Jeffrey M. Rosenblum, P.C.
A Fresh Start

Posts tagged "taxpayer"

IRS has collected more than $8 billion from offshore voluntary disclosure program

The IRS reminded U.S. taxpayers today that with more than 54,000 taxpayers coming in to participate in offshore disclosure programs since 2009, U.S. taxpayers with undisclosed offshore accounts should strongly consider existing paths established to come into full compliance with their federal tax obligations.
Both the Offshore Voluntary Disclosure Program (OVDP) and the streamlined procedures enable taxpayers to correct prior omissions and meet their federal tax obligations while mitigating the potential penalties of continued non-compliance. There are also separate procedures for those who have paid their income taxes but omitted certain other information returns. "The groundbreaking effort around automatic reporting of foreign accounts has given us a much stronger hand in fighting tax evasion," said IRS Commissioner John Koskinen. "People with undisclosed foreign accounts should carefully consider their options and use available avenues, including the offshore program and streamlined procedures, to come back into full compliance with their tax obligations."

IRS clarifies application of one-per-year limit on IRA rollovers, allows owners of multiple IRAs a fresh start in 2015

The Internal Revenue Service today issued guidance clarifying the impact a 2014 individual retirement arrangement (IRA) rollover has on the one-per-year limit imposed by the Internal Revenue Code on tax-free rollovers between IRAs. The clarification relates to a change, announced earlier this year, in the way the statutory one-per-year limit applies to rollovers between IRAs. The change in the application of the one-per-year limit reflects an interpretation by the U.S. Tax Court in a January 2014 decision applying the limit to preclude an individual from making more than one tax-free rollover in any one-year period, even if the rollovers involve different IRAs. Before 2015, the one-per-year limit applies only on an IRA-by-IRA basis (that is, only to rollovers involving the same IRAs). Beginning in 2015, the limit will apply by aggregating all an individual's IRAs, effectively treating them as if they were one IRA for purposes of applying the limit.

IRS announces 2015 pension plan limitations; Taxpayers may contribute up to $18,000 to their 401(k) plans in 2015

The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment. Highlights include the following:

Tax Court Rules Homebuilders Could Apply Completed Contract Method Considering Common Improvement Costs of Entire Housing Development

"In Shea v. Commissioner the U.S. Tax Court decided in favor of the taxpayer, a developer of planned residential communities, and allowed the taxpayer to defer the recognition of income from the sale of homes under its completed contract method of accounting for long-term home construction contracts until 95% of the costs of the development were incurred. That is, in applying the "95% completion" test, the subject matter of the contract was considered to be the entire development or phase of a larger development and not each individual house and lot. Thus, the allocable costs attributable to the subject matter of each contract included the costs of common improvements and amenities of the development, in addition to the costs of the house and lot. This decision addresses a long-standing controversy in this area and could help other builders and developers that currently are using the completed contract method to defer income related to home construction projects."

New 1023-EZ Form Makes Applying for 501(c)(3) Tax-Exempt Status Easier

New 1023-EZ Form Makes Applying for 501(c)(3) Tax-Exempt Status Easier; Most Charities Qualify WASHINGTON -- The Internal Revenue Service today introduced a new, shorter application form to help small charities apply for 501(c)(3) tax-exempt status more easily.

IRS Announces Simplified Option for Claiming Home Office Deduction; Eligible Home-Based Businesses May Deduct up to $1,500

The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes. The new simplified option is available starting with the 2013 return most taxpayers file early in 2014.The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet.The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions.

The Taxpayer Advocate Service (TAS)

The Taxpayer Advocate Service (TAS) is designed to be a "safety net" for taxpayers who are experiencing problems with the IRS. However, because the TAS has been inundated with requests from six million to 12 million taxpayers who may be having problems at any given time, TAS recently stated "we need to focus on cases where we can add the most value. These tend to fall into four categories. 1. Where a taxpayer is experiencing some financial difficulty, emergency, or hardship, and the IRS needs to move much faster than it usually does (or even can) under its normal procedures. In those cases, time is of the essence. If the IRS doesn't act quickly (for example, to remove a levy or release a lien), the taxpayer will experience even more financial harm. 2. Where many different IRS units and steps are involved, and the case needs a "coordinator" or "traffic cop" to make sure everyone does their part. TAS plays that role. 3. Where the taxpayer has tried to resolve a problem through normal IRS channels but those channels have broken down. 4. Where the taxpayer is presenting unique facts or issues (including legal issues), and the IRS is applying a "one size fits all" approach, isn't listening to the taxpayer, or doesn't recognize that it needs new guidance for those circumstances. Last year, TAS assessed where its efforts have the greatest impact, and identified four types of issues in which the TAS seemed to get the right answer. Those cases involve the processing of original tax returns, amended returns, rejected and unpostable returns, and injured (but not innocent) spouse claims. We determined that TAS generally won't accept cases involving these pure processing issues so we could focus on higher-impact problems. However, there are many exceptions to this policy. If the taxpayer is suffering an economic burden, TAS will take the case. If the case involves other issues, as in the example below, TAS will take the case. If the taxpayer is referred by a congressional office, TAS will take the case. And if the taxpayer specifically requests and insists, TAS will take the case. "Finally, the IRS through the TAS provided several examples of the kinds of cases that TAS will and won't accept.
"Example 1:
A taxpayer has more than one issue. The normal processing time for an amended return is approximately eight to 12 weeks. The taxpayer filed a 2010 Form 1040X more than four months ago expecting a refund, but also has an outstanding balance for tax year 2009 and is receiving IRS collection notices. The 2010 refund would pay the balance in full and leave a small amount for the taxpayer. TAS will accept the inquiry and establish a case because expediting the processing will resolve a collection issue. Example 2: Single issue. The taxpayer filed a 2010 Form 1040X more than four months ago expecting a refund but this time has no audit or collection issues and is not facing an economic burden. TAS won't open a case, but instead will refer the matter to the appropriate IRS unit. "