|
|
President's
Message
Welcome New
Members
Tax Industry
Task Force
IRS Fact Sheet
on Return Preparer Review
GOVERNMENT
RELATIONS COMMITTEE REPORT
CURRENT STATE
AND LOCAL TAX DEVELOPMENTS
Haiti Relief
Donations Qualify for Immediate Tax Relief
|
|
|
Foreign Exchange Rates and Other
|
|
An electronic
publication of the New York State Society of Enrolled Agents (NYSSEA)
The mission of the New York State Society of Enrolled Agents
is to foster the professionalism and growth of its Members; to be an
advocate of taxpayer rights; to protect the interests of its Members; and
to enhance the role of the Enrolled Agent among government agencies,
other professions and the public at large, with an emphasis at the state
and local levels.
|
|
|
|
|
· President's Message
|
|
Happy New Year!
I do hope you all had a joyous Holiday Season.
Last November it seems like ages
ago Judy Strauss and I attended
the APEX meeting in Washington DC. This is a semi-annual meeting of State
leadership and is always enlightening. Its good to know things that work
in other states and those that dont.
The Affiliate Council has, once again, challenged our leadership to
adding new members and retaining current members. If you have an idea of
how we can make our state membership more valuable, please let us know.
The BIG news of the day is our lawsuit with NYS. Our attorney went to
court for the oral arguments on January 28th and both sides were asked to
prepare briefs which the Judge will review and make a decision. So, were
not home yet!
Plans for our Convention 2010 are underway and the education will be
great again. We will be at the Desmond for a while longer since it seems
to be a central location.
In order to properly run this organization, I need YOU to step up and
volunteer part of your time and talents. There are many committees that
need new blood and new ideas and I would really appreciate it if you
would let me know what you would like to help with. Please email me at
Vicki1219@aol.com and let me know where and how you can help YOUR organization.
You should know by now that I will not ask for anyone to do it all. My
thought has always been that we are professionals, we are busy, but we
can find time to do a small part. Please do your small part.
A very big THANK YOU to Pam Kaiser, who handled the Silent Auction for us
at Convention. Pam, once again, went above and beyond to help our
organization. Thanks Pam for being there for us!
Thank you all for a wonderful year and I look forward to working with you
all in 2010.
Have a Great Tax Season!
Sincerely,
Victoria A. McGinn, CPA, EA
President NYSSEA
|
|
|
|
|
· Welcome New Members
|
|
Mario Abreu EA-Bronx, K. Ahmad EA-New
City, Vijay Anand EA-Massapequa Park, Steven Anderson EA-Beacon, Robert
Arnold EA-Rockville Center, Pierre Augustin-Brooklyn, Rocky Aw EA-Staten
Island, Surendar Babber-Elmhurst, Jean Bak EA-Alden, Charles
Belgrave-Hempstead, Anthony Bellissimi EA-Dix Hills, E. Rocky Bendrihem
EA-Yorktown Heights, Harry Berkovits EA-Brooklyn, Maura Breslin
EA-Middlebury VT, Hojoon Cha EA-New York, Aubrey Chichester EA-Jamaica,
Wasi Choudhury EA-East Elmhurst, Concetta Cioffi EA-Brooklyn, Michael
Cook EA-Valley Stream, John Cooney EA-Flushing, Michael D'Antonio
EA-Bethpage, Denise Delisser-Clifton, NJ, Eula DeWitt EA-Springfield
Gardens, Aboubacar Diakite-New York, Mary Diebold EA-Melville, Pasquale
John Donofrio EA-Brooklyn, Maureen Engstrom EA-Albany, Leonidas Eracleous
EA-Astoria, Nasir Faizi EA-Brooklyn, Stephanie Ferdinand EA-Brooklyn,
Stephen Friedmann EA-Mattituck, William Funk-New York, Bethany Garofala
EA-Huntington, Brian Goldglanz EA-Brooklyn, James Grennen EA-Bohemia
Taylor Guzman EA-Jackson Heights, David
Hall EA-Williamsville, Elizabeth Hall EA-Brooklyn, Kevin Hanley-Hicksville,
Fausta Healy-Bronx, James Robert Heffernan EA-Bronxville, William Keats
EA-Merrick, Cheryl Leonard Kleiman EA, CFP-Henrietta, Eric Konopka EA-New
York, Richard Kordas EA-Syracuse, Alan Koslin EA-New York, John Mandabach
