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Tuesday, September 2, 2014

CCH Weekly Report from Washington, D.C. (Sept. 2, 2014)

CCH Weekly Report from Washington, D.C. (Sept. 2, 2014)

During the week of August 25, the CBO released its updated budget and economic outlook, the House Oversight Committee continued to call for a special counsel to investigate the IRS, and another possible corporate inversion came to light. Also during the week, the IRS issued a warning regarding a pervasive phone scam, as well as debt straddle rules, the new priority guidance plan, REIT qualification guidance and other pieces of guidance.

If federal tax laws and federal spending remain unchanged in the coming decade, then revenues will not keep up with spending due to health and retirement programs for the aged, the Congressional Budget Office (CBO) said in its updated budget and economic outlook (TAXDAY, 2014/08/28, C.1). According to the report released by CBO director Douglas Elmendorf on August 27, the fiscal year 2014 deficit will amount to $506 billion, which is approximately $170 billion less than the 2013 deficit.

Sen. Jon Tester, D-Mont., chairman of the Senate Subcommittee on the Efficiency and Effectiveness of Federal Programs and the Federal Workforce, called on the Obama administration to focus on Defense Department contractors and employees who have unpaid federal tax liabilities (TAXDAY, 2014/08/28, C.2). Tester said these individuals who hold high security clearances are a threat to national security because of their unpaid tax debts.

House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., faulted that the Justice Department’s (DOJ) investigation into IRS targeting of Tea Party groups, and called for the appointment of a special counsel to investigate the Service (TAXDAY, 2014/08/27, C.1).

House Ways and Means ranking member Sander Levin, D-Mich., said the proposed merger between Burger King and Canadian food chain Tim Hortons Inc., highlights the need for Congress to act on legislation to diminish the incentives for corporate inversions (TAXDAY, 2014/08/27, C.2). Burger King executives defended the company’s planned merger, telling reporters on August 26 that the companies are seeking to expand international growth, not cut taxes through a corporate inversion.


FATCA IGA. The United States has reached a new Model 1 intergovernmental agreement with the Republic of Lithuania to implement the provisions of the Foreign Account Tax Compliance Act (FATCA) (TAXDAY, 2014/08/28, T.1). The agreement addresses the parties’ obligations to obtain and exchange information regarding reportable accounts, the time and manner for exchanging information, the application of FATCA to financial institutions in Lithuania, collaboration on compliance and enforcement, and consistency in the application of FATCA to partner jurisdictions.

TIGTA Report. The Treasury Inspector General of Tax Administration (TIGTA) reported that improvements are needed to the IRS External Leads Program, which receives leads from partner organizations about questionable tax refunds, to allow the IRS to more timely verify leads with their external partners (Ref. No.: 2014-40-057; TAXDAY, 2014/08/27, T.2). TIGTA recommended that the IRS establish more consistent time frames to verify leads based on analysis of current and historical lead data.


Phone Scam Tips. The IRS has issued a consumer alert providing taxpayers with tips to protect themselves from telephone scam artists calling and pretending to be with the IRS (IR-2014-84; TAXDAY, 2014/08/29, I.1).

Draft PPACA Forms. The IRS has released draft instructions for Forms 1095-A, 1094-B, 1095-B, 1094-C and 1095-C that will be used for reporting medical care coverage under the Patient Protection and Affordable Care Act (PPACA) (TAXDAY, 2014/08/29, I.4). Form 1095-A, Health Insurance Marketplace Statement, is used to report information about family members who enroll in a qualified health plan through the Marketplace. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is used by employers with 50 or more full-time employees to report the information required under Code SecS. 6055 and 6056 about offers of health care coverage and enrollment in health care coverage for their employees. Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, must be used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS.

Debt Straddle Rules. Final regulations were issued under Code Sec. 1092, relating to the application of the straddle rules to a debt instrument (T.D. 9691; TAXDAY, 2014/08/27, I.1). The final regulations clarify that a taxpayer’s obligation under a debt instrument can be a position in actively traded personal property that is part of a straddle.

Priority Guidance Plan. The IRS has released the 2014-2015 Priority Guidance Plan. The plan contains 317 projects that are priorities for allocation of IRS resources offices during the 12-month period from July 2014 through June 2015 (TAXDAY, 2014/08/27, I.4). The IRS has also released its fourth-quarter update to the 2013-2014 Priority Guidance Plan, which includes eight additional projects.

Highway Use Tax. Owners of heavy highway vehicles were reminded that the federal highway use tax return is due on September 2, 2014 (IR-2014-82; TAXDAY, 2014/08/25, I.2). The September 2 due date generally applies to Form 2290 and the accompanying tax payment for the tax year that begins on July 1, 2014, and ends on June 30, 2015.

