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Flashes/Alerts 2015

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Tax Flash

As noted in the December 21 Marcum Tax Flash, the Protecting Americans from Tax Hikes of 2015 Act (PATH), also referred to as the "Tax Extenders Bill," was signed into law last week.


Tax Flash

On Friday, December 18, President Obama signed the Protecting Americans from Tax Hikes Act of 2015 ("the PATH Act") which provides more certainty for international tax planning going into 2016 and future years.

 


Corporate Taxation

In a divided three-judge panel, the 9th Circuit Court has determined that taxpayers have zero basis in stock received on demutualization of insurance. This decision is in conflict with the result in Fisher v US, a Federal Claims Court case which allowed the use of a cost recovery approach so that premiums could be applied to the value of shares received.

 


Tax Flash

Congressional leaders unveiled a massive comprehensive package last week, which will not only keep the government funded through September 2016, but also addresses the extension of many valuable tax provisions.

 


Tax Flash

The House of Representatives has just passed the Protecting Americans from Tax Hikes Act of 2015, more commonly called the "Tax Extenders Bill." The Bill is expected to be approved by the Senate today and the President is expected to formally sign before the holiday break.

 


Tax Flash

On December 14th, 2015, Coca-Cola Co. filed a petition in U.S. Tax Court (Coca-Cola v. Commissioner, T.C.) challenging a proposed $9.4 billion income tax adjustment related to the company's transfer pricing for the years 2007-2009.

 


Tax Flash

Congress has recently passed and the President has signed the Fixing America's Surface Transportation (FAST) Act.

 


Tax Return Compliance

It's that time of year again. The time when the days begin to get shorter and the greatly awaited rate computation reports start arriving in the mail.

 


Financial Statements

Will your company be subject to the new revenue recognition rules that take effect in 2017 and 2018? If so, are you operating under the assumption that you still have a nice chunk of time to prepare? Think again -- the rules are applicable sooner than you think!

 


Tax Flash

The IRS has issued new Notice 2015-82, which provides a significant benefit to small businesses under the tangible personal property repair and capitalization regulations.

 


Corporate Taxation

In general, a small business may elect to become an S corporation by filing Form 2553 no more than two-and-a-half months following the beginning of the tax year in which the election is to take effect, or at any time in the tax year preceding the tax year the election is to take effect.

 


Corporate Taxation

In general, a small business may elect to become an S corporation by filing Form 2553 no more than two-and-a-half months following the beginning of the tax year in which the election is to take effect, or at any time in the tax year preceding the tax year the election is to take effect.

 


Tax Flash

The President has recently signed the Bipartisan Budget Act of 2015, which contains a number of tax- related provisions.

 


Government Services

Government employers are facing many questions regarding the implementation of Governmental Accounting Standards Board ("GASB") Statement No. 68, Accounting and Financial Reporting for Pensions, an amendment of GASB Statement No 27. Following is an overview of the applicability of the statement and its effect on financial reporting for employers.

 


Tax Return Compliance

The last thing on the minds of divorcing couples is, most likely, taxes. However, this is something that should not be ignored, particularly in regard to the final financial terms of the divorce agreement. One key issue that should be considered is the question of which spouse will get the credit for estimated tax payments and overpayments applied from the previous jointly filed return.

 


Tax Return Compliance

In a two-to-one decision, a three-judge panel of the Court of Appeals for the Ninth Circuit has ruled that Federal income tax home mortgage interest deduction limitations apply individually to each unmarried co-owner of a qualified residence, and not to the residence itself.

 


Tax Flash

Congress has recently enacted the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 which addresses the basis reporting requirements associated with estates.

 


Tax Flash

Conditions in the real estate markets can have a major impact on real estate assessments, and ultimately the tax bills property owners must pay.

 


International Taxation

On July 31st, President Obama signed the ‘Surface Transportation and Veterans Health Care Choice Improvement Act of 2015' into law, which as unlikely as the name might otherwise imply, changed the due date of several key tax forms, including those for Americans with foreign income and Americans living abroad.

 


International Taxation

Foreign persons who work, or invest, within the U.S. maybe subject to U.S. income taxes based on their activities. Further, these same individuals may be taxed differently from one another based on certain criteria.

