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Mass DOR Announces Dates of FY2015 Tax Amnesty Program
Posted by Tarra Curran on Mon, Mar 30, 2015 @ 09:47 AM
On March 5, 2015 we told you about Massachusetts’ Tax Amnesty Program for FY2015. Since then the dates for the program have been announced and letters to eligible taxpayers have been disseminated. Here’s a quick update.
 
Massachusetts’ 60-day tax amnesty program, which encompasses corporate excise taxes among other tax types, is among measures the state hopes will close a nearly $770 million mid-year budget gap. The amnesty program encourages individuals and businesses that are in arrears to pay their delinquent taxes by temporarily eliminating the additional penalties that would normally be imposed.
 
The Commissioner of Revenue announced that the official 60-day amnesty period will run from March 16 to May 15, 2015 and applies to certain tax liabilities billed on or before January 1, 2015.

According to the DOR, approximately 24,000 taxpayers were sent a Tax Amnesty Notice late last week notifying them that they qualify for the program. They include taxpayers with unpaid tax liabilities in the tax types covered by the program, including corporate excise, estate tax, fiduciary income tax, and use tax on motor vehicles.
 
Eligible taxpayers must meet the following requirements:
(a) The taxpayer has an assessment of one of the following types:
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Topics: Tarra Curran, FY2015, Tax amnesty program

Proposed Simplification of Income Tax Accounting
Posted by Scott Wragg on Fri, Mar 27, 2015 @ 09:13 AM

The Financial Accounting Standards Board (FASB) recently proposed changes to income tax reporting. The Board released an exposure draft on January 22, 2015, that affects Income Taxes (Topic 740) for intra-entity asset transfer and the balance sheet classification of deferred income taxes.
 
Changes in the updates are designed to streamline current practices and simplify financial reporting requirements. The FASB accepted comments on both of the proposed updates through May 29, 2015. As proposed, the new standards would first be implemented for calendar years ending December 31, 2017, and interim periods within those years.

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Topics: Scott Wragg, income tax accounting

Project Aims to Simplify Employee Benefit Plan Reporting
Posted by Kevin Petrosino on Thu, Mar 26, 2015 @ 09:35 AM

The Financial Accounting Standards Board (FASB) is examining options to simplify employee benefit plan (EBP) accounting standards.
 
EBP financial reporting has historically been complex. During the 2014 fiscal year, the Employee Benefits Security Administration (EBSA) processed 26,665 applications from plan sponsors seeking to voluntarily correct mistakes in their benefit plan reporting.
 
Prompted by the AICPA's EBP Expert Panel, FASB's Emerging Issues Task Force (EITF) added Issue No. 15-C, Accounting Issues in Employee Benefit Plan Financial Statements to its agenda in November 2014. A proposed agenda for employee benefit plan simplifications was made available prior to the March 19, 2015, EITF meeting.

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Topics: employee benefit plan, Kevin Petrosino

Reminders for FBAR Filing for the Upcoming June 30 Deadline
Posted by Robert Kerr on Wed, Mar 25, 2015 @ 01:33 PM

114 Electronic Filing Requirement

In September 2013, the Financial Crimes Enforcement Network (FinCEN) introduced Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Form 114 is still required to be submitted to FinCEN before June 30, but it now must be filed electronically by using a registered tax software program or by using the Bank Secrecy Act (BSA) E-filing System: http://bsaefiling.fincen.treas.gov/main.html. The electronically filed Form 114 replaces Treasury Department Form 90-22.1, which was paper filed with FinCEN in previous years.

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Topics: Robert Kerr, FBAR

New Compliance Requirements Related to Affordable Care Act in Effect for 2015
Posted by Bernard Kaplan on Wed, Mar 25, 2015 @ 09:06 AM
The Affordable Care Act (ACA) has transformed group health plans since the law was enacted more than four years ago, and plan sponsors must work diligently to keep pace with tax-related compliance requirements. Among the most notable reforms effective in 2015 is the shared responsibility mandate and reporting requirements for large employers. Here’s an overview of this and other significant reporting requirements for this year.