EA-Williamsville, Alisa Martin EA-New York, Robert McElroy EA-Levittown,
Matthew Joseph Meachem EA-New Rochelle, Bernard Mensah EA-Worcester MA,
William Mirabello EA-Staten Island, Rehan Misbah EA-Valley Stream, Akira
Mizukami EA-Japan, Nicholas Monaco-Hauppauge, Michael Muldoon EA-West Islip,
Moses Neuman EA-Monroe, Linda Nevelino EA-Islip, Peter Newton
EA-Douglaston, Steven Orlando EA-Massapequa, Frank Palmer EA-Yonkers, Jae
Soon Park EA-Jericho, Young Dai Park EA-Flushing
David Ramnauth-Richmond Hill, Donald Reid
EA, CFP, MBA-New York, Judith Reilly EA-New York, David Rivas EA-New
York, Robert Ruit EA-Poughquag, Linda Schuler-Dundee, Charles Schulman
EA-Syosset, Paul Jordan Schwartz-Great Neck, Richard Shelly EA-West
Orange, NJ, Hiskias Siefkes EA-New York, W. Ralph Sommers EA-Albany, Ragini
Subramanian EA-Ossining, Khemraj Sukhu-Queens Village, Mae-Mae Taylor
EA-New York, Stephen Thomas EA-West Babylon, Michael Triolo EA-Hobart,
Mary Weekes EA-Brooklyn, Jonathan Wolfsohn EA-Lynbrook, Chris Wong EA-New
York, Audra Wright EA-Saratoga Springs, Maggie Zhu EA-New York
|
|
|
|
|
· Tax Industry Task Force
|
|
The New York State Department of Taxation
and Finance announced it is implementing a new law aimed at curbing the
unscrupulous behavior of some individuals and businesses that prepare tax
returns or facilitate refund anticipation loans offered to clients.
The language of the Laws of 2009 (Chapter 59) is as follows:
The commissioner of taxation and finance shall convene a task force
consisting of representatives from the department of taxation and
finance, the state education department, the department of state, the
consumer protection board, the banking department, the office of
temporary and disability assistance, the New York state bar, the New York
state association of certified public accountants, enrolled agents with
the Internal Revenue Service, and other representatives of the tax return
preparation industry in order to prepare a report addressing the
following issues:
Determining the appropriate scope of the program for regulating tax
return preparers and commercial tax return preparers; setting appropriate
qualifications, including, but not limited to, minimum educational
qualifications and continuing educational requirements for tax return
preparers; examining issues and abuses involving refund anticipation
loans and checks and considering any other matters the task force
determines to be necessary or appropriate. The report required by this
section will be submitted to the commissioner of taxation and finance,
the governor, the speaker of the assembly and the temporary president of
the senate no later than March 31, 2012. The commissioner of taxation and
finance may promulgate regulations to implement any of the
recommendations made by the task force.
The task force met November 30, 2009 at the WA Harriman Campus, Albany,
NY. There are 25 members on the task force. This meeting was a chance to
meet and greet and to go over the objectives of the task force. Covered
were:
Why do we need standards?
Current state and federal law and oversight
Overview of the registration process,
the new statute regarding CPAs,
a review of the new GBL rules on RALS,
an explanation of the rules governing enrolled agents and Circular 230,
private sector perspectives,
and a review of other state efforts to regulate preparers.
I was asked to represent the enrolled agents. Below is a copy of my
handout for the rules governing enrolled agents and Circular 230 for your
review. At the end of the meeting we were given 4 different work groups
to be a part of. The subgroups are Qualifications (experience, education,
CPEs), Conduct (disqualifying factors, standards of ethics, what is
misconduct), RAL/RACs, Government administration (standards to be
adopted, who should monitor). I have requested to be a part of the
Qualifications group. We will be meeting again after March 15th to
discuss our progress. I will keep you up to date as we move along.
