebtedness for IRC purposes. After taxpayers raised concerns, these regulations were listed in Notice 2017-38 as needing significant revisions pursuant to President Trump’s Executive Order 13789. TSCPA’s Federal Tax Policy Committee issued related comments on June 29, 2016, and again Aug. 2, 2017, on the broad-sweeping changes. Notice 2017-36 also requests comments on whether the amendment and delay provide sufficient... Continue reading
Posted Aug 16, 2017 at TSCPA Federal Tax Policy Blog
TSCPA’s Federal Tax Policy Committee has requested to testify at an IRS public hearing on the centralized partnership audit proposed rules on Sept. 18, 2017. David Colmenero, JD, CPA-Dallas, and David Donnelly, CPA-Houston, will travel to Washington, D.C., to represent the committee. In two previous comments letters, the committee encouraged the IRS to make necessary modifications to reduce the administrative burdens on both the IRS and taxpayers and to balance consistency with flexibility. Continue reading
Posted Aug 11, 2017 at TSCPA Federal Tax Policy Blog
By Miguel Reyna, CPA-Dallas The Treasury Inspector General for Tax Administration (TIGTA) published final audit results on July 26, 2017, that found more than $7 billion of potential employer underreported payroll taxes are not being addressed because the IRS did not work the most productive cases. The IRS uses a program called the Combined Annual Wage Reporting (CAWR) to compare the employee wage and withholding information on employer payroll tax forms with the Social Security Administration’s (SSA) withholding documents. According to TIGTA, the program is working effectively in identifying the reporting mismatches. However, 83 percent of the mismatches are not... Continue reading
Posted Aug 8, 2017 at TSCPA Federal Tax Policy Blog