AICPA Supports Repeal of Burdensome Tax Information Reporting Measure

AICPA Supports Repeal of Burdensome Tax Information Reporting Measure
The American Institute of Certified Public Accountants told members of Congress recently they should repeal the section of the new health care law that requires businesses to report to the Internal Revenue Service any purchase from a vendor of goods or services worth $600 or more during the calendar year.

The AICPA said it will be burdensome and costly for small businesses to compile the data and prepare the Form 1099-MISC information return. Furthermore, the AICPA said the information collected on the 1099 forms will not be very helpful to the IRS in collecting any unpaid taxes that should have been paid by the vendor because it will be difficult to reconcile payments reported on the forms and income reported by the vendor.

The reporting requirement is included in the Patient Protection and Affordable Care Act and is effective for purchases made in 2012 that will be reported on 1099 forms filed in 2013.

A copy of the AICPA’s letter to members of the U.S. Senate is pasted below. An identical letter was sent to members of the U.S. House of Representatives.

If you would like to speak to someone about the AICPA’s letter, please contact Shirley Twillman, AICPA senior manager for media relations, at 202-434-9220 or stwillman@aicpa.org.

To read the entire article and a copy of the letter, please click the link above.

IRS help with Gulf oil spill issues

The IRS has created a Gulf Oil Spill Information Center, and set up a Dedicated Phone Line for Gulf Oil Spill Victims, 866-562-5227.

 

The IRS is also planning a Special Assistance Day, July 17th in four states:

1. Alabama: Mobile.
2. Florida: Panama City and Pensacola.
3. Louisiana: New Orleans, Houma and Baton Rouge.
4. Mississippi: Gulfport.

 According to the IRS,

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 economic harm, who are seeking help resolving tax problems that have not been resolved through normal channels.
• 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.

Repost from CNN/Money.com: IRS starts mopping up Congress's tax-reporting mess

IRS starts mopping up Congress's tax-reporting mess
By Neil deMause, contributing writerJuly 9, 2010: 11:18 AM ET

NEW YORK (CNNMoney.com) -- With a new mandate looming that will require business owners to file millions more tax forms, the Internal Revenue Service has begun the daunting process of figuring out how to turn the law's sweeping demands into actual rules for taxpayers.

To read the rest of the article click here. IRS starts mopping up Congress's tax-reporting mess

IRS provides a web page with help for homebuyer tax credit extension

The IRS has created a web page with information about the extension of the homebuyer tax credit. http://www.irs.gov/irs/article/0,,id=225078,00.html The deadline for the credit was extended from June 30, 2010 to September 30, 2010.

Here are some important exceprts from the page.

The IRS reminds taxpayers that special filing and documentation requirements apply to anyone claiming the homebuyer credit. To avoid refund delays, those who entered into a purchase contract on or before April 30, but closed after that date, should attach to their return a copy of the pages from the signed contract showing all parties' names and signatures if required by local law, the property address, the purchase price, and the date of the contract.
Besides filling out Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, all eligible homebuyers must also include with their return one of the following documents:

• A copy of the settlement statement showing all parties' names and signatures if required by local law, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
• For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
• For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Besides providing a tax benefit to first-time homebuyers and purchasers who haven’t owned homes in recent years, the law allows a long-time resident of the same main home to claim the credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. Homebuyers claiming this credit can avoid refund delays by attaching documentation covering the five-consecutive-year period:

• Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
• Property tax records or
• Homeowner’s insurance records.

There are three options for claiming the credit on a qualifying 2010 purchase:

• If a 2009 return has not yet been filed, claim it on Form 1040 for tax-year 2009. Though these returns cannot be filed electronically, taxpayerscan still use IRS Free File to prepare their return. The returns must be printed out and sent to the IRS, along with all required documentation. The IRS urges taxpayers claiming refunds to choose direct deposit.
• If a 2009 return has already been filed, claim it on an amended return using Form 1040X.
• Whether or not a 2009 return has been filed, wait until next year and claim it on a 2010 Form 1040.

For details, check out the complete page. http://www.irs.gov/irs/article/0,,id=225078,00.html

Re-post from AccountingWEB.com: Collecting unpaid taxes four pennies at a time

The article below is reposted from AccountingWEB. It describes a collection effort by the IRS.

Aaron Zeff is the owner of Harv’s Metro Car Wash in Sacramento, California. Imagine his surprise when, one day last March, federal agents showed up at his business demanding payment of an amount owed from tax year 2006.

Just how much did Zeff need to cough up? Four pennies.

Check out the article for the entire story.
Collecting unpaid taxes four pennies at a time AccountingWEB.com