03-22-2013 Tax E-Alert: New Tax Credit Guidance from IRS, Clarification of Qualifying Leasehold Improvement Property, Tax Season Debrief on the Power Hour and More! 


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      AICPA
    March 22, 2013
    Tax Section News
     
      Exclusive Tax Section member communications  
     
    In This Issue
        TOP NEWS  
    IRS Offers Relief to Many Extension Requesters Claiming Tax Benefits
    Taxpayers Have Additional Time to Claim the Work Opportunity Tax Credit
    IRS Clarifies Eligibility of HVAC Units as Qualifying Leasehold Improvement Property
    New Temporary Guidance on R&D Tax Credit Allocation for Consolidated Groups
    AICPA Submits Comments to IRS Proposed Rules on Employer Shared Responsibility for Health Insurance Coverage
    House Discussion Draft Proposes Tax Reform to Help Small Businesses
    Other Tax News from the Journal of Accountancy
      TOOLS & RESOURCES
    The Danger in Providing Comfort Letters (Blog)
    Get Tax Laws and Regulations in One Place – the Cumulative Tax Guide
    Calling All Exempt Organization Experts!
    AICPA Partnership Checklists, Practice Guides, and Resources Updated for 2012
      UPCOMING EVENTS
    AICPA Employee Benefits Plans Conference
    Tax Training Week at the Bellagio in Las Vegas
    AICPA Not-for-Profit Industry Conference
    AICPA Advanced Estate Planning Conference
    TAX POWER HOUR

    Coming Up on the Tax Power Hour: Tax Season Debrief (April) and