REIT Qualification Guidance. The IRS has provided guidance regarding aspects of a taxpayer’s qualification as a real estate investment trust (REIT) in the context of transactions involving debt secured by real estate the fair market value of which has declined (Rev. Proc. 2014-51; TAXDAY, 2014/08/25, I.4).

Contraceptive Coverage Guidance. The Departments of Health and Human Services (HHS), Labor (DOL), and Treasury have responded to two recent Supreme Court rulings by issuing interim final and identical proposed regulations allowing an alternative to the use of EBSA Form 700 (T.D. 9690; NPRM REG-129507-14; NPRM REG-129786-14; TAXDAY, 2014/08/25, I.5). They are also issuing proposed regulations that would extend the current religious employer accommodation for nonprofits to certain closely held for-profit entities.

Friday, August 29, 2014

Sorting through the Affordable Care Act, including the Health Care Reform Library and New ACA Webinars

Sorting through the Affordable Care Act

Your clients are relying on you to answer questions like:
•  Do I qualify for the new Premium Tax Credit?
•  Am I exempt?
•  Am I meeting the requirements of the new law?
Be your clients' hero with our Health Care Reform Library. You'll have access to a one-stop, comprehensive solution with explanations, analysis, client letters, decision trees, and other practice aids. Learn More
NEW ACA Webinar dates added

Be prepared to advise your clients on the myriad of compliance issues under this complex law.

Two new webinars have been added to our upcoming schedule:
Affordable Care Act: Understanding the Individual and Employer Mandates
Friday, Sept. 26 at 1 p.m. Eastern
Learn More
Affordable Care Act: Understanding and Avoiding the New Tax Penalties
Wednesday, Sept. 10 at 1 p.m. Eastern
Learn More
Don't pay full price
Browse the online catalog of CCH books including the U.S. Master Tax Guide, 2015 here
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The data provided includes information from the powerfulIntelliConnect tax and accounting research platform. Read More

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Thursday, August 28, 2014

Labor Day Holiday Closings and Transmission Schedules

We wish you an enjoyable Labor Day holiday! All CCH Small Firm Services offices will be closed Monday, September 1, in observance of the Labor Day holiday.

Most agencies are not processing efiles over the holiday weekend. Therefore, CCH SFS will stop transmissions to all agencies Friday August 29th at 6pm. EROs may continue sending efiles to us, but we will hold those until transmissions resume Tuesday morning, September 2nd. 

Tuesday, August 26, 2014

Get your FREE "Understanding the Affordable Care Act Premium Tax Credit Guide" here.

Get your FREE Understanding the Affordable Care Act Premium Tax Credit Guide

click  here.

Don't let clients be surprised by ACA penalties. With our new and authoritative ACA resources, you will be ready to answer your clients' questions and ensure compliance.

Be sure to contact your Account Manager at 800-495-4626 for more information about the ACA resources available         

Monday, August 25, 2014

CCH Weekly Report from Washington, D.C.,(Aug. 25, 2014)

CCH Weekly Report from Washington, D.C.,(Aug. 25, 2014)

It was a quiet week on Capitol Hill as the August congressional recess continues, although a group of senators pointed out the need for a clear overview of federal tax incentives targeted at higher education and House Budget Committee Chairman Paul Ryan expressed his opinion that the tax deduction for charitable contributions should not be changed. The IRS issued guidance in several areas, including the low-income housing credit, exempt facility bonds, Puerto Rico pension plans and the September AFRs.


The tax deductibility of charitable donations made by affluent Americans should not be changed, according to House Budget Committee Chairman Paul Ryan, R-Wis. (TAXDAY, 2014/08/22, C.1). Speaking on the CNBC program "Squawk Box" on August 20, Ryan stated that the charitable donation deduction should be reformed in order to entice more people to give before the April 15th tax filing deadline.

College students and their families need a clear overview of federal tax incentives targeted at higher education, a group of 12 U.S. senators said in an August 18 letter to the Departments of Treasury and Education (TAXDAY, 2014/08/20, C.1). In the effort led by Sen. Debbie Stabenow, D-Mich., the senators asked that the Obama administration create a simple-to-understand guide to education tax benefits and that students be informed of their estimated tax benefits when filing out federal student aid forms.


U.S.-Sweden FATCA Agreement. The United States has reached a new Model 1 type intergovernmental agreement with Sweden to implement the provisions of the Foreign Account Tax Compliance Act (FATCA) (TAXDAY, 2014/08/22, T.1). The agreement addresses the parties’ obligations to obtain and exchange information regarding reportable accounts, the time and manner for exchanging information, the application of FATCA to financial institutions in Sweden, collaboration on compliance and enforcement, and consistency in the application of FATCA to partner jurisdictions.