 


Tax Flash

Under the recently passed Trade Preferences Extension Act of 2015, Congress increased the penalties for late filing or failing to file correct information returns with the government (under IRC section 6721) or to the payee (under IRC section 6722) for 2015 returns.

 


Tax Flash

On July 22, 2015, the Internal Revenue Services issued Proposed Regulations to provide guidance on which allocations or distributions made by a partnership to a partner who provides services to the partnership may be treated as disguised payments for services.

 


Tax Flash

The Affordable Care Act (ACA) imposes annual information reporting requirements on issuers of health insurance, including employers with self-funded plans, under IRC section 6055, and applicable large employers under IRC section 6056.

 


Tax-Exempt Business

The Financial Accounting Standards Board ("FASB") has been working on a financial statement project that may result in a number of changes to accounting standards and financial reporting for non-profit organizations ("NFP's").

 


Tax Return Compliance

The IRS has announced a proposal in a recently released Notice that will ease some of the burden on taxpayers making a Section 83(b) election.

 


Tax Flash

The Senate has passed the short-term highway funding bill, providing a three-month extension of general expenditure authority for the Highway Trust Fund. This bill was signed by President Obama on July 31, 2015.

 


Tax Return Compliance

The IRS receives 9000-12,000 calls every week regarding complaints about tax scams. The tax advisors at Marcum also advise our clients about recognizing and avoiding tax scams, and the Firm has issued alerts about the many scams that keep arising.

 


Tax Flash

Taxpayers under examination who are seeking to file a change of accounting method should begin filing this week, based on newly established filing time windows established by a new IRS guidance issued in June 2015.

 


IT Risk & Assurance

Recent cybersecurity breaches such as Target and Neiman Marcus have caused the U.S. Government to start implementing security initiatives throughout all sectors to help defend against cyber-attacks. Companies too often find themselves in a reactive mode based on the latest attack by remediating the now known vulnerabilities in the organization.

 


Tax Flash

Two new international trade bills were recently enacted into law last week and another is in the process of reconciliation. The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 and the Trade Preferences Extension Act of 2015 were passed by Congress prior to the July 4th recess.

 


Tax Flash

On June 30, 2015, final budget Bill S1502 was enacted by special session of the Connecticut General Assembly and signed by Governor Dannel Malloy.

 


Tax Credits & Incentives

The Tax Increase Prevention Act ("TIPA"), enacted on December 19, 2014, retroactively extends several tax incentives that expired at the end of 2013. Among the key features of TIPA is a provision extending benefits to eligible investors in Qualified Small Businesses.

 


Tax Flash

The Supreme Court yesterday delivered its much anticipated decision in the case of King v Burwell, upholding premium tax credits under the Affordable Care Act (ACA) for taxpayers residing in states which have federal or federal-state Partnership Exchanges.

 


Modern Family & LGBT Services

The U.S. Supreme Court today issued a ruling establishing same-sex marriage as a legal right in all 50 states (Obergefell v. Hodges). The decision determined that the Fourteenth Amendment requires all states to license a marriage between two people of the same sex.

 


Tax Flash

As we approach June 30, we are reminded, again, that any U.S. person who has a financial interest in or signature authority over any foreign-based financial accounts is required to file an FBAR (Report of Foreign Bank Account - FINCEN Form 114).

 


Tax Flash

How often do you think about where your business' tax dollars are going? What if you had the power to direct your tax dollars towards your local community's educational system and increase your company's tax benefits at the same time? The opportunity to support the education of tomorrow's workforce while furthering your company's profitability is a no-brainer for any discerning businessman or woman.

 


Tax Controversy

The recent breach of more than 100,000 tax accounts through the IRS's "Get Transcript" application serves as a reminder that in today's digital society, protecting our personal information is more important than ever. According to the Bureau of Justice Statistics, 16.6 million people were affected by identity theft in 2012, with financial losses of $24.7 billion -- $10 billion more than any in other form of property crime.

 


Trusts & Estates

In a recent Tax Court case, the Court reinforced existing Internal Revenue Service Regulations related to the substantiation rules for non-cash charitable contributions. The Court denied the taxpayer's claimed $37,000 of charitable deductions and subjected him to accuracy-related penalties and interest. 

 


Tax Flash

On June 4, 2015, the Connecticut General Assembly passed budget bill H7061 which encompasses a wide range of controversial tax changes to all facets of Connecticut taxation including corporate income tax, personal income tax, and sale and use taxes.