Judy M Strauss, EA
NYSSEA 1st VP
NYSSEA Education Chair
Enrolled Agent - President Chester A. Arthur signed the enabling act of
1884 giving Enrolled Agents the power of advocacy to prepare claims
against the government and to seek equitable justice for citizens
settling claims with the government for property confiscated for use in
the War Between The States. For many years, the purpose of the Enrolled
Agent was to act in this capacity.
In 1913, when the income tax was passed, the job of the Enrolled Agent
was expanded to include claims for monetary relief for citizens whose
taxes had become inequitable. As the income tax, estate, gift and other
sources of tax collections became more complex, the role of the Enrolled
Agent increased to include preparation of the many tax forms that were
required. Additionally, as audits became more prevalent, their role
evolved into taxpayer advocacy, negotiating with the IRS on behalf of
their clients.
In 1972, Enrolled Agents united to form a national association to
represent the needs and interest of EAs and the rights of taxpayers. That
association is today called the National Association of Enrolled Agents.
Through their national association and state affiliates, Enrolled Agents
have successfully defended their rights to practice and furthered the
passage of legislation and administrative rules that benefit both tax
practitioners and taxpayers.
Obtaining the status of Enrolled Agents is earned, not granted. To
be acknowledged as an EA, a tax practitioner must demonstrate knowledge
of the Internal Revenue Code. A tax practitioner must apply with the
Office of Professional Responsibility to be considered for the Enrolled
Agent status. Prior to application, the tax practitioner must
successfully pass the Special Enrolled Examination (commonly referred to
as the SEE). Once the test is passed, an applicant is put through a
background check by the OPR. The tax practitioner's past behavior is
examined. Part of the examination is to see that the practitioner is
current with all tax filings, has not committed any felonies, has not had
a hand in helping another commit a felony, and is not currently under
suspicion of having committed a crime.
Term of Enrollment - Each individual enrolled to practice before
the Internal Revenue Service will be accorded active enrollment status
subject to his or her renewal of enrollment as provided in this part:
The director of the Office of Professional Responsibility will issue an
enrollment card to each individual whose application for enrollment to
practice before the Internal Revenue Service is approved. The enrollment
card will be valid for the period stated on the enrollment card and must
be renewed every three years. An individual is not eligible to practice
before the Internal Revenue Service if his or her enrollment card is not
valid.
Condition for renewal: Continuing Professional Education.
In order to qualify for renewal of enrollment, an individual enrolled to
practice before the Internal Revenue Service must certify, on the
application for renewal form prescribed by the Director of the Office of
Professional Responsibility, that he or she has satisfied the following
continuing professional education requirements.
A minimum of 72 hours of continuing education credit must be
completed during each enrollment cycle (a 3 year period). A minimum of 16
hours of continuing education credit, including 2 hours of ethics or
professional conduct, must be completed during each enrollment year of an
enrollment cycle. Treasury Department Circular No. 230 establishes the
guidelines for qualifying education and qualified instructors.
Circ 230 covers the duties and restrictions relating to Practice Before
the Internal Revenue Service. The contents include inter alia: Knowledge
of client's omissions (the practitioners responsibilities when an
omission is discovered), Diligence as to accuracy, Prompt disposition of
pending matters. Circ 230 states OPR's stand on disbarred or suspended
persons and the EAs interaction with them - it is prohibited.
Circ 230 is the instruction manual for any practitioner representing
taxpayers before the Internal Revenue System.
Enrolled Agents are licensed and governed by the federal government. EAs
must demonstrate initial competency and take continuing education
(including Ethics) each year. CPAs and attorneys are licensed and
regulated by the state. Section 32 of the NY tax law is treating EAs
unfairly. The federal government already regulates EAs.