Medical Device Tax. The Treasury Inspector General for Tax Administration (TIGTA) reported that the IRS needs to improve the accurate reporting and payment of the 2.3-percent medical device excise tax (Ref. No.: 2014-43-043; TAXDAY, 2014/08/20, T.1). As of January 1, 2013, manufacturers, producers and importers became responsible for the collection of the tax and filing of Form 720, Quarterly Federal Excise Tax Return. TIGTA found that the number of Forms 720 filed reporting the medical device excise tax and the revenue reported were lower than the Joint Committee on Taxation had originally estimated.

Corporate Inversions. Do not expect a quick solution to the growing problem of corporate inversions, a spokesman for the Treasury Department said on August 18 (TAXDAY, 2014/08/19, T.1). "The issues are complex, so the work will not be done in a week or two. Nonetheless, the secretary is hoping to have recommendations from his team in the near future," stated the spokesman.


Statistics of Income. The IRS Statistics of Income (SOI) Division announced the availability of Statistics of Income—2012, Individual Income Tax Returns Complete Report (Publication 1304) (IR-2014-83; TAXDAY, 2014/08/25, I.3). The report discusses changes in tax law for 2012 and includes many statistical tables, broken down and grouped by type of returns filed, sources of income, exemptions and itemized deductions, and tax computation.

IMRS. Practitioners and industry organizations representing small business and self-employed (SBSE) taxpayers can report systemic and practice issues to the issue management resolution system (IMRS) maintained by the IRS Stakeholder Liaison (SL) (TAXDAY, 2014/08/22, I.3). SL official Yolanda Ruiz provided an update on August 21 on the IMRS, including practical tips and updates on hot topics.

Low-Income Housing Tax Credit. The IRS has revised guidance that provides temporary relief for agencies and owners from various requirements relating to the low-income housing credit for projects located in major disaster areas, i.e., areas for which a major disaster has been declared by the president and designated by the Federal Emergency Management Agency (FEMA) as eligible for assistance (Rev. Proc. 2014-49; TAXDAY, 2014/08/22, I.4). The updated guidance also provides emergency housing relief for individuals who are displaced by a major disaster from their principal residences in certain major disaster areas.

Exempt Facility Bonds. A new revenue procedure is intended to facilitate emergency housing relief after major disasters by providing temporary relief from certain exempt facility bond requirements for qualified residential rental projects (Rev. Proc. 2014-50; TAXDAY, 2014/08/22, I.5). The procedure authorizes, but does not require, bond project operators to provide emergency housing to displaced individuals during a temporary housing period.

Puerto Rico Pension Plans. The IRS ruled that trusts of pension plans qualified only under the Puerto Rico tax code may participate in 81-100 group trusts (Rev. Rul. 2014-24; TAXDAY, 2014/08/22, I.6). The ruling also clarifies that assets held by certain separate accounts maintained by insurance companies may be invested in 81-100 group trusts and provides limited transition relief.

Fraternal Beneficiary Societies. As part of the overall IRS outreach to practitioners, IRS tax law specialists discussed the basics of two types of tax-exempt "fraternal" organizations during an August 21, 2014, phone forum (TAXDAY, 2014/08/22, I.9).

Budget Cuts. The IRS has been operating under tight budgetary constraints in recent years, IRS Commissioner John Koskinen told practitioners (TAXDAY, 2014/08/22, I.10). The Service has also been affected by sequestration.

September 2014 AFRs. The IRS has prescribed various rates for federal income tax purposes for September 2014 (Rev. Rul. 2014-22; TAXDAY, 2014/08/21, I.1).

Whistleblower Memorandum. The Deputy Commissioner for Services and Enforcement, John M. Dalrymple, has issued a memorandum on the review of the IRS whistleblower program (TAXDAY, 2014/08/21, I.3). The object of the review was to improve the timeliness and quality of decisions as the IRS evaluates and acts on whistleblower information.

Reproduction/Substitute Returns. The IRS has provided the specifications for the private printing of red-ink substitutes for the 2014 revisions of information returns, preparing acceptable substitutes of the official forms, and using official or acceptable substitute forms to furnish information to recipients (Rev. Proc. 2014-44; TAXDAY, 2014/08/19, I.1). The procedures cover Forms 1096, 1097-BTC, 1098 series, 1099 series, 3921, 3922, 5498 series, W-2G and 1042-S.