 


Tax Return Compliance

Living with a disability is challenging and often this requires adaptation on an individual's part. If you are a person with a disability or have a dependent with a disability it is important to be aware that you may be entitled to certain tax benefits which include deductions for impairment-related work expenses and credits for businesses wishing to accommodate persons with disabilities.

 


Tax Return Compliance

As summer approaches, businesses often need to hire seasonal or part-time workers to help them through those busy months.

 


Tax Flash

Pursuant to the requirements of the International Investment and Trade in Services Survey Act and related statutes, the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) collects information on international trade in services, foreign direct investment in the United States, and outbound U.S. investment overseas.

 


Tax Return Compliance

The United States Supreme Court yesterday issued their decision (5-4) in the taxpayer's favor in a case involving whether a State can limit the ability for residents to claim a credit for taxes paid to other states against both the state tax and the county/local portion of the tax.

 


International Taxation

The National Taxpayer Advocate has proposed changes to the Foreign Account Tax Compliance Act (FATCA) reporting requirements in an effort to ease duplication for taxpayers - particularly those who also file the Report of Foreign Bank and Financial Accounts (FBAR).

 


Tax Controversy

Tax return and other tax-related identity theft has become an increasing problem for the Internal Revenue Service and taxpayers.

 


Tax Flash

As announced in a prior Marcum Tax Flash, the Massachusetts Department of Revenue permitted a 60-day tax amnesty program which began on March 16, 2015 and runs through May 15, 2015. This Flash is a reminder for those who may be eligible to review files and take action before the upcoming deadline. The program allows eligible taxpayers to resolve existing liabilities by paying only the tax and interest owed. The Department will waive all penalties.

 


Tax Flash

Taxpayers who have timely filed income tax returns and paid any taxes owed by the required due dates may still receive a notice from a federal or state taxing authority regarding unpaid taxes due.

 


Tax Return Compliance

It is hard to believe that in these times of financial recovery that the odds of a business being audited by the Internal Revenue Service have dropped consistently in the last few years. This may not be so hard to believe in light of the fact that the number of individuals employed by the IRS has fallen by 8% and funding has been cut by nearly 10%.

 


Tax Credits & Incentives

The California State Assembly has introduced a bill to establish a Research and Development (R&D) Small Business Grant Program that would allow qualified small businesses to obtain grant payments for unused tax credits. The bill would provide small businesses with the ability to obtain cash grants to maximize the utilization of the research and development credits regardless of tax liability.

 


The Qualified Tuition Programs or the "529 College Saving Plans" was one of the biggest remarks that President Obama announce in his State of the Union speech on January 20, 2015. The president proposed to roll back the tax advantages of 529 Plans and then he dropped his proposal.

 


Tax Return Compliance

The Internal Revenue Service has warned taxpayers about groups claiming to be charitable organizations to entice contributors to make donations. This scam has been added to the "Dirty Dozen", a list of common scams that the IRS compiles annually.

 


Tax Credits & Incentives

In 1996, Oregon and California were the first states to pass legislation that legalized marijuana for medical purposes. Today, there are 23 states and the District of Columbia that have laws in place that allow the cultivation and use of marijuana for medicinal purposes -- many other states have decriminalized possession while others are working towards legalization (OH and PA.)

 


Tax Return Compliance

Specially trained IRS auditors are investigating errors made by employers on the withholding of federal income taxes, Federal Insurance Contribution Act (FICA), and Federal Unemployment Tax Act (FUTA). Another focus of these payroll tax audits is on the proper classification of workers as common law employees instead of independent contractors.

 


Tax Return Compliance

A recent small tax court case had a favorable outcome for the taxpayer. In this case, the taxpayer was able to deduct home mortgage interest paid during a year in which he neither owned the home, nor was he listed as liable on the mortgage debt.

 


Tax Flash

The IRS has issued final regulations relating to the time and manner of electing to use the Alternative Simplified Method to compute the Research and Development Credit (ASC). The final regulations mirror the previously issued temporary regulations.

 


Tax Return Compliance

What happens when a company makes an honest mistake and seeks IRS assistance in rectifying the problem? See below for an explanation of how the solution did not fairly address the consideration of the affected former employees. The former employees sued and won.