There are currently 28,000 EAs in the United States, 1,599 practicing in
New York State. Frank Degen, EA, FTCP, past president NYSSEA and NAEA is
the Chair of NAEA's Government Relations Committee. He just completed his
term as Chair of the Internal Revenue Service Advisory Council (IRSAC)
and gave testimony on behalf of NAEA at Commissioner Shulman's public
forum on July 30, 09 regarding the regulation of tax preparers. William
Stevenson, EA, FTCP, another member of NYSSEA, has worked closely with
Beanna Whitlock, past Director of National Public Liaison for the IRS.
They worked to change the IRS's mission from compliance to service,
instituted annual ethics for all Enrolled Agents, were instrumental in
persuading the National Office of Appeals to allow EA's and CPA's to
represent taxpayers before the Division of Appeals in Docketed cases.
Bill Stevenson also played some role in convincing President Clinton to
accept an IRS Oversight Board over the objections of the Department of
the Treasury. Pat McDonough, former Director of Practice and now Director
of Enrollment, credits Bill with the check off box, which allows the IRS
to speak to the tax preparer without a POA. NYS was also influenced. This
was a ten-year effort. (I have 3 pages of items Bill has been credited
with.) On April 1, 2009, 8 EAs manned the phone center at the NBC morning
Today Show. Over 5,000 phone-in questions were answered. This was the 2nd
year in a row the Today Show had chosen EAs as their choice of tax
professionals.
I am suggesting that the task force look at regulating of tax
practitioners slowly. IRS Commissioner Shulman will be laying out his
recommendations by the end of this year. If he proscribes: initial
competency, continuing education and disciplinary oversight, NY might be
able to piggyback on his recommendations. Obviously, no one knows what he
will say but I caution our group to take a wait-and-see approach.
Prepared for the NYS Task Force November 30, 2009 meeting by Judy M
Strauss, EA with a little (much) help from my friends.
|
|
|
|
|
· IRS Fact Sheet on Return Preparer
Review
|
|
Return Preparer Review Leads to
Recommendations For New Requirements of Paid Tax Return Preparers
FS-2010-1, January 2010
What is the Return Preparer Review?
In June 2009, IRS Commissioner Doug Shulman called for a comprehensive
review of the paid tax return preparer industry, drawing on all relevant
data and input from interested parties. The goal was to produce a
comprehensive set of recommendations to better leverage the tax return
preparer community, fostering higher compliance with the law by taxpayers
and better service to taxpayers through higher standards of conduct by
paid return preparers.
The Return Preparer Review is the result of an open, transparent dialogue
with all interested parties, including consumer advocates, tax
professional groups, federal and state organizations, IRS advisory
groups, software vendors, and all types of return preparers, among
others. The review incorporates the input from three public meetings and
more than 500 public comments.
Based on the results of the Return Preparer Review, the IRS recommends a
number of steps that it plans to implement for future filing seasons.
These steps will not be in effect for the current 2010 filing season.
What new regulatory requirements will result from the Return Preparer
Review?
Registration: Paid tax return preparers currently have no
registration requirement with the IRS, but they are required to sign the
returns they prepare and provide either their Social Security Number or a
Preparer Tax Identification Number (PTIN). The PTIN has been an optional
number a preparer can apply for if they prefer not to disclose their SSN.
The IRS intends to require individuals who are required to sign a federal
tax return as paid return preparer to register with the IRS and pay a
user fee. Also, the IRS plans to make the use of PTINs mandatory instead
of optional.
The IRS intends to develop an online registration system for paid return
preparers. The IRS plans to issue PTINs to preparers who do not currently
have one as part of the online registration process. The IRS also intends
for the registration process to apply to those paid preparers who already
have a PTIN. These individuals will be reissued their current PTIN when
they register.
Registration renewals and user fee payments would be required every three
years. Registration and PTIN requirements would not apply to volunteer or
other uncompensated preparers.