Farm Special Use Value. A listing of the average annual effective interest rates on new loans under the Farm Credit System has been issued by the IRS (Rev. Rul. 2014-21; TAXDAY, 2014/08/18, I.1). The rates are used in computing the special use value of farm real property for which an election is made under Code Sec. 2032A.

By Stephen K. Cooper and Jennifer Cordaro, CCH News Staff

Friday, August 22, 2014

Georgia acks delayed

The Georgia Electronic Services Group notified vendors this week that acks are delayed a bit.
You could have acks outstanding since August 14th.
The state expects to be caught up by Monday, August 25th.

Research specific return SSN and EINs by using the Return Query tool on the support site. Login, enter the SSN or EIN, and view efile information directly from our Electronic Filing Center database (EFC).
If you can view the return information, and it shows 'awaiting ack', then no action is needed.  
If no information is found, please refile the electronic return.

TaxWise Customer Care Bulletin – Upcoming e-file deadlines

Upcoming e-File Deadlines
September 15th is the e-file deadline for the following returns:

•  Form 1120
•  Form 1120S
•  Form 1041
•  Form 1065

View the e-File Calendar
e-Filing a Return Previously on Extension
When you e-filed the extension, you selected an extension checkbox in the PIN information section of the Main Information sheet. Now that you are ready to send the completed return, you will need to clear that extension checkbox.

To do this, select the income tax return checkbox in this section of the Main Information sheet when you are ready to e-file. TaxWise clears the extension check box. Enter therequired PIN information before creating the e-file for the return.

Learn more about e-filing an extension
Best practices for Domestic Partner/
Civil Union Returns
Need help navigating Domestic Partner/Civil Union Returnsin TaxWise? We have mapped out some of the best practices for preparing these returns in our software. This information is at your fingertips in the Help files in TaxWise. Push F1 to access Help, scroll down to the chapter titled "Preparing returns" and choose the subchapter titled “Best Practices for Domestic Partner/Civil Union returns.” The information is also found in our Knowledge Library at Answer ID 13853

Quick Reference Guide
Need help entering your 1040 data? Download our Form 1040 Quick Reference Guide from the TaxWise Solution Center. 
Get it here
Stay Up-To-Date with the TaxWise Blog
Check the TaxWise Blog often to stay up-to-date with software, IRS and industry news. The blog is updated continously, so you will never miss news that you need to know.
Go there now
Backup Your Returns
Have you backed up your returns since the end of tax season? If not, there is no better time than now. You will find instructions in the Knowledge Library, Answer ID 1578. Go there now
Extended and Late Returns
Remember to keep TaxWise up-to-date as you prepare and e-file extended and late returns. You can easily check for updates using Get Program Updates and Get Module Updates on the Communications menu. Or download updates from theTaxWise Solution Center.

Thursday, August 21, 2014

28.09 Update available, activates Client Organizers and provides other changes

The 28.09 update is available for download now
From inside your TaxWise software, access the COMMUNICATIONS menu, "Get Program Updates"  or download from the Customer Support Site.

28.09 incorporates two changes made in an internal 28.08 build, meaning you will go from version 28.07 directly to version 28.09 when you update.

28.09 Release Notes
Corrections to Acceptance Summary Report: TaxWise has made corrections to the Acceptance Summary Report so that it now shows the correct Type in the report.

28.09 is the End of Season Release: Version 28.09 is the last version that TaxWise will release for the primary e-file season. This version will also become the End of Season CD. Check the Customer Support Site for updated Individual and Business States and updated modules or access the COMMUNICATIONS menu, "Get Module Updates" to check for updates. 

Client Organizers: The Client Organizers have been enabled for TaxWise 2013 to help collect information for your tax year 2014 clients.

28.08 Release Notes
Changes to Client Letter for State ACH Debit:  TaxWise has made changes so that ACH Debits for state returns are now correctly displayed in the Client Letter.

Various Changes for State Electronic Filing:  TaxWise has made several changes to correct issues with state electronic filing.

Monday, August 18, 2014

CCH Weekly Report from Washington, D.C.,(Aug. 18, 2014)

CCH Weekly Report from Washington, D.C.,(Aug. 18, 2014)

The usually quiet month of August in Congress has been busy with almost daily announcements by lawmakers on corporate inversions. Leading Democrats called for Congress to curb or eliminate corporate inversions and urged President Obama to take executive action. The senior Republican on the Senate Finance Committee (SFC) linked inversion legislation to the broader goal of tax reform. The Treasury Inspector General for Tax Administration (TIGTA) warned that some IRS contractors had access to taxpayer information without having completed background investigations. Meanwhile, the IRS issued final regulations on the retail method of accounting. The IRS also reported that taxpayers continue to fall victim to telephone scams.


