IRS Offers New Tax Guide to Help Prepare 2013 Taxes

 

The Internal Revenue Service has published a newly revised comprehensive tax guide on IRS.gov to help taxpayers get the most out of various tax benefits. However, the IRS is discontinuing its printed wall calendar listing various tax due dates.

Publication 17, Your Federal Income Tax, features details on taking advantage of a wide range of tax-saving opportunities, such as the American Opportunity Tax Credit for parents and college students, and the Child Tax Credit and Earned Income Tax Credit for low- and moderate-income workers. It also includes a rundown on tax changes for 2013 including information on revised tax rates and new limits on various tax benefits for some taxpayers.  This useful 292-page guide also provides thousands of interactive links to help taxpayers quickly get answers to their questions

Publication 17 has been published annually by the IRS since the 1940s and has been available on the IRS web site since 1996. As in prior years, this publication is packed with basic tax-filing information and tips on what income to report and how to report it, figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and using IRAs to save for retirement.

 

Besides Publication 17, IRS.gov offers many other resources for those doing year-end tax planning. Many 2013 forms are already posted, and updated versions of other forms, instructions and publications are being posted almost every day. Forms already available include Form 1040 and short Forms 1040A and1040EZ.

For tax professionals, the IRS also recently released the latest edition of its tax calendars in Publication 509, listing the due dates for various individual and business tax forms. However, according to a reader of Accounting Today, the IRS has discontinued the printed wall calendar that used to list the due dates on the pages of each month.

The IRS noted on the cover of Publication 509 that Publication 1518, IRS Tax Calendar for Small 
Businesses and Self-Employed, has been discontinued after 2013. However, the IRS said that an IRS Tax Calendar and most of the information previously contained in Publication 1518 can be found atwww.irs.gov/taxcalendar. The calendar dates can be imported into a user's own calendar sofware through the IRS CalendarConnector, and users can also subscribe to the IRS's Small Businesses Calendar through Outlook 2007 or 2010, or Mac iCal.

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Shutdown for Business Modernized e-File (MeF)

Subject:  Shutdown for Business Modernized e-File (MeF)

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Attention: (MeF) Participants - Transmitters, Software Developers, Practitioners and States To ensure that all BMF tax returns e-filed through the Modernized e-File (MeF) system are processed timely, the following MeF Production shutdown/cut over and acknowledgment retrieval schedule has been established. It is imperative that everyone adhere to the schedule shown below. Business MeF Production Shutdown/Cut Over Schedule Shutdown is scheduled to begin on Thursday, December 26, 2013 in order to prepare the system for the upcoming 2014 Filing Season. A QuickAlert will be issued once the BMF start up date for the 2014 Filing Season has been finalized. Important Note: States who schedule retrieval of their state submissions may have to change their schedule in order to retrieve submissions in time to validate returns and submit acknowledgements by 11:30 a.m., Eastern on December 26th. Anything not retrieved thru MeF by 11:59 a.m. on December 26th cannot be accessed again until MeF reopens for Production in January 2014. Shutdown Deadlines on Thursday, December 26, 2013 Eastern Time                   Transmitters:       Transmitting Submissions (State & Federal)        10:00 a.m.       Retrieving Acknowledgements                           11:59 a.m. States:       Transmitting Acknowledgements                        11:30 a.m.                                                                                                                                                            MeF Assurance Testing System (ATS) Schedule ATS will remain open throughout this production shutdown/cut over period (12/26/2013 - 01/2014). Please monitor the MeF Status Page for any updates.  We apologize for any inconveniences and thank you for your cooperation.

IRPAC Issues Annual Report for 2013

IRPAC Issues Annual Report for 2013

WASHINGTON — The Information Reporting Program Advisory Committee (IRPAC) today released its annual report for 2013, including numerous recommendations to the Commissioner of Internal Revenue on new and existing issues in tax administration.

“In their report, IRPAC members provide valuable feedback to the IRS on a wide range of information reporting issues,” IRS Acting Commissioner Danny Werfel said. “Committee members have graciously offered their time and expertise. The IRS will carefully consider their recommendations.”

In the 2013 report, IRPAC recommends that IRS:

• Extend truncation of taxpayer identification numbers (TINs) to employer identification numbers (EINs)
• Expand the TIN matching program to permit matching on a greater number of return types
• Improve instructions to reduce errors on Form 1099-MISC and
• Provide additional guidance with regard to merchant card reporting on Form 1099-K

The committee also commented on cost basis reporting for debt instruments, specifically addressing requirements, practices and capabilities for reporting market premium and discount. There are also extensive discussions of reporting requirements under the Foreign Account Tax Compliance Act (FATCA) and the Affordable Care Act.

The full 2013 IRPAC Public Report is available on IRS.gov.
IRPAC is a federal advisory committee that provides an organized public forum for discussion of information reporting issues. It is comprised of a diverse cross-section of individuals drawn from the tax professional community, financial institutions, small and large businesses, universities and colleges, and securities and payroll firms

IRS to Employers: Hire Veterans by Dec. 31 and Save on Taxes

IRS to Employers: Hire Veterans by Dec. 31 and Save on Taxes

If you plan to hire soon, consider hiring veterans. If you do, you may be able to claim the federal Work Opportunity Tax Credit worth thousands of dollars.