Competency Testing: Paid tax return preparers who are not attorneys, certified
public accountants or enrolled agents will have to take a competency
test. Currently any person may prepare a federal tax return for any other
person for a fee. There are no minimum competency standards. The IRS
plans to require that paid tax return preparers who are not attorneys,
certified public accountants, or enrolled agents pass an IRS competency
test. It should be noted that certified public accountants, attorneys and
enrolled agents already take competency tests. However, in the future the
IRS will study tax return accuracy of attorneys and certified public
accountants to ensure that this exemption to testing requirements is
warranted.
To avoid business interruption for existing preparers and clients, a
transition rule would give existing preparers approximately three years
to meet the competency testing requirement. There would be two levels of
competency examinations for: (1) Wage and non-business Form 1040 series
and (2) Wage and Small Business Form 1040 series. The IRS plans to
monitor the testing process during the implementation period to study
whether additional tests are necessary and feasible. The IRS plans to add
a third test on business tax preparation after the initial implementation
phase is completed.
The IRS plans to allow preparers who test during the initial three-year
implementation period be permitted to sit for the examination as often as
the examination is offered until they pass the examination provided the
applicable fee is paid for each attempt.
The IRS does not intend to "grandfather" any tax return
preparer from the testing requirement based on return preparation
experience. Once testing is available, the IRS plans to require
unregistered individuals who want to become preparers to pass the
competency test prior to registration and issuance of a PTIN. The IRS
recommends that enrolled actuaries and enrolled retirement plan agents be
required to pass one of the IRS competency tests if they intend to
prepare Form 1040 series returns.
Continuing Education: Paid preparers who are not attorneys, certified public
accountants, enrolled agents, enrolled actuaries, or enrolled retirement
plan agents would be required to complete 15 hours of continuing
education annually. The 15 hours must include three hours of federal tax
law updates, two hours of tax ethics, and 10 hours of other federal tax
law topics.
The IRS intends to have paid preparers self-certify completion of
continuing education requirements during registration renewal. The IRS
plans to conduct periodic checks to ensure compliance with the
requirements.
While attorneys, certified public accountants, enrolled agents, enrolled
actuaries, and enrolled retirement plan agents are not subject to IRS
continuing education requirements or self-certification during the
registration renewal process, they generally must complete continuing
education to retain their professional credentials. If data is collected
in the future that identifies a need for educational requirements for
these individuals, the IRS will consider expanding the continuing
education requirements to them.
Public Database: The IRS will develop a searchable database of tax
return preparers that have registered and passed the competency
examination. This will allow the public to see whether a preparer has
taken appropriate tests and has registered with the IRS.
Compliance Checks: The IRS plans to require all signing paid tax return
preparers be subject to verification of personal and business tax
compliance every three years.
During the initial three-year implementation period, the IRS plans to
conduct the tax compliance checks after registration and prior to the
required renewal date. After the three-year phase-in period, the IRS
intends to require tax compliance as a condition of registration and PTIN
issuance.
For those individuals who are registered and have a PTIN, the IRS intends
to refer potential tax compliance violations discovered at renewal to the
IRS Office of Professional Responsibility for investigation and possible
disciplinary sanctions.
Ethical Standards: The IRS recommends making all signing and non-signing
tax return preparers subject to the provisions of Treasury Department
Circular 230, which will make them subject to discipline for unethical
and unprofessional conduct. The authority granted to those individuals
who either do not have professional licenses or and who are not enrolled
agents, enrolled actuaries or enrolled retirement plan agents will be
limited to preparing tax returns and representing their clients as
currently permitted during the examination of any return prepared by that
tax return preparer.
How will the IRS monitor and regulate
preparers in the near future stemming from new regulatory requirements
being phased in?
Enforcement: The IRS will implement a comprehensive enforcement
strategy that includes applying significant examination and collection
resources to tax return preparer compliance. The IRS will also take steps
during the 2010 filing season to increase education and enforcement of
return preparers.
Evaluation: The IRS will study how to enhance the effectiveness of
traditional enforcement tools and incorporate new non-traditional
enforcement tools, such as directed notices and targeted site visits,
into the enforcement activities directed at tax return preparers. The IRS
will study the impact an enhanced return preparer enforcement strategy
has on taxpayer compliance and consider further changes to the IRS
enforcement strategy dependent on the outcomes realized. The IRS will
increase the coordination among its operating divisions and increase the
staffing of the Office of Professional Responsibility to allow for
increased investigations of practitioners, including tax return preparer
misconduct.
