Lee B

Cases detailed in the IRS report related to payroll and employment taxes included: •The owner of a Mississippi security company was sentenced to two years in prison, three years of supervised release, and restitution for failing to pay withheld taxes. The owner of the company entered into an agreement with the IRS to pay the taxes in installments, but did not make payments and attempted to avoid IRS levies by transferring the company’s assets to new companies. Some of the taxes owed were collected, but the owner was to pay $165,076 in restitution, which was the amount of taxes still owed. •The owner of a Rhode Island staffing agency was sentenced to two years in prison, three years of supervised release, and restitution for failing to report wages paid and tax withheld. The owner of the company withheld federal taxes from employees’ pay, but did not report about $4.3 million in wages paid to the IRS. The company evaded paying about $1.3 million in withheld taxes and employer contributions. •A co-owner of 11 Massachusetts restaurants was sentenced to 30 months in prison for a scheme to avoid paying income and employment taxes, the IRS said. Employees of the restaurants were paid in cash, and federal employment taxes were not withheld or paid to the IRS, the agency said. The employers misrepresented the number of employees working at the restaurants and the wages they were paid, and did not file Forms W-2, the IRS said. Additionally, the restaurants’ income and wages paid were misrepresented to tax preparers, leading to the filing of false tax returns, the IRS said. The restaurants’ payroll was also understated to workers’ compensation providers, reducing premiums owed. The co-owner of the restaurants was to pay $2.3 million in restitution to the IRS. •The owner of an Illinois scrap-iron refining company was sentenced to one year in prison, one year of supervised release, and restitution for concealing from the IRS wages paid to employees. The owner of the company paid at least $11.6 million in cash wages to at least 50 employees and did not withhold taxes under the Federal Insurance Contributions Act and Medicare. The owner was to pay $1.3 million in restitution. •The owner of a Nevada home-care provider was sentenced to a year and a day in prison and restitution for evading payment of withheld employment taxes and penalties. The employees of the provider had employment taxes withheld from their pay, but the taxes were not paid to the IRS. The agency assessed penalties against the provider’s owner, but the owner attempted to avoid paying the penalties or taxes owed, including by changing the name of the business. The owner was to pay $1.2 million in restitution, the IRS said. •The owner of a Missouri school bus provider was sentenced to three years in prison and restitution for failing to pay about $1.7 million in withheld employment taxes to the IRS. The owner of the company did not deposit withheld income, FICA, or Medicare taxes, and did not pay the FICA employer contribution, the Justice Department said in a news release. The company operated under three names, and each of the company’s identities accumulated unpaid employment taxes, the department said. The owner was to pay restitution of $1.7 million. •The chief executive officer of a Virginia software company was sentenced to 21 months in prison, three years of supervised release, and restitution for failing to pay withheld employment taxes to the IRS. The CEO and vice president of finance of the company paid some employees by manually bypassing the company’s payroll and accounting systems. The employees received the correct amount of pay, including taxes deducted, but the taxes were not paid to the IRS. The company in turn reported incorrect amounts of tax owed on Forms 941, Employer’s Quarterly Federal Tax Return. Additionally, the company did not pay all of employees’ voluntary retirement contributions to the company retirement plan. The CEO and vice president were to pay more than $1.8 million in restitution for the unpaid taxes. It warms my heart to see these scoundrels pay for their idiocy!

In prior years, some preparers had to exclude all ATX Files from the scrutiny of their firewall and their security programs

"The IRS has authority to charge a user fee for preparer tax identification numbers (PTINs) a federal appeals court held on Friday, paving the way for the agency to reinstate the charges for obtaining and renewing a PTIN". . . . . . This may be nitpicking, but the appeals court ruled that the IRS has the legal authority. The fee question is returning to the District Court for determination. "Having upheld the IRS’s authority to require return preparers to obtain a PTIN and charge a fee, the court then discussed whether the fee the IRS charged was excessive. It noted at first that the IRS had lowered the fee from $50 to $33 (plus a separate processing fee). The appeals court remanded the case to the district court to determine whether the fee is reasonable and complies with the IOAA"