Employer Shared Responsibility Mandate

Section 4980H of the Internal Revenue Code requires “applicable large employers” with 50 or more full-time employees (including full-time equivalent, or FTE, employees) to offer health coverage to full-time employees and their children or pay a penalty. The effective date of the employer shared responsibility mandate – often referred to as the “play-or-pay mandate” – was January 1, 2015. (It was originally scheduled to take effect in 2014 but the IRS postponed that start date.)
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Topics: Bernard Kaplan, Affordable Care Act

Renewed Audit Focus - Related Parties and Unusual Transactions
Posted by Kristen Shepley on Tue, Mar 17, 2015 @ 09:09 AM

Related party transactions, significant unusual transactions and transactions with a company's executive officers are three critical areas of risk that have been contributing factors in a number of financial reporting frauds over the last several decades. The PCAOB has previously concluded that its existing requirements to audit these areas are not sufficient and are not sufficiently risk-based.
 
In response, the PCAOB issued, and the SEC has approved Auditing Standard ("AS") No. 18, Related Parties, as well as amendments to existing standards on auditing significant unusual transactions and transactions with a company's executives. These changes may result in additional documentation and scrutiny of these types of transactions by audit firms as they comply with the standard for audits performed under PCAOB standards, including those for publicly traded companies and broker-dealers.

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Topics: audit

Proposed R&D Credit Regulations Would Clarify, Modify Tests for Internal Use Computer Software
Posted by Kristen Shepley on Fri, Mar 13, 2015 @ 09:33 AM

The Treasury and IRS have released proposed regulations governing the credit for increasing research activities (the research and development or R&D credit) with respect to computer software for internal use. The proposal also withdraws a prior advanced notice of proposed rulemaking, and asks for public comments.

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Topics: research and development, internal computer software

Small Taxpayers Get Exemption from Tangible Property Regulation Compliance, but ...
Posted by Bob Smith on Fri, Mar 13, 2015 @ 09:24 AM

There are good reasons why small taxpayers may want to comply.

The IRS released Revenue Procedure 2015-20 on February 13, 2015. 
 
This new Revenue Procedure provides small taxpayers an exemption to comply with the new Tangible Property Regulations for 2014. Small taxpayers are defined as those with total assets of less than $10 million (as of January 1, 2014) or having average annual gross receipts of $10 million or less for the prior three taxable years. It is important to note, however, that small businesses must still implement the regulations and therefore it may still be in their best interest to comply and file the necessary forms unless they have immaterial fixed assets. Filing the forms may protect small companies and provide them with an opportunity to still qualify for the related deductions.
 
Important:
  • The final Tangible Property Regulations (TPR) have not changed
  • Revenue Procedure 2015-20 only addresses the issues associated with the implementation of the TPRs and only for taxpayers that qualify under the new Revenue Procedure.
Bottom Line:
  • Taxpayers should still comply with the TPRs and file the necessary forms unless they have immaterial fixed assets and TPR issues. 
  • If you are a small taxpayer and elect not to file the appropriate Forms 3115s for Revenue Procedure 2015-20, it is likely that your tax preparer may ask for a statement of indemnification.
  • The indemnification document will likely cover the facts and consequences of not filing and your clear choice that you chose not to file nonetheless.
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Topics: Tangible Property Regulations, compliance, Bob Smith, revenue procedure 2015-20

Is Your Corporation Entitled to Property Tax Benefits in Massachusetts?
Posted by Tarra Curran on Wed, Mar 11, 2015 @ 09:15 AM

Here’s how to ensure inclusion on the annual list of corporations for property tax relief and other purposes

The Annual Certification of Entity Tax Status application is now available through WebFile for Business. A successful application places corporations on the Division of Local Services List of Corporations, a critical resource used by Massachusetts’ cities and towns to determine which entities treated as corporations are entitled to local property tax benefits.

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Topics: Tarra Curran, Property Tax Benefits, corporation property tax benefits

2015 Tax Preview: 5 Stories to Watch
Posted by Kristen Shepley on Tue, Mar 10, 2015 @ 09:21 AM

To paraphrase Macbeth, 2014 proved to be full of sound and fury, but signified virtually nothing when it comes to taxes. Both political parties touted comprehensive tax reform on their agendas, but once again, any substantial changes (save for a last minute extenders bill that expired three weeks later) stalled out before the end of the legislative session. Between the results from the 2014 mid-term elections and lingering court rulings, 2015 promises to be more eventful. As we look ahead, here are five tax-related developments that are on the horizon.

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Topics: 2015 Tax preview

Tangible Property Regulations Compliance and Tax Savings Checklist
Posted by Bob Smith on Tue, Mar 10, 2015 @ 09:12 AM

Do You Know About the Combination of Tax Savings and Compliance Costs?

