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Tag >> IRS
Apr 06

IRS audits of executive compensation: Infractions to avoid

Posted by annearf in TaxIRSexecutive compensationcompliance


With April 15 rearing its ugly head, it seems a good time to consider the Internal Revenue Service's moves to target executive compensation.

Last year, the IRS revealed it was launching a stepped-up effort to investigate executive comp practices.  With that in mind, it looks like there are a number of areas attracting or that are likely to attract IRS attention, according to John Lowell, a compensation expert in Woodstock, Ga.,  and Stephen Saxon, an employee benefits expert with Groom Law Group.

Jan 31

Health care tax credit can help SMBs

Posted by Karen1 in SMBIRSCBOAffordable Care Act


Even as the Patient Protection and Affordable Care Act - AKA the Healthcare Bill - has now been declared void by a federal judge in Florida, the White House is trying to reach small business owners to let them know of several features of interest. A blog post on the US Treasury's website from late January includes a letter from Treasury Secretary Tim Geithner that describes the Small Business Health Care Tax Credit. The Congressional Budget Office estimates that this provision will provide $40 billion over the next 10 years to help eligible small businesses offset the cost of insuring their employees.

Here's how it work: for 2010, the credit typically was available to businesses with up to 25 FTEs, and whose average wages stopped short of $50,000. The employer must have contributed an amount equal to at least 50 percent of the cost of employee-only health insurance, according to the Treasury. The credit covers up to 35 percent of the health insurance premiums a business paid to cover its employees. This rate stays at 35 percent until 2014, when it jumps to 50 percent. Eligible small businesses who provided their employees with insurance last year can claim the credit on their 2010 tax return.

Jan 25

1099 repeal efforts gain traction

Posted by Karen1 in SBANFIBIRS1099


As almost every business owner has heard, the health care bill that passed last year contained a provision that would require companies to issue Form 1099 to individuals and companies from which they buy $600 or more of goods and services in a year.  The provision promised to blanket both small business owners - who would be in the position of sending 1099s to companies like OfficeMax and Dell - and the IRS in paperwork.

Now, the calls to repeal this specific provision are getting louder. Three Democratic senators, Maria Cantwell of Washington, Amy Klobuchar of Minnesota, and Ben Nelson of Nebraska wrote to John Boehner, Speaker of the House, asking him to support H.R. 4, a bill calling for a repeal of this provision of the Health Care Bill. H.R. 4, otherwise known as the Small Business Paperwork Mandate Elimination Act of 2011, was sponsored by Rep. Daniel Lungren, a Republican from California and has 254 co-sponsors.

Nov 23

Cell phone recordkeeping now easier

Posted by Karen1 in taxationSmall Business Jobs ActIRScell phones


Companies of any size that provide their employees with cells phones, Blackberries and the like have something to be thankful for in the Small Business Jobs Act. Section 2043 of the law removes cell phones and other personal digital accessories from what the IRS calls "listed property."

The term "listed property" refers to products, such as phones and cars, which are provided by the employer, but taxable for the employee to the extent that they're used for personal use. In order for employees to avoid including the devices as part of their taxable income, they've had to substantiate the business reason for each phone call or email - an onerous, time-consuming process. Not surprisingly, some employers and employees simply ignored the regulations.

Oct 20

Many concerns over reporting uncertain tax positions

Posted by Stephen Taub in uncertain tax positionsTaxRiskIRSFIN 48

Stephen Taub

Executives have a number of concerns as they gear up to comply with the Internal Revenue Service's new disclosure requirement regarding their uncertain tax positions (UTPs).

According to a survey conducted by KPMG's Tax Governance Institute (TGI), 44 percent of the respondents said their biggest concern was providing the concise description for a disclosed UTP. The IRS defines a UTP as a federal income tax position for which a taxpayer or related party has recorded a reserve in an audited financial statement or for which no reserve was recorded because of an expectation to litigate.

Oct 13

Health plan reporting made easier

Posted by dbedell in IRShealth care reform, employer-sponsored health plan, Department of Treasurycompliance


The IRS announced this week that it would waive W-2 reporting requirements on the cost of coverage for employer-sponsored health plans next year.

This is a welcome relief for companies that were struggling to update systems and understand changed reporting guidelines under Section 9002 of the Patient Protection and Affordable Care Act (PPACA).

Oct 07

Roth conversions just got easier

Posted by Karen1 in Small Business Jobs and Credit ActRoth conversionIRS


The Small Business Jobs and Credit Act packed quite a bit into its 250-some pages. Among other provisions, some of which were outlined in this post from earlier this week, the bill provides a new way for participants in 401(k) and 403(b) plans to convert funds they had contributed pre-tax to their accounts to Roth accounts, while staying within the plan - what's known as "in-plan conversions." Previously,  conversions of funds from a 401(k) or 403(b) plan to a Roth contribution had to take place outside the plan, through a rollover into a Roth IRA.

What's behind the government offering this option in the first place? Several factors likely came into play. For starters, making it easier for participants in 401(k) plans to convert to Roth contributions is an immediate revenue raiser for Uncle Sam, since they'll have to pay taxes on the dollars they convert. That's key, given that most other provisions of the Small Business Jobs Act will reduce the government's coffers.

Oct 05

Small Business Jobs Act can help business save on taxes

Posted by Karen1 in Small Business Jobs and Credit ActIRSbonus depreciation


The Small Business Jobs and Credit Act of 2010, signed into law last month, offers a couple of tax benefits that really can help businesses save money now. The intent of the legislation, not surprisingly, is that the companies will use the funds they save to invest in their operations, spurring growth in the larger economy.

Among the more significant provisions are these:

Sep 21

IRS employment tax audits underway

Posted by Karen1 in tax gapNational Research ProjectIRSemployment taxes


About 2,000 firms around the US have received audit letters from the IRS as part of the agency's Employment Tax National Research Project (NRP). If your firm isn't one of them, you can't breathe easy just yet - the agency has indicated that it include a total of 6,000 firms over three years. What's more, the "examinations will be comprehensive in scope," and "employers should have all of their records available to expedite these examinations," the IRS said in announcing the project last November.

While similar to an audit, an NRP is designed to "take a snapshot of a given taxpayer population in order to determine the compliance (with tax regulations) within that population," according to this article by Kevin Packman of Holland & Knight. In addition, the companies studied are chosen at random.

Aug 10

The IRS gathers its forces to focus on international enforcement

Posted by Karen1 in transfer pricingtax lawIRS


Last week, the IRS announced that it was realigning and renaming its Large and Mid-Size Business division, with a goal of creating a centralized organization better geared to international tax compliance. The new group will be known as the Large Business and International (LB&I) division. As part of the reorg, the agency's international examiners now will report up through this group. Along with the existing staff of 600, about 875 examiners who specialize in international tax matters within other departments of the IRS now will come under the LB&I umbrella. Mike Danilack, deputy commissioner of international, will head the new unit, which will focus on businesses with at least $10 million in assets.

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