Why is the Return Preparer Review and
resulting new regulatory requirements important? Use of paid preparers has grown steadily in recent decades.
Today, a majority of U.S. taxpayers rely on a paid preparer to assist
them in meeting their federal tax filing obligation. A federal tax return
is one of the most important financial documents that many individuals or
families deal with in a given year. It is unclear exactly how many paid
return preparers there are in the United States. The IRS estimates the
number to be between 900,000 and 1.2 million.
All preparers are subject to some oversight but it varies greatly
depending on their professional affiliations and which state they
practice in. Many preparers do not have to pass any government or
professionally mandated competency requirement before charging to prepare
tax returns. Taxpayers need and deserve return preparers who are ethical,
fully qualified and able to provide the best possible service. In
addition, unethical or incompetent preparers are the most likely to make
mistakes or file incorrect returns, adding to non-compliance. Public
comments received by the Return Preparer Review overwhelmingly expressed
support for increased oversight of paid preparers, particularly those who
are not attorneys, certified public accountants or others authorized to
practice before the IRS.
When will these recommendations be effective? None of the
recommendations are effective for the immediate filing season. Proposed
and final regulations are necessary for implementation of many of these
recommendations, and further information will be available as these are
developed. However, the IRS will immediately increase its education and
enforcement presence in the return preparer community this filing season.
|
|
|
|
|
· GOVERNMENT RELATIONS COMMITTEE REPORT
|
|
Budget Bills -A.09710 and S.6610 -
Introduced by the Governor on 1/19/2010
Would impose a penalty of fifty dollars for each failure by a tax return
preparer who is required to file returns electronically and fails to do
so, unless it is shown that the failure is due to reasonable cause and
not willful neglect.
Eliminates NYS Supreme Court judicial review of Offers In Compromise.
It would be unlawful for tax return preparers and software companies to
charge separately for New York e-file services. A penalty of $500 for the
first violation and $1,000 for each succeeding violation will be imposed.
These provisions are part of a Budget Bill where the law requires that
the budget be enacted by April 1st. So unlike other legislation these two
bills must be enacted. The only questions is whether these provisions
will remain intact.
Senator Kruger's office (Chairman, Senate Finance Committee) informing
that they had a commitment from the Budget, the Ways and Means and the
Senate Finance Committees that an exemption from registration for
Enrolled Agents would be in the Governor's Budget Bill never
materialized.
S.6117 - Which eliminates the registration of tax return preparers
was reintroduced on 1/6/2010. This bill due to the Senate impasse last
session went nowhere even though a companion bill passed in the Assembly.
NYSSEA'S COURT CASE
The oral argument before the New York State Supreme Court Judge Marcy S.
Freidman, New York County on NYSSEA's motion to have the Tax Return
Preparer Registration Law as it applies to Enrolled Agents declared
unconstitutional was held on January 28, 2010. David J. Silverman, EA,
Chairman of the NYSSEA Government Relations Committee attended. A report
on the proceedings will be posted on NYSSEA's website.
David J. Silverman, EA
866 U.N. Plaza S-415
New York, NY 10017-1822
212-752-6983 (phone)
212-758-5478 (fax)
djs@silvermanstaxadvice.net
www.silvermanstaxadvice.net
|
|
|
|
|
· CURRENT STATE AND LOCAL TAX
DEVELOPMENTS
|
|
Temporary Stay Exception Removed From
Regulation
A New York personal income tax regulation has been amended to remove
language providing for a temporary stay exception from the definition of
"permanent place of abode" for purposes of determining whether
an individual is a resident. The amendment applies to taxable years
ending on or after December 31, 2008. Reg. Sec. 105.20(e)(1), New York
Department of Taxation and Finance, effective December 24, 2008,
applicable as noted.