You must act soon. The WOTC is available to employers that hire qualified veterans before the new year.

Here are six key facts about the WOTC:

1. Hiring Deadline.  Employers hiring qualified veterans before Jan. 1, 2014, may be able to claim the WOTC. The credit was set to expire at the end of 2012. The American Taxpayer Relief Act of 2012 extended it for one year.

2. Maximum Credit.  The tax credit limit is $9,600 per worker for employers that operate a taxable business. The limit for tax-exempt employers is $6,240 per worker.

3. Credit Factors.  The credit amount depends on a number of factors. They include the length of time a veteran was unemployed, the number of hours worked and the amount of the wages paid during the first year of employment.

4. Disabled Veterans.  Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.

5. State Certification.  Employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. They must file the form within 28 days after the qualified veteran starts work. For more information, visit the U.S. Department of Labor’s WOTC website.

6. E-file.  Some states accept Form 8850 electronically.

For more about this topic, visit IRS.gov and enter ‘WOTC’ in the search box.


Additional IRS Resources:

• Work Opportunity Tax Credit Extended
• Work Opportunity Tax Credit - Frequently Asked Questions and Answers
• Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit

IRS Will Issue Proposed Guidance for Tax-Exempt Social Welfare Organizations

Treasury, IRS Will Issue Proposed Guidance for Tax-Exempt Social Welfare Organizations

Initial Proposed Guidance Clarifies Qualification Requirements and Seeks Public Input

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service today will issue initial guidance regarding qualification requirements for tax-exemption as a social welfare organization under section 501(c)(4) of the Internal Revenue Code. This proposed guidance defines the term “candidate-related political activity,” and would amend current regulations by indicating that the promotion of social welfare does not include this type of activity. The proposed guidance also seeks initial comments on other aspects of the qualification requirements, including what proportion of a 501(c)(4) organization’s activities must promote social welfare.

The proposed guidance is expected to be posted on the Federal Register later today.

There are a number of steps in the regulatory process that must be taken before any final guidance can be issued. Given the significant public interest in these and related issues, Treasury and the IRS expect to receive a large number of comments. Treasury and the IRS are committed to carefully and comprehensively considering all of the comments received before issuing additional proposed guidance or final rules.

“This is part of ongoing efforts within the IRS that are improving our work in the tax-exempt area,” said IRS Acting Commissioner Danny Werfel. “Once final, this proposed guidance will continue moving us forward and provide clarity for this important segment of exempt organizations.”

“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by tax-exempt social welfare organizations,” said Treasury Assistant Secretary for Tax Policy Mark J. Mazur. “We are committed to getting this right before issuing final guidance that may affect a broad group of organizations. It will take time to work through the regulatory process and carefully consider all public feedback as we strive to ensure that the standards for tax-exemption are clear and can be applied consistently.”

Organizations may apply for tax-exempt status under section 501(c)(4) of the tax code if they operate to promote social welfare. The IRS currently applies a “facts and circumstances” test to determine whether an organization is engaged in political campaign activities that do not promote social welfare. Today’s proposed guidance would reduce the need to conduct fact-intensive inquiries by replacing this test with more definitive rules.

In defining the new term, “candidate-related political activity,” Treasury and the IRS drew upon existing definitions of political activity under federal and state campaign finance laws, other IRS provisions, as well as suggestions made in unsolicited public comments.

Under the proposed guidelines, candidate-related political activity includes:

1. Communications

• Communications that expressly advocate for a clearly identified political candidate or candidates of a political party.
• Communications that are made within 60 days of a general election (or within 30 days of a primary election) and clearly identify a candidate or political party.
• Communications expenditures that must be reported to the Federal Election Commission.

2. Grants and Contributions

• Any contribution that is recognized under campaign finance law as a reportable contribution.
• Grants to section 527 political organizations and other tax-exempt organizations that conduct candidate-related political activities (note that a grantor can rely on a written certification from a grantee stating that it does not engage in, and will not use grant funds for, candidate-related political activity).

3. Activities Closely Related to Elections or Candidates

• Voter registration drives and “get-out-the-vote” drives.
• Distribution of any material prepared by or on behalf of a candidate or by a section 527 political organization.
• Preparation or distribution of voter guides that refer to candidates (or, in a general election, to political parties).
• Holding an event within 60 days of a general election (or within 30 days of a primary election) at which a candidate appears as part of the program.

These proposed rules reduce the need to conduct fact-intensive inquiries, including inquiries into whether activities or communications are neutral and unbiased.

Treasury and the IRS are planning to issue additional guidance that will address other issues relating to the standards for tax exemption under section 501(c)(4). In particular, there has been considerable public focus regarding the proportion of a section 501(c)(4) organization’s activities that must promote social welfare. Due to the importance of this aspect of the regulation, the proposed guidance requests initial comments on this issue.

The proposed guidance also seeks comments regarding whether standards similar to those proposed today should be adopted to define the political activities that do not further the tax-exempt purposes of other tax-exempt organizations and to promote consistent definitions across the tax-exempt sector.

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