Perspectives

Perspectives


Tax Alerts
April 3, 2013
Tax Briefing(s)
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June 30 deadline approaches for VCSP TEE worker classification program
The IRS recently expanded its Voluntary Classification Settlement Program (VCSP) for employers that agree to reclassify their workers as employees for future pay periods. The expansion of the VCSP,…
Extended April 29 deadline given for extended Work Opportunity Tax Credit
The IRS has provided transition relief to employers that hire members of targeted groups under the Work Opportunity Tax Credit (WOTC) to reflect the retroactive extension of the credit back to the …
Outside HVAC units fail to qualify for rapid depreciation
IRS’s Chief Counsel has ruled that heating, ventilation, and air conditioning (HVAC) units installed outside a building are not qualified leasehold improvement property (QLIP). As a result, the bus…
Court backs IRS refusal to lower back taxes installment payments by tithing expense
In a case of first impression, the Tax Court has ruled that the IRS did not violate the Religious Freedom and Restoration Act (RFRA) by denying a reduction of a taxpayer’s monthly installm…
Latest IRS Statistics of Income Bulletin reveals uptick in AGI, salaries and more
The just-released Winter 2013 Statistics of Income (SOI) Bulletin reveals a continuing upward trend in individual adjusted gross income (AGI), salaries and wages, and other items, the IRS reported….
CA – IRA deduction properly disallowed
A taxpayer did not establish her entitlement to her claimed individual retirement account (IRA) deduction for California personal income tax purposes. The taxpayer claimed that she…
MA – Charitable contribution by a security corporation is permissible
A security corporation may make a proposed charitable contribution of appreciated securities consisting of mortgage-backed securities and other asset-backed securities and maintain…
NY – Proposed budget includes credits and other tax provisions
New York Gov. Andrew M. Cuomo has released his 2013-2014 executive budget, which contains corporate and personal income, sales and use, property, motor fuels, and other tax provisi…
PA – Retroactive charter school exemption unconstitutional
A retroactive statutory exemption from Pennsylvania property tax for a charter school was unconstitutional where it would have eliminated the vested rights of the local county and school board in t…
June 30 deadline approaches for VCSP TEE worker classification program
The IRS recently expanded its Voluntary Classification Settlement Program (VCSP) for employers that agree to reclassify their workers as employees for future pay periods. The expansion of the VCSP,…
Extended April 29 deadline given for extended Work Opportunity Tax Credit
The IRS has provided transition relief to employers that hire members of targeted groups under the Work Opportunity Tax Credit (WOTC) to reflect the retroactive extension of the credit back to the …
Outside HVAC units fail to qualify for rapid depreciation
IRS’s Chief Counsel has ruled that heating, ventilation, and air conditioning (HVAC) units installed outside a building are not qualified leasehold improvement property (QLIP). As a result, the bus…
Court backs IRS refusal to lower back taxes installment payments by tithing expense
In a case of first impression, the Tax Court has ruled that the IRS did not violate the Religious Freedom and Restoration Act (RFRA) by denying a reduction of a taxpayer’s monthly installm…
Latest IRS Statistics of Income Bulletin reveals uptick in AGI, salaries and more
The just-released Winter 2013 Statistics of Income (SOI) Bulletin reveals a continuing upward trend in individual adjusted gross income (AGI), salaries and wages, and other items, the IRS reported….
CA – IRA deduction properly disallowed
A taxpayer did not establish her entitlement to her claimed individual retirement account (IRA) deduction for California personal income tax purposes. The taxpayer claimed that she…
MA – Charitable contribution by a security corporation is permissible
A security corporation may make a proposed charitable contribution of appreciated securities consisting of mortgage-backed securities and other asset-backed securities and maintain…
NY – Proposed budget includes credits and other tax provisions
New York Gov. Andrew M. Cuomo has released his 2013-2014 executive budget, which contains corporate and personal income, sales and use, property, motor fuels, and other tax provisi…
PA – Retroactive charter school exemption unconstitutional
A retroactive statutory exemption from Pennsylvania property tax for a charter school was unconstitutional where it would have eliminated the vested rights of the local county and school board in t…

As April 15 approaches, the IRS is preparing for a surge of last-minute filers and taxpayers seeking an automatic extension of time to file their 2012 returns. The IRS received more than 148 million individual income tax returns in 2012, and that number is expected to rise in 2013. The increase in returns and the expectation from taxpayers that refunds will be paid within 21 days has put some pressures on the IRS. At the same time, the IRS is preparing for employee furloughs because of sequestration (across-the-board) spending cuts. However, high-ranking IRS officials have indicated that furloughs, if necessary, would not start until after the 2013 filing season.

Many small business benefits incorporated into the Tax Code are complicated and, arguably, in need of reform. House Ways and Means Committee chair Dave Camp, R-Mich., recently released a draft proposal containing numerous tax reform measures specifically designed to simplify taxation of small businesses and partnerships. According to a report by the National Federal of Independent Business, cited by Camp, small business owners spend approximately $18 to $19 billion every year in tax compliance costs. Camp’s proposal addresses this and other issues by recommending lower tax rates, permanent Code Sec. 179 expensing, expansion of the cash accounting method, unification of tax filing rules for S corps and partnerships, and more.

The IRS recently announced the availability of updated Form 941, Employer’s Quarterly Federal Tax Return for 2013, and its instructions. Revised Form 941 and its instructions reflect the January 1, 2013 effective date of the 0.9 percent Additional Medicare Tax, expiration of the payroll tax holiday and other changes. In addition to imposing new obligations on employers, the Additional Medicare Tax presents under- and over-withholding pitfalls for impacted employees.

A return or a payment that is mailed to the IRS is timely filed or paid if it is delivered on or before its due date. A return with a U.S. postmark, which is delivered after its due date, is timely filed if the date of the postmark is no later than the due date, the return was properly addressed, and the return had proper postage. The timely mailing/timely filing rule also applies when a taxpayer receives a filing extension. If an envelope has a post office postmark and a non-post office postmark, the latter is disregarded and the post office postmark determines the filing date.

An LLC (limited liability company) is not a federal tax entity. LLCs are organized under state law. LLCs are not specifically mentioned in the Tax Code, and there are no special IRS regulations governing the taxation of LLCs comparable to the regulations for C corporations, S corporations, and partnerships. Instead, LLCs make an election to be taxed as a particular entity (or to be disregarded for tax purposes) by following the check-the-box business entity classification regulations. The election is filed on Form 8832, Entity Classification Election. The IRS will assign an entity classification by default if no election is made. A taxpayer who doesn’t mind the IRS default entity classification does not necessarily need to file Form 8832.

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of April 2013.