Guidance Provided on Classification of Real Estate Salespeople
The New York City Department of Finance has issued a statement of audit
procedure (SAP) regarding the unincorporated business tax classification
of real estate salespeople as employees or independent contractors. The
SAP lists the mandatory safe harbor requirements for an individual to be
classified as an employee rather than an independent contractor and notes
that those meeting the requirements will not be subject to the tax with
respect to their activities as real estate salespeople or associate
brokers. An individual who does not meet the safe harbor requirements
will be classified as an employee or independent contractor based upon an
examination of the facts and circumstances of his or her particular
situation. Statement of Audit Procedure UBT-2009-1, New York City
Department of Finance, February 12, 2009.
LLC and LLP Publication Revised
The New York State Department of Taxation and Finance has revised a
publication that deals with the tax status of limited liability companies
(LLCs) and limited liability partnerships (LLPs) for purposes of state
personal and corporate income taxes. The publication is designed to serve
as a basic guide for tax professionals and members of LLCs and LLPs and
generally applies to tax years beginning after 2007. Publication 16, New
York Department of Taxation and Finance, September 2009.
Consumer Rights Publication Updated
The New York Department of Taxation and Finance has updated a personal
income tax document, Publication 135, Consumer Bill of Rights Regarding
Tax Preparers. As of January 1 of each year, certain personal income tax
return preparers are required to obtain this publication and give a copy
to each of their customers before any further discussions with them.
Publication 135 , Department of Taxation and Finance, November 2009.
Income Tax: Summary of 2009 Budget Bill
Changes Issued
The New York Department of Taxation and Finance has issued a memorandum
containing summaries of the personal income tax changes enacted as part
of the 2009-2010 budget. Topics covered in the memorandum include the
following:
- a change in the definition of "resident
individual;"
- the fuel cell electric generating equipment
credit;
- the transportation improvement contribution
credit;
- authorization for reciprocal agreements for
crediting certain payments against outstanding debts;
- an amendment to the definition of "New York
source income" for nonresident individuals;
- filing fees for partnerships;
- the low-income housing credit;
- the Empire Zone program;
- a limit on itemized deductions;
- a revision to tax rates;
- tax benefit recapture provisions;
- a revision to the penalty for underpayment of
estimated tax;
- the Empire State film production credit;
- tax compliance and enforcement;
- the New York City school tax credit;
- a deduction for certain student loan interest;
- the consumer bill of rights regarding tax
preparers; and
- the tax preparer registration program.
TSB-M-09(11)I , Office of Tax Policy Analysis, New York Department of
Taxation and Finance, October 19, 2009.
Taxpayer Entitled to Hearing on Refund Claim
In a New York personal income tax case involving a taxpayer whose refund
claim was filed well beyond the expiration of the statute of limitations,
the Division of Taxation's motion for summary determination was denied.
The taxpayer's claim relied, in part, on the special refund authority
under Tax Law §697(d). It was clear that the division did not erroneously
or illegally collect any monies from the taxpayer and that he voluntarily
paid the amount. However, it remained unclear whether the amount was paid
under a mistake of fact or a mistake of law. The record was virtually
barren regarding the circumstances prompting the reporting of the capital
gains in question. Because it was not possible to resolve the issues
under Tax Law §697(d) based on the papers presented, a hearing had to be
held. Cassos , New York Division of Tax Appeals, Administrative Law Judge
Unit, DTA No. 823077, November 19, 2009.
Limited Amnesty Program Discussed
The New York Department of Taxation and Finance has issued a memorandum
that discusses the Penalty and Interest Discount (PAID) Program, which
encourages eligible taxpayers to pay off their eligible tax liabilities
that are at least three years old. A taxpayer who participates in the
program will receive a reduction in the accrued interest and penalty
currently owed on eligible tax liabilities. The program period will begin
on January 15, 2010, and end on March 15, 2010. However, if the taxpayer
does not make full payment of an eligible liability by March 15, 2010,
the taxpayer will not receive any savings on that liability.
TSB-M-09(13)C, TSB-M-09(14)I, TSB-M-09(12)M, TSB-M-09(10)R, TSB-M-09(20)
S, New York Department of Taxation and Finance, December 14, 2009.