The new Tangible Property Regulations are very complex and consist of a number of intricate accounting rules and changes that taxpayers will face during this tax season and beyond.

We’re pleased to offer this checklist that will provide you with points for discussion with your accountant in order to prepare your 2014 tax return in a manner that will get you into compliance as well as for identifying cost savings opportunities:

Tangible Property Regulations Checklist

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Topics: Tangible Property Regulations, compliance, tax savings, Bob Smith

Tax Deduction Opportunities from the New Tangible Property Regulations
Posted by Bob Smith on Thu, Mar 5, 2015 @ 09:33 AM

It’s not just about compliance – it’s about tax savings too!

Tangible Property Regulation Compliance Under the Tangible Property Regulations, taxpayers may be able to deduct greater amounts for repair costs, materials and supplies, routine maintenance for buildings and equipment, maintenance on buildings for smaller taxpayers, and new safe harbor de minimis amounts.
 
There are numerous specific rules and qualifications for many of these opportunities.
 
More importantly, many taxpayers are able to currently deduct the net tax value of certain previously capitalized assets. The following list contains typical potential write-off opportunities:
 
  • Roof or land improvement costs that were previously capitalized may now have their net tax value written off if a roof improvement or new paving is (or was) subsequently made and capitalized.
  • Previously capitalized manufacturer or franchisor-required refreshments.
  • Prior leasehold improvements or portions thereof.
  • Previously capitalized improvements now considered deductible “repairs” in the viewpoint of the new regulations.
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Topics: compliance, new tangible property regulations, tax savings, Bob Smith

Massachusetts Includes Corporate Excise in FY2015 Tax Amnesty Program
Posted by Tarra Curran on Thu, Mar 5, 2015 @ 09:02 AM

Massachusetts will offer a 60-day tax amnesty program during FY2015 that will encompass corporate excise taxes, among other tax types. The Commissioner of Revenue has yet to determine the exact periods covered. The amnesty program was included in H.B. 52, a bill aimed at helping close a nearly $770 million mid-year budget gap. The bill was signed by the governor on February 13, 2015.

The amnesty program itself is intended to encourage businesses and individuals that are in arrears to pay their delinquent taxes by temporarily eliminating the additional penalties that would normally be imposed. Many states utilize amnesty programs, viewing them a “win-win” opportunity since taxpayers can remit back taxes while avoiding costly penalties, and states can collect revenue without paying costs associated with tax audits. Massachusetts has offered amnesty programs in the past. In 2010 Massachusetts collected $32.5 million during its tax amnesty program, and back in 2002 collected more than $100 million. (Collection figures are not yet available for the program that ran in 2014.)

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Topics: Tarra Curran, FY2015, Tax amnesty program

The Most Dramatic Change to Tax Law in Nearly 30 Years – The Tangible Property Regulations
Posted by Bob Smith on Mon, Mar 2, 2015 @ 03:29 PM

There may be tax savings opportunities for owners of commercial real estate and other tangible property.

The new tangible property regulations are complex and difficult to implement and comply with. Facts and circumstances of each business situation will need to be analyzed to determine the proper treatment of almost all business expenditures for materials and supplies, repairs and maintenance, and asset purchases and related depreciation deductions.
 
Tangible Property Regulation Compliance Your business should elevate the importance and time restrictions in implementing these rules to assure proper compliance with the regulations and to identify potential tax savings and benefits.
 
These tangible property regulations are the most dramatic changes in tax law to affect businesses since the overhaul of the Internal Revenue Code in 1986. They apply to all forms of business, whether a “C” corporation, an “S” corporation, a partnership, an LLC, a sole proprietorship (Schedule C on individual return), or a rental (Schedule E on individual return). Non-profit organizations and some Trusts may also be affected.

Small taxpayers (defined as total assets of less than $10 million as of January 1, 2014 or average annual gross receipts of $10 million or less for the prior three taxable years) should be aware that they may be exempt from compliance with the new Tangible Property Regulations. It is important to note, however, that small businesses must still implement the regulations and therefore it may still be in their best interest to comply and file the necessary forms unless they have immaterial fixed assets. Filing the forms may protect small companies and provide them with an opportunity to still qualify for the related deductions
 
Your accountant must carefully evaluate the facts and circumstances of your business situation to determine the proper treatment of all business expenditures for materials and supplies, repairs and maintenance, and asset purchases along with the impact on subsequent depreciation.
 
Needless to say, these regulations are quite complex and require timely attention.

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Topics: new tangible property regulations, Bob Smith

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