The Third Time's a Charm? |
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Written by William H. Thomas
on Tuesday, 17 January 2012 |
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The Internal Revenue Service is going back to the well one more time as it released the Offshore Voluntary Disclosure Program (OVDP) for a third time in as many years. For Uncle Sam, this program has been very successful in raising approximately $4.4 Billion.
Little has changed from the previous Offshore Voluntary Disclosure Program published earlier in our blog. The IRS intends for this program to function similarly by offering an opportunity for taxpayers to report offshore accounts and get current with their taxes.
The benefit of this program is the IRS has established no end date to “OVDP version 3”. The IRS has issued one large caveat to the third installment of the OVDP by stating the program can be changed or ended entirely at any point.
Obviously, the incentive is to come forward as soon as possible because those who do will not face the substantial penalties for fraud and foreign information returns along with the increased likelihood of criminal prosecution.
To put this in perspective, the current OVDP leaves taxpayers with a 27.5 percent penalty on the highest balance of the foreign asset, not to mention all the back taxes and interest for all years the assets were unreported. Accuracy-related and/or delinquent penalties will be tacked on for those back years, as well.
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2% Payroll Tax reduction extended for at least 2 months |
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Written by Glenn Bailey
on Wednesday, 04 January 2012 |
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Congress opted to extend the 2% reduction in Social Security withholding from employees and the similar reduction in self employment tax thru February 29th, setting up another legislative showdown on the subject 2 months from now.
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IMPORTANT CHANGE TO SCHEDULES C, E AND F |
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Written by Kelly Lopez
on Wednesday, 04 January 2012 |
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IRS recently released 2011’s form 1040 and its corresponding schedules C, E and F. These schedules are used by sole proprietors to report different kinds of business income. IRS has added questions dealing with 1099 reporting to all three schedules for tax year 2011. The first question asks if the taxpayer has made any payments in 2011 that would require him/her to file Form(s) 1099. If the answer is yes, then the next item asks whether the taxpayer did or will file all required Forms 1099.
Generally, a taxpayer must file Form 1099-MISC if he/she paid at least $600 in rents, services, prizes, medical and health care payments and other income payments. There are a few exceptions to this rule, for instance, payments made to corporations. Additional exceptions and other instructions (including due dates) can be found on IRS’ “General Instructions for certain information returns,” available online at www.irs.gov.
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Make Hay While the Sun Shines! |
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Written by Eric Fletcher
on Thursday, 22 December 2011 |
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As the on-going battle over the extension of the payroll tax cuts continues in Congress, those of us in the tax professional community are left scratching our heads and trying to advise our clients on what will happen with respect to income and estate taxes over the next few years. The only thing I can say to my clients with any confidence is that anyone who tries to predict what tax changes may emerge from this Congress is talking through his or her hat. Uncertainty continues to be the theme with respect to tax and fiscal policy in the current political environment of Washington.
To that end, I strongly advise that my clients follow the time honored adage, “Make hay while the sun shines.” In some respects, the current income and estate tax law provide really great opportunities and anyone concerned about higher income tax rates or fundamental changes to our estate tax system would be well served to seize on these opportunities while they still exist.
You can look to prior entries in this blog to highlight many of the taxpayer friendly provisions of the code that are set to expire after 2011 and 2012, but below I am highlighting what I consider to be the big three opportunities.
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2012 Optional Standard Mileage |
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Written by Scott Reddersen
on Tuesday, 20 December 2011 |
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Last week, the Internal Revenue Service issued the 2012 optional standard mileage rates for taxpayers who choose to use this method in calculating the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
The rate for business miles driven remains unchanged from the mid-year adjustment on July 1, 2011. The charitable mileage rate remains unchanged from 2011 as well, while the medical and moving mileage rate is reduced by 0.5 cents per mile.
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