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IRS Suspends Processing for Paper Filed Returns, Postpones More Deadlines
Posted by Chrissy Hammond on Mon, Apr 13, 2020 @ 01:53 PM

The IRS announced on April 9 that it suspended processing all paper filed individual tax returns until further notice, and that its ability to process all other paper filed returns is “extremely limited.” This news comes shortly after reports surfaced that the IRS temporarily shuttered several offices at its national processing campus in Ogden, UT on April 8 as a result of a stay-at-home order resulting from the state’s response to the COVID-19 pandemic. The IRS also announced on April 9 that it postponed to July 15, 2020 the due date for the remainder of practically all other federal tax forms and “time sensitive actions” that it had not previously postponed. Delays in the processing of paper filed returns might also delay refunds related to recent tax changes enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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Topics: IRS, IRS Updates, COVID19, Coronavirus, tax day

IRS Increases De Minimis Safe Harbor to $2,500
Posted by Bob Smith on Wed, Dec 2, 2015 @ 09:35 AM

The final tangible property regulations issued in 2013 provide a safe harbor election that allows qualifying businesses to immediately deduct purchases of tangible property below certain dollar thresholds. For taxpayers that do not have an applicable financial statement (typically an audited financial statement) (“AFS”), the dollar threshold was $500.The IRS received many comments suggesting that the $500 threshold was too low to effectively reduce the administrative burden of complying with the capitalization requirement for small businesses. After consideration of these comments, the IRS recently announced that the de minimis safe harbor threshold would be increased to $2,500 beginning with 2016 tax years. The dollar threshold for taxpayers with an AFS remains at $5,000.

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Topics: Tangible Property Regulations, IRS Updates, Bob Smith

IRS Continues to Attack Accrued Bonus Plans
Posted by Michael Corrente on Tue, Sep 9, 2014 @ 10:04 AM

Businesses with annual employee bonus plans have long operated under the assumption that as long as they pay bonuses within 2 ½ months after the end of the year in which the bonuses are earned, the bonuses are deductible in the year earned, rather than in the year paid. While it is true that the "2 ½ month rule" must be satisfied in order to deduct the bonus in the year earned, other requirements must be met as well. The IRS has issued several rulings in the last few years illustrating how many bonus plans may fail these requirements. While these rulings may cast doubt upon the deductibility of many employers' current bonus plans, they also shed light on how to structure a bonus plan to withstand IRS scrutiny.

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Topics: tax issues, Michael Corrente, tax, IRS Updates, Bonus Plans

IRS Issues Implementation Guidance on Tangible Property Regulations
Posted by Carl Giardino on Wed, Mar 26, 2014 @ 09:14 AM

On January 24, the IRS issued Rev. Proc. 2014-16 clarifying the automatic consent procedures for accounting method changes required or permitted by the temporary and final tangible property regulations issued last September (see our Federal Tax Alert, Updated Tangible Property Rules Expand Safe Harbors, Disposition Rules). Please note that Rev. Proc. 2014-16 modifies Rev. Proc. 2012-19 and rev. Proc. 2011-14.

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Topics: Tangible Property Regulations, IRS, IRS Updates, Carl Giardino

IRS Grants Extension of Time to Make Late Portability Election for Certain Estates
Posted by Kristen Shepley on Wed, Mar 19, 2014 @ 04:28 PM

In estate planning, the concept of "portability" of a deceased spouse's unused exclusion (DSUE) amount is relatively new. For decedents dying after December 31, 2010, if a first-to-die spouse has not fully used the estate tax exclusion, the DSUE amount can be transferred to the surviving spouse. This was originally passed as a two-year temporary provision (effective for 2011 and 2012) until it was made permanent in the American Taxpayer Relief Act of 2012.

Portability provides an alternative approach to fulfill a common estate planning goal of a married couple to take full advantage of both spouses' estate tax exclusions. Prior to portability, this was typically accomplished by funding a "bypass trust" (also known as a credit shelter trust) at the death of the first-to-die spouse with the exclusion amount and leaving the balance of the estate to qualify for the unlimited marital deduction. Now that portability is also an option, estate planners should determine which approach is better for a specific situation. Portability may be beneficial for certain estates and not others, but that is beyond the scope of this article.

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Topics: IRS Updates, estate planning, portability

IRS Issues Final Section 382 Regulations for Loss Corporations with Small Shareholders
Posted by Robert Kerr on Fri, Jan 17, 2014 @ 09:31 AM

The Treasury Department and IRS recently issued final regulations (T.D. 9638) under Section 382, which relate to the application of segregation rules to certain transactions involving public groups of small shareholders. These groups are comprised of shareholders who each own, directly or indirectly, less than five percent of the stock of the loss corporation.

The final regulations were published in the Federal Register on October 22, 2013 and generally follow the temporary regulations issued in 2011.

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Topics: Robert Kerr, IRS, IRS Updates

Addition of Specialized IRS Resources Means Transfer Pricing Audits will Increase in Frequency and Sophistication
Posted by David Bussius on Tue, Nov 26, 2013 @ 09:10 AM

With additional funding and resources, new reporting requirements, and a reorganization of  Its  Large Business & International (LB&I) division, the IRS now has a more centralized and enhanced focus on transfer pricing enforcement and compliance. These changes also give the IRS the depth to redirect some of its attention to transfer pricing practices at middle-market businesses with assets between $10 million and $250 million.

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Topics: Transfer Pricing Audits, David Bussius, IRS, IRS Updates

Are You Aware of the Benefit Plan Limitations for 2014?
Posted by Bernard Kaplan on Wed, Nov 20, 2013 @ 09:04 AM

The IRS recently announced cost-of-living adjustments applicable to dollar limitations for retirement plans and other items that will be effective as of January 1, 2014.

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Topics: IRS, IRS Updates, Bernard Kaplan, Benefit Plan Limitations for 2014

IRS Delays Effective Date of Repair Regulations
Posted by Kristen Shepley on Wed, Aug 7, 2013 @ 09:04 AM

The IRS Large Business & International Division (LB&I) has updated the temporary regulations (TD 9564) on the treatment of costs incurred for tangible property ("repair regs"), delaying the effective date from January 1, 2012 until January 1, 2014.

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Topics: Large Business & International Division, IRS, IRS Updates

IRS Issues Proposed Regulations on Medical Device Excise Tax
Posted by Michael Corrente on Fri, Feb 3, 2012 @ 03:00 PM

The IRS has issued proposed regulations that provide guidance on the medical device excise tax imposed by Code Sec. 4191. Starting in 2013, any manufacturer, producer or importer of certain medical devices is subject to the tax, which is equal to 2.3 percent of the price for which the medical device is sold. The medical devices tax was enacted by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) in conjunction with the Patient Protection and Affordable Care Act (P.L. 111-148).

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Topics: Michael Corrente, taxable medical devices, tax, IRS, IRS Updates, Medical Device Excise Tax

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