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Guidance – Payroll Form 944 Rev Proc 2009-51 – Know Who is Eligible to File Annual Form Rather Than Quarterly

Revenue Procedure 2009-51 sets forth the procedures for employers who are eligible to file Form 944, Employer’s Annual Federal Tax Return, to request to file Form 944 instead of Forms 941, Employer’s Quarterly Federal Tax Return, for tax years beginning on or after January 1, 2010. In addition, this revenue procedure sets forth the procedures for employers who previously were notified to file Form 944 to request to file Forms 941 instead for tax years beginning on or after January 1, 2010.

Revenue Procedure 2009-51 will be published in Internal Revenue Bulletin 2009-45 on November 9, 2009.

Guidance – For Plan Sponsors – Required Minimum Distribution Notice 2009-82

Notice 2009-82 explains that those who have received a 2009 required minimum distribution have until the later of Nov. 30 2009, or 60 days after the date the distribution was received to roll it over. The notice also provides guidance for retirement plan sponsors.
Notice 2009-82 will appear in IRB 2009-41 dated Oct. 13, 2009.

IRS Issues Guidance on 2009 Required Minimum Distribution Waiver:

WASHINGTON ― The Internal Revenue Service today provided guidance for retirement plan administrators, plan participants and retirees regarding recent legislation affecting required minimum distributions. The Worker, Retiree, and Employer Recovery Act of 2008 waives required minimum distributions for 2009 from certain retirement plans.

Generally, a required minimum distribution is the smallest annual amount that must be withdrawn from an IRA or an employer’s plan beginning with the year the account owner reaches age 70½. The 2008 law waives required minimum distributions for 2009 for IRSs and defined contribution plans (such as 401(k)s) and allows certain amounts distributed as 2009 required minimum distributions to be rolled over into an IRA or another retirement plan.

Notice 2009-82 provides relief for people who have already received a 2009 required minimum distribution this year. Individuals generally have until the later of Nov. 30, 2009, or 60 days after the date the distribution was received, to roll over the distribution.

The notice also provides guidance for retirement plan sponsors. It contains two sample plan amendments that plan sponsors may adopt or use to amend their plans to either stop or continue 2009 required minimum distributions. Both sample amendments provide that participants and beneficiaries can choose to receive or not to receive 2009 required minimum distributions. Also, both sample amendments allow the employer to offer direct rollover options of certain 2009 required minimum distributions.

Plan sponsors may need to tailor the sample amendment to their plan’s particular terms and administration procedures and must adopt the amendment no later than the last day of the first plan year beginning on or after Jan. 1, 2011 (Jan. 1, 2012 for governmental plans).

Guidance – Proposed Reg Exclusion From Gross Income Amounts Received on Account of Personal Physical Injuries

REG-127270-06 contains proposed regulations relating to the exclusion from gross income for amounts received on account of personal physical injuries or physical sickness. The proposed regulations reflect amendments under the Small Business Job Protection Act of 1996. The proposed regulations also delete the requirement that to qualify for exclusion from gross income, damages received from a legal suit, action, or settlement agreement must be based upon “tort or tort type rights.” The proposed regulations affect taxpayers receiving damages on account of personal physical injuries or physical sickness and taxpayers paying these damages.

Guidance – Late Classification Elections Rev Proc 2009-41

Revenue Procedure 2009-41 provides guidance with regard to eligible entities seeking relief to file late classification elections. Generally, the revenue procedure provides late relief if the request is filed within 3 years and 75 days of the requested effective date of the eligible entity’s classification. The revenue procedure also provides guidance for those eligible entities that do not qualify for relief under this revenue procedure.

Revenue Procedure 2009-41 will be in IRB 2009-39, dated September 28, 2009.

Guidance – Rev Proc 2009-39 re automatic consent for changes in accounting method

Revenue Procedure 2009-39 amplifies, clarifies, and modifies Rev. Proc. 2008-52, which provides procedures for taxpayers to obtain automatic consent for the changes in method of accounting described in its APPENDIX. This revenue procedure also clarifies and modifies Rev. Proc. 97-27, as amplified and modified by Rev. Proc. 2002-19, as amplified and clarified by Rev. Proc. 2002-54, and as modified by Rev. Proc. 2007-67, which provides the general procedures for obtaining non-automatic consent for changes in method of accounting.
Revenue Procedure 2009-39 will be in IRB 2009-38, dated September 21, 2009.

The IRS Explains How Their Guidance Works

[Stacie says: The Internal Revenue Service issues many different forms of guidance materials. The following is a list of materials and their explanations. If you are a new CPA or a college student, I encourage you to click through and learn how it all works.]

IRS Guidance in Plain EnglishThis is a starting point for understanding some of the basic guidance issued by the IRS.

Internal Revenue Bulletins (after June 2003) ( after June 1995 – PDF only)The Internal Revenue Bulletin (IRB) is the authoritative instrument of the IRS for announcing all substantive rulings necessary to promote a uniform application of tax law. Issues after June 2003 are available in both HTML and PDF formats; earlier issues are in PDF only.

Advance NoticesThe IRS sometimes releases Rulings, Procedures and other technical items in advance of publishing them in the Internal Revenue Bulletin. The full text of these advance notices is available in PDF format. This list’s filenames are based on the items’ designations — for example, Announcement 2003-40 is “a-03-40,” Notice 2003-30 is “n-03-30,” Revenue Procedure 2003-50 is “rp-03-50” and Revenue Ruling 2003-60 is “rr-03-60.”

Tax RegulationsIn addition to the regulations that interpret the tax laws, there are links to various technical resources.

Internal Revenue CodeThe codified collection of U.S. laws on income, estate and gift, employment and excise taxes, plus administrative and procedural provisions.

IRS Written DeterminationsRulings or determinations issued by the IRS, including Technical Advice Memoranda and Chief Counsel Advice. Sorted by most recent publication number, the listing may also be sorted by Uniform Issue List codes.

Electronic Reading RoomA collection of links to published guidance, rulings, administrative manuals and other items.

Guidance – Work Opportunity Tax Credit

Notice 2009-69 clarifies section D of Notice 2009-28 (2009-24 I.R.B.1082, published on June 15, 2009), which provided guidance to employers seeking to claim the Work Opportunity Tax Credit on two targeted groups added by new §51(d)(14). Notice 2009-69 explains that “not readily employable by reason of lacking a sufficient number of basic skills” includes individuals who have worked occasionally since high school graduation / receipt of GED certificate. Notice 2009-69 also provides extended transition relief for filing of Form 8850. Notice 2009-69 will appear in IRB 2009-35 dated August 31, 2009.

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