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IRS Patrol: Tax Assistance in Disaster Situations: July 17 is Gulf Oil Assistance Day

WASHINGTON –– The Internal Revenue Service [recently] provided guidance to individuals and businesses affected by the oil spill in the Gulf of Mexico and announced a number of new efforts to help affected taxpayers, including a special Gulf Coast Assistance Day on July 17.

“This is a very difficult time for many people affected by the oil spill in the Gulf of Mexico. As residents of the region cope with the evolving situation, I want to assure them that the IRS will be doing everything it can to provide tax help to those who need it,” IRS Commissioner Doug Shulman said. “We encourage anyone who has an issue with the IRS to contact us and explain their hardship, and we will work with them to find a solution. We’ll do everything we can under current law to help taxpayers.”

The guidance released today is based on current law, and it explains how recipients of payments from BP should treat the payments for tax purposes. According to the current law, BP payments for lost income are taxable in the same way that the wages or business income these payments are replacing would have been. The law treats compensation for lost wages or income differently for tax purposes than compensation for physical injuries or property loss, which generally are nontaxable.

Every person can have unique financial circumstances, so the IRS encourages taxpayers to review their tax situation or talk with their tax preparers about the implications of payments or compensation from the oil spill.

The new information is available in a question-and-answer format on a special section of the IRS website, IRS.gov. The IRS is closely monitoring the situation in the Gulf, and additional information will be added to IRS.gov as it becomes available.

To help people in the Gulf Coast area dealing with tax issues, the IRS also announced a special assistance day on July 17 in seven cities. Taxpayers and tax preparers will be able to work directly with IRS employees to resolve tax issues, including specific topics related to the oil spill. The IRS will hold the Gulf Coast Assistance Day in four states:

  • Alabama: Mobile.
  • Florida: Panama City and Pensacola.
  • Louisiana: New Orleans, Houma and Baton Rouge.
  • Mississippi: Gulfport.

Times and specific locations will soon be announced and will be available on IRS.gov.

In addition, taxpayers with problems related to the Gulf spill will soon be able to reach IRS personnel through an IRS toll-free telephone line. Specially trained IRS personnel will be available to help people with tax questions related to the oil spill. More information will be available soon about this telephone line.

The IRS encourages taxpayers in the Gulf struggling with payment or collection issues to contact the agency. The IRS continues to have a number of ways to help taxpayers dealing with oil spill issues or other economic hardship issues, including:

  • Assistance of the Taxpayer Advocate Service for those taxpayers experiencing particular hardship navigating the IRS.
  • Postponement of collection actions in certain hardship cases.
  • Added flexibility for missed payments on installment agreements and offers in compromise for previously compliant individuals having difficulty paying.
  • IRS employees will be permitted to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise.
  • Accelerated levy releases for taxpayers facing economic hardship.

Related Information:

IRS Presents: Tanning Tax Is Here

Stacie says: July 1st kicked off the new tanning tax provision of the Affordable Care Act that we debated last year.

You can catch up with the debate by reading these posts:

An Interesting Rewrite for the Vanity Tax H.R. 3590 Looks As if Congress Found a Vanity Product with Enough Sin to Justify a Tax

Vanity Tax = Tax the Other Guy Legislation HR 3590

Babbling Incisively on About Fuller Lips, Larger Breasts, Slimmer Thighs and H.R.3590

Still Talking About Fuller Lips, Larger Breasts, Slimmer Thighs, And H.R. 3590

Let’s Talk Fuller Lips, Larger Breasts, Slimmer Thighs, and H.R. 3590 (Patient Protection and Affordable Care Act.)

The IRS Presents the following information:

Starting July 1, 2010, many businesses offering tanning services must collect a 10 percent excise tax on the tanning services they provide. This excise tax requirement is part of the Affordable Care Act that was enacted in March 2010.

Here are nine tips on the tanning excise tax that providers must collect.