 


Tax Return Compliance

The Internal Revenue Service is warning taxpayers for the 2015 filing season about phony charitable organizations. There has been an increase in illegal scams of organizations pretending to be legitimate organizations that ask for contributions from unsuspecting taxpayers.

 


Tax Credits & Incentives

Starting with the calendar year 2012, Florida introduced the Research and Development Expense Credit as an incentive for corporations in certain targeted industry businesses, such as manufacturing, biotech, telecommunications and certain finance services.

 


State & Local Taxation

Massachusetts Governor Charlie Baker has recently signed a bill (H.B. 52) containing a limited tax amnesty program. While specific details have yet to be released the framework of the program has been released within the signed legislation.

 


Tax Flash

Responding to requests from the small business community, IRS issued Rev Proc 2015-20 last week, which provides an alternate simplified method for qualifying taxpayers to adopt the new repair regulations on their 2014 tax returns.

 


Tax Flash

IRS issued Notice 2015-17 on February 18, 2015 providing relief for certain employers from a $100 per day per employee penalty for having plans which do not satisfy the Affordable Care Act Market Reforms.

 


Tax Return Compliance

Qualified home mortgage interest expenses are claimed as an itemized deduction under Schedule A of the Form 1040. Schedule A allows deductions of interest on loans of up to $1,000,000 and interest on home equity debt of up to $100,000.

 


Trusts & Estates

A friend or loved one has passed away. A few months have gone by, and you remember that you agreed to be their trustee/executor. When they asked, you were flattered and honored. Now you are overwhelmed by the magnitude of the job. You were never a numbers person�.

 


Tax Credits & Incentives

Recent taxpayer friendly Regulations proposed by the IRS on January 16, should encourage those taxpayers who develop software for internal use, to re-visit the accumulated costs for potential creditable treatment. Many favorable rules are included in these proposals that may enable taxpayers who did not previously qualify for the Research and Development Credit, to now become eligible.�

 


Tax Return Compliance

One area that the IRS is currently focusing on is payroll taxes.�They are seeking to recoup what they consider lost revenue attributable to payroll taxes that are unreported and unpaid.�Employers should take the necessary steps to make sure they are complying with the various payroll tax rules and reporting requirements.�

 


Family Wealth Services

The rules on IRAs can be complicated whether they are for a Traditional IRA or Roth IRA. However, the rules on inherited IRAs can even be more complicated.

 


State & Local Taxation

California lawmakers certainly heeded the call of Bob Dylan's anthem with over 900 new laws, most to take effect January 1, 2015 and others not until July1, 2015.

 


Corporate Taxation

There can be several tax consequences as a result of a transfer of a partnership interest during the year. This article discusses some of those tax issues applicable to the partnership.

 


Tax Flash

New York State's Budget passed in 2014 has significantly changed the filing and payment procedures for the Metropolitan Commuter Transportation Mobility Tax (MCTMT) beginning with Tax Year 2015.�

 


Tax Flash

As mentioned in prior Marcum Tax Flashes and the 2014 Year End Guide, in September of 2013, the IRS released final Tangible Property Regulations (TPR.) These regulations were about ten years in the making and will generally require all taxpayers with depreciable property to comply no later than the due date of the 2014 tax returns.

 


Tax Flash

On January 20, President Obama presented the State of the Union Address which included proposals that would increase taxes for certain high income earners to pay for incentives for lower income earners. While not specific, the President also called for closing loopholes for certain corporations and he also took a shot at lobbyists for rigging� the tax code.

 


Family Wealth Services

In addition to the Tax Extender Bill which was approved in December 2014, the President signed the Achieving a Better Life Experience Act (ABLE) of 2014 which will be effective in 2015.

 


Tax Flash

On January 12, 2015 New York City Mayor Bill de Blasio announced proposals to reform the City's corporate tax structure to achieve consistency with the New York State law changes which were passed in the State budget last year.

 


Tax Flash

The IRS has recently issued new Publication 5187 (Health Care Law: What's New for Individuals and Families) to cover some of the tax provisions of the Affordable Care Act (ACA). The Publication also explains how taxpayers satisfy the individual shared responsibility provisions (ISR) of the ACA. These provisions will result in complex calculations, and new tax return entries.

 

 
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