"Lost amid the confusion of the federal government shutdown this year was a new set of penalties the IRS began to issue as part of the agency’s ongoing enforcement of the Affordable Care Act. In the final days of 2018, the agency started issuing notices to assess penalties against employers that failed to file Forms 1094-C and 1095-C with the IRS or to furnish 1095-C forms to employees under IRC Sections 6721 and 6722 for the 2015 or 2016 tax year. These penalties are separate from the IRC Section 4980H penalties for failing to offer the required healthcare coverage. It appears the IRS is calculating these IRC 6721 and 6722 penalty assessments for certain employers based on the number of W-2s the employers filed with the IRS. These IRC 6721/6722 penalty assessments are proposed using Letter 5005-A and Form 886-A. This penalty assessment process is a follow-up to Letter 5699. The IRS sends Letter 5699 to employers that did not file any ACA information returns (i.e., 1094-C/1095-C schedules) for a reporting year. The employer must, in essence, respond to (1) confirm the name the employer used when filing its ACA information returns and identification information for tracking, (2) provide the ACA information returns or indicate when they will be submitted, or (3) explain why the employer is not an Applicable Large Employer, which is an employer with 50 or more full-time employees and full-time equivalent employees. Failure to respond to Letter 5699 or to take action to address any filing issues resulted in the penalty assessment being issued in Letter 5005-A/Form 886-A. The penalties for failing to file and furnish are indexed each tax year. For the 2018 tax year, penalties for failing to file and furnish can be as much as $540 per return. The penalties for the 2016 tax year can be as much as $520 per return." This doubling up or piggybacking of penalties will be a huge shock for any ALE who both did not provide health insurance and also did not file and furnish Forms 1094C and 1095C. The combined penalties for a smaller sized ALE could easily approach $100k

Then in reality, the son is making a gift to the father. File the gift tax return and go ahead.

Ask and you shall receive . Here is the link for the IRS page listing all of their Interactive assistants : https://www.irs.gov/help/ita Judy, perhaps you could pin this link at the beginning ?

My browser on my desktop updated automatically. My browser on my android phone and my Chromebook did not. It probably depends on your device settings, so you do need to check and make sure.

Here is a link for the IRS Interactive Assistant for determining Filing Status : https://www.irs.gov/help/ita/what-is-my-filing-status I stumbled across these Assistants recently, they are really easy to use and get right to the point.

If you use the Chrome Browser, make sure you are updated to the most recent version. If you search, you will multiple stories about the hack which is currently active and simple instructions of how to check and update. The newest version is (72.0.3626.121 )

I think the timing is a problem. It gives the distinct impression that the prescription was written as a favor to a client.

This not a slam dunk decision. There are many many tech articles out there delineating multiple problems with Win 10 updates since last spring. You can choose to ignore those problems, but lets's not pretend that Win 10 is trouble free and the best invention since sliced bread! In fact, a recent Win 10 update had no new features, but was devoted to fixing 77 known problems created by previous Win 10 updates !

To paraphrase a famous person, "That's the thing about opinions, everyone has one.

Actually, its only the end of free support. It was only several months ago that the number of Win 10 units exceeded the number of Win 7 units on a worldwide basis. As a result, Microsoft recently announced three more years of additional support for Win 7 on a paid basis: Year 1 support - $ 50 Year 2 support - $ 100 Year 3 support - $200. This old horse is far from dead !

Just do a google search, you will find multiple legit sources for both the OS and computers with Win 7 Pro installed. Last time I looked Dell was still selling certified refurbished computers with Win 7 Pro installed.

In the middle of the bill is what I believe to be new tax extender : Sec. 122. Exclusion from gross income of discharge of qualified principal residence indebtedness (sec. 108(a)(1)(E)). The provision provides through 2019 a maximum exclusion from gross income of $2,000,000 for a discharge of qualified principal residence indebtedness. Generally, indebtedness must be the result of acquisition, construction, or substantial improvement of primary residence. The provision also modifies the exclusion to apply to qualified principal residence indebtedness that is discharged pursuant to a binding written agreement entered into before January 1, 2020. Very interesting, how many taxpayers really need a $2,000,000 exclusion ? I'll bet there is a special favor behind the inclusion of this item!!!!