Partnership Filing Fee Discussed
The New York Department of Taxation and Finance has issued a personal
income tax memorandum discussing the filing fee that now applies to
partnerships that are not limited liability companies (LLCs) or limited
liability partnerships (LLPs) ( i.e., regular partnerships). The filing fee
for regular partnerships applies only if the partnership's New York
source gross income is at least $1 million. The filing fee applies to tax
years beginning on or after January 1, 2009, and is due within 30 days of
the last day of the partnership's tax year. The amount of the filing fee
is based on the New York source gross income of the regular partnership.
The New York source gross income is calculated for the tax year
immediately preceding the tax year for which the fee is due. No income
tax credits may be applied against the filing fee. The amount of the
filing fee for a regular partnership is determined as follows:
- $500 if New York source gross income is exactly
$1 million;
- $1,500 if New York source gross income is more
than $1 million but not over $5 million;
- $3,000 if New York source gross income is more
than $5 million but not over $25 million; and
- $4,500 if New York source gross income is more
than $25 million.
In addition, New York City has been granted the authority to impose a
filing fee on regular partnerships. The filing fee would be similar to
the state fee, except the amount of the fee would be based on New York
City gross income. To date, New York City has not acted to impose this
fee. TSB-M-09(8)I , Office of Tax Policy Analysis, New York Department of
Taxation and Finance, July 8, 2009.
David J. Silverman, EA
|
|
|
|
|
· Haiti Relief Donations Qualify for
Immediate Tax Relief
|
|
IR-2010-12, Jan. 25, 2010
WASHINGTON People who give to
charities providing earthquake relief in Haiti can claim these donations
on the tax return they are completing this season, according to the
Internal Revenue Service.
Taxpayers who itemize deductions on their 2009 return qualify for this
special tax relief provision, enacted Jan. 22. Only cash contributions
made to these charities after Jan. 11, 2010, and before March 1, 2010,
are eligible. This includes contributions made by text message, check,
credit card or debit card.
"Americans have opened their hearts to help those affected by the
Haiti earthquake," said IRS Commissioner Doug Shulman." This
new law provides an immediate tax benefit for the many taxpayers who have
made generous donations."
Taxpayers can benefit from their donations, almost immediately, by filing
their 2009 returns early, filing electronically and choosing direct
deposit. Refunds take as few as ten days and can be directly deposited
into a savings, checking or brokerage account, or used to purchase Series
I U.S. savings bonds.
The new law only applies to cash (as opposed to property) contributions.
The contributions must be made specifically for the relief of victims in
areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the
option of deducting these contributions on either their 2009 or 2010
returns, but not both.
To get a tax benefit, taxpayers must itemize their deductions on Schedule
A. Those who claim the standard deduction, including all short-form
filers, are not eligible.
Taxpayers should be sure their contributions go to qualified charities.
Most organizations eligible to receive tax-deductible donations are
listed in a searchable online database available on IRS.gov under Search
for Charities. Some organizations, such as churches or governments, may
be qualified even though they are not listed on IRS.gov. Donors can find
out more about organizations helping Haitian earthquake victims from
agencies such as USAID.
The IRS reminds donors that contributions to foreign organizations
generally are not deductible. IRS Publication 526, Charitable
Contributions, provides information on making contributions to charities.
Federal law requires that taxpayers keep a record of any deductible
donations they make. For donations by text message, a telephone bill will
meet the recordkeeping requirement if it shows the name of the donee
organization, the date of the contribution and the amount of the
contribution. For cash contributions made by other means, be sure to keep
a bank record, such as a cancelled check, or a receipt from the charity
showing the name of the charity and the date and amount of the
contribution. Publication 526 has further details on the recordkeeping
rules for cash contributions.
This year’s special Haiti relief provision is modeled on a 2005 law that,
in the wake of the Dec. 26, 2004, Indian Ocean tsunami, allowed taxpayers
to deduct donations they made during January 2005 as if they made the
donations in 2004.
|
|
|
|
|