SFC Chairman Ron Wyden, D-Ore., predicted that comprehensive inversion legislation will be introduced in September (TAXDAY, 2014/08/15, C.1). Wyden also welcomed a proposal by Sen. Charles E. Schumer, D-N.Y., to reform the earnings stripping rules. Schumer said his proposal could be part of SFC inversion legislation. Additionally, Wyden said he is in discussions with SFC ranking member Orrin G. Hatch, R-Utah, about inversions. Hatch said on August 14 that inversion legislation should be a stepping-stone to reform of the tax code (TAXDAY, 2014/08/18, C.1). A group of Senate Democrats also urged President Obama to take executive action to the maximum extent possible to deny federal contracts to inverted corporations (TAXDAY, 2014/08/14, C.2).

In other news from Congress, a bipartisan bill was introduced to exempt students employed by their college or university from the Patient Protection and Affordable Care Act’s (PPACA) (P.L. 111-148) employer mandate (TAXDAY, 2014/08/14, C.1).


IRS Contractors. Some IRS contractors without the appropriate background investigation had access to taxpayer information, TIGTA found (Ref. No.: 2014-10-037; TAXDAY, 2014/08/15, T.1). According to TIGTA, taxpayer information may be at risk because of a lack of background investigations in contracts for courier, printing and other services.

Exempt Organizations. TIGTA urged the Service to improve its oversight of payroll tax compliance by tax-exempt organizations (Ref. No.: 2014-10-012; TAXDAY, 2014/08/14, T.1). TIGTA discovered that 25 exempt organizations failed to remit payroll and other taxes, totaling more than $25 million.

Criminal Investigation. The IRS Office of Criminal Investigation (CI) has adequate controls in place to ensure compliance with federal laws prohibiting any person convicted of a domestic violence offense from possessing guns or ammunition, TIGTA reported (Ref. No.: 2014-IE-R008; TAXDAY, 2014/08/13, T.1).


Retail Method. The IRS released final regulations on the retail inventory method of accounting (T.D. 9688; TAXDAY, 2014/08/15, I.1). The Service also issued procedures for taxpayers to obtain automatic consent to change a method of accounting (Rev. Proc. 2014-48; TAXDAY, 2014/08/18, I.3).

MACRS. The Service also issued final regulations relating to dispositions of modified accelerated cost recovery (MACRS) property and accounting for property in MACRS general asset accounts (T.D. 9689; TAXDAY, 2014/08/15, I.2).

Telephone Scams. Approximately 90,000 taxpayers have complained to TIGTA about telephone scams from con artists impersonating IRS employees (IR-2014-81; TAXDAY, 2014/08/14, I.2). The Service reported that some 1,100 taxpayers suffered an estimated $5 million in losses.

Taxpayer Bill of Rights. Updated editions of Publication 1, Your Rights as a Taxpayer, are now available on the IRS website in English, Chinese, Korean, Russian, Spanish and Vietnamese (IR-2014-80; TAXDAY, 2014/08/13, I.3). The Service is highlighting the new Taxpayer Bill of Rights.

By George L. Yaksick, Jr., CCH News Staff

Friday, August 15, 2014

Save on your 2015 CCH Books; also New ACA Webinar dates added

CCH Summer Book Sale
Don't pay full price later. Pre-order your tax resources now and save 15% on U.S. Master Tax Guide®, 2015 and other new editions. They will be shipped to you as soon as they are published. Order your copies today.

Browse the online summer catalog
NEW ACA Webinar dates added
Are ready to answer your clients' Affordable Care Act questions and help them avoid penalties? It is critical to prepare now to help clients understand the penalties that could leave them upset when they find their tax refunds are being reduced by these penalties. With ACA Webinars from the experts at CCH, you will be prepared to advise your clients' on the myriad of compliance issues under this complex law. 

Two new webinars have been added to our upcoming schedule:

Affordable Care Act: Understanding and Avoiding the New Tax Penalties
Wednesday, Sept. 10 at 1 p.m. Eastern
Learn More 

Affordable Care Act: Understanding the Individual and Employer Mandates
Friday, Sept. 26 at 1 p.m. Eastern
Learn More

ExamMatrix EA Exam Review
Do what thousands of successful Enrolled Agents have done and prepare effectively and efficiently with this exam review course.Receive a $100 discount if you order before August 31st. Call your Account Manager for details.
Complimentary TaxWise Software Webinars
Do you need current training on your TaxWise software? We are offering a series of complimentary webinars during the summer. Click the link below to view available webinars, dates and times.Register Here
IRS Representation Certification
Get certified to represent your clients before the IRS. 
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