  1. Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services.
  2. If the customer fails to pay the excise tax, the tanning service provider is liable for the tax.
  3. The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.
  4. The tax does not apply to spray-on tanning services.
  5. If a payment covers charges for tanning services along with other goods and services, the other goods and services may be excluded from the tax if they are separately stated and the charges do not exceed the fair market value for those other goods and services.
  6. If the customer purchases bundled services and the charges are not separately stated, the tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services.
  7. The tax does not have to be paid on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separately identifiable fee.
  8. Tanning service providers must report and pay the excise tax on a quarterly basis.
  9. To pay the tax, businesses must file IRS Form 720, Quarterly Federal Excise Tax Return using an Employer Identification Number assigned by the IRS. Businesses that don’t already have one can apply for an EIN online at IRS.gov.

Find more information about the excise tax on tanning services, IRS Form 720 and other tax provisions of the Affordable Care Act at IRS.gov.

Links:

YouTube Video:

Tanning Services Excise Tax: English | ASL

IRS Patrol: IRS Requests Public Input on Expanded Information Reporting Requirement

Stacie says: You have until September 29, 2010 to tell the IRS your thoughts  on expanded reporting requirements for Form 1099 recipients.  Check out the ways to submit your comments below:

WASHINGTON — The Internal Revenue Service invited public comment on how to most effectively carry out a law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099. These comments will help the IRS issue guidance that implements this provision in a manner that minimizes burden and avoids duplicate reporting.

Under a proposed regulation, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors. The IRS seeks comments on additional circumstances in which duplicate reporting might otherwise occur and on rules that would prevent such duplicate reporting.

The change, enacted in March but not effective until 2012, expanded existing reporting requirements to include a business’s payments related to goods and other property, and payments to most corporations. With some exceptions, payments to corporations are currently exempt from this requirement.

There are three ways to submit comments.E-mail to:

  • Notice.Comments@irscounsel.treas.gov. Include “Notice 2010-51” in the subject line.
  • Mail to: Internal Revenue Service, CC:PA:LPD:PR ( Notice 2010-51), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
  • Hand deliver to: CC:PA:LPD:PR ( Notice 2010-51), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.

The deadline is Sept. 29, 2010. Further details are in Notice 2010-51, posted today on IRS.gov.

Notice 2010-51 invites public comments regarding guidance to be provided to payors and other affected persons concerning new requirements with respect to the reporting of payments made in the course of the payor’s trade or business.  Section 6041 of the Internal Revenue Code generally requires information returns to be made by every person who makes payments, as defined in section 6041(a), aggregating $600 or more in any taxable year to a single payee in the course of the payor’s trade or business; new amendments to section 6041 expand reporting to payments of gross proceeds and payments to corporations.

Notice 2010-51 will appear in IRB 2010-29, dated July 19, 2010.

IRS Patrol: Home Buyer Credit – Closing Deadline Extended

Well, I’m a bit late in my reporting of this extension.  Sorry about that.  We’ve just returned from a really great vacation visiting the grand-baby.

So here it is:

The deadline for the completion of qualifying First-Time Homebuyer Credit purchases has been extended. Taxpayers who entered into a binding contract before the end of April now have until September 30, 2010 to close on the home.

The Homebuyer Assistance and Improvement Act of 2010, enacted on July 2, 2010, extended the closing deadline from June 30 to Sept. 30 for eligible homebuyers who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, 2010.

Here are five facts from the IRS about the First-Time Homebuyer Credit and how to claim it.

  1. If you entered into a binding contract on or before April 30, 2010  to buy a principal residence located in the United States you must close on the home on or before September 30, 2010.
  2. To be considered a first-time homebuyer, you and your spouse – if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
  3. To be considered a long-time resident homebuyer, your settlement date must be after November 6, 2009 and you and your spouse – if you are married – must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.
  4. The maximum credit for a first-time homebuyer is $8,000. The maximum credit for a long-time resident homebuyer is $6,500.
  5. To claim the credit you must file a paper return and attach Form 5405, First Time Homebuyer Credit, along with all required documentation, including a copy of the binding contract. New homebuyers must attach a copy of the properly executed settlement statement used to complete the purchase. Long-time residents are encouraged to attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statements, property tax records or homeowner’s insurance records.