If a refund is due, you can file a tax return without the will being probated and without a court appointed executor. My wife signed her mother's tax return who passed in early 2018 with this exact scenario. Suggest you review instructions for Form 1310.

Having upheld the IRS’s authority to require return preparers to obtain a PTIN and charge a fee, the court then discussed whether the fee the IRS charged was excessive. It noted at first that the IRS had lowered the fee from $50 to $33 (plus a separate processing fee). The appeals court remanded the case to the district court to determine whether the fee is reasonable and complies with the IOAA Interesting,so the fee question is still up in the air? What a long drawn out ??????

I think the second one is for the amounts found by the client while looking at the ceiling.

Woah, now we are in the twilight zone

Based on the CPE classes that I have attended, a 3115 can reach back as far the incorrect method has been in use. The classic situation is the correction of a incorrect depreciation method going back for as many years as required.

I doubt they are concerned about the extra work they cause. I am certain they are far more concerned about the pressure they are receiving from the lobbyists of the 50 Industry groups that are pushing hard for this bill to be passed!

This commentary from Politico spells out the murky future of this bill: EXTENDERS PROCESS GETS EXTENDED: Remember when tax writers believed they had to restore those dozens of temporary tax breaks within a year of their expiration? No more: The last extenders package passed in February 2018, more than a year after the incentives expired. And this year? There’s no telling when any of the tax breaks might get revived. The Senate Finance Committee — led by Chairman Chuck Grassley (R-Iowa), a reliable supporter of preferences for biodiesel — has been pushing to wrap up extenders more quickly. But people watching the issue say they detect no real sense of urgency out of the House, and that the extenders are likely to slip past April 15 unless something changes — meaning that the current filing season would end, and taxpayers and businesses would, presumably, be filing without a clear understanding of whether those tax breaks would once more get new life. Of course, the tax-writing committees know that a lot of businesses at least file extensions until Oct. 15, which could ease the pressure for the House and the Senate to make a deal. It’s also far from the first issue where House Ways and Means Chairman Richard Neal (D-Mass.) has been proceeding methodically (think the president's tax returns), as he tries to integrate 10 new Democrats into the panel. Still, Sen. Ron Wyden of Oregon, the top Democrat at the Finance Committee, told Pro Tax’s Aaron Lorenzo on Tuesday that he believes a bit of support is beginning to take hold in the House, where new Ways and Means lawmakers have been learning about extenders. “I’ve seen it building because everybody’s getting the same kind of concerns from home on uncertainty and what’s the timetable,” Wyden said. And stay tuned: Grassley and Wyden will soon lay another marker on tax extenders, likely on Thursday, according to a Finance source. The observation that the passage of this bill may not happen until after April 15th is an on point example of the times that we live in.

Here is a link to the actual text of the 43 page bill: https://www.finance.senate.gov/imo/media/doc/116.S.xxx - Tax Extender and Disaster Relief Act of 2019 - MCG19154.pdf Here is a link to the text of a 5 page summary of the bill: https://www.finance.senate.gov/imo/media/doc/Tax Extender and Disaster Relief Act of 2019 Summary.pdf

A bipartisan bill combining the usual tax extenders with a disaster relief bill which would be retroactive to Jan 1st, 2018 thru December 31st 2019 is on the move in the Senate cosponsored by senior members of both parties. The bill extends 26 provisions that expired at the end of 2017 and 3 provisions that expired at the end of 2018, including: 1. Tuition Fees deduction reducing AGI 2. 7.5 % Floor Medical Deduction 3. Itemized deduction of PMI as qualifying mortgage interest. 4. The usual Business Energy Tax Credits 5. A grab bag of Disaster Relief Tax Benefits. Unfortunately, there is no mention of any TCJA Technical Corrections.

However, if you don't file the 3115, you still would have to recapture the depreciation that should have been deducted.