For more information about the First-Time Homebuyer Tax Credit and the documentation requirements, visit IRS.gov/recovery.

IRS Issues Regulations on 10-Percent Tax on Tanning Services Effective July 1

WASHINGTON — The Internal Revenue Service today issued regulations outlining the administration of a 10-percent excise tax on indoor tanning services that goes into effect on July 1.

The regulations were published today in the Federal Register.

In general, providers of indoor tanning services will collect the tax at the time the purchaser pays for the tanning services.  The provider then pays over these amounts to the government, quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return.

The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.  The regulations also provide an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee.

The IRS and Treasury Department invite comments.

Send submissions to: CC:PA:LPD:PR (REG-112841-10), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044.

Submissions may be hand-delivered to: CC:PA:LPD:PR Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-112841-10), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW;  Washington, DC,

Submissions may be sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (REG-112841-10).

IRs Presents: What You Should Know About the Taxpayer Advocate

The Taxpayer Advocate Service is an independent organization within the Internal Revenue Service whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving problems with the IRS, or who believe that an IRS system or procedure is not working as it should. Here are seven things every taxpayer should know about TAS.

  1. TAS is your voice at the IRS.
  2. TAS service is free, confidential, and tailored to meet your needs.
  3. You may be eligible for TAS help if you’ve tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you think an IRS procedure just isn’t working as it should.
  4. TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals.
  5. TAS employees know the IRS and how to navigate it.  They will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved.
  6. TAS has at least one local taxpayer advocate in each state, the District of Columbia, and Puerto Rico.  You can call your local advocate, whose number is in your phone book, in Pub. 1546, Taxpayer Advocate Service — Your Voice at the IRS, and at www.irs.gov/advocate.  You can also call our toll-free number at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
  7. You can learn about your rights and responsibilities as a taxpayer by visiting the TAS online tax toolkit at www.taxtoolkit.irs.gov.  You can also check out the TAS YouTube channel at www.youtube.com/tasnta.

Links:

IRS Patrol: Haiti Relief Workers Qualify for Combat Zone Extension; Military Personnel and Designated Civilians Have at Least 180 Days to File and Pay

WASHINGTON — Members of the military and certain civilians providing earthquake relief in Haiti have additional time to file their 2009 returns and pay any taxes due, the Internal Revenue Service announced [in April].

Deadlines for taking care of a variety of federal tax matters are automatically extended for persons serving in a combat zone or a contingency operation. Operation Unified Response is a contingency operation, thus giving designated persons providing earthquake relief in Haiti the same extensions that are available to military and support personnel serving in Iraq, Afghanistan, and other combat zone localities.

This relief applies to members of the military, Red Cross personnel, accredited correspondents, and civilian support personnel acting under the direction of the Armed Forces.  In most cases, the relief also applies to spouses.

Normally, eligible taxpayers have at least 180 days after they leave the combat zone or contingency operation area to take care of various tax-related matters.  For Operation Unified Response and the Haiti earthquake, these tax-related matters include:

  • Filing a 2009 federal income tax return,
  • Paying tax due for 2009,
  • Making a 2009 IRA contribution, and
  • Making a quarterly estimated tax payment for 2010

The exact deadline depends on when an eligible taxpayer went to Haiti, when he or she left Haiti, and the tax matter involved. These extensions are penalty-free and interest-free.  No form needs to be filed to get this relief.

Questions and answers on combat zone extensions can be found on IRS.gov. Publication 3, Armed Forces Tax Guide, also available on the IRS Web site, describes this and other special tax provisions for members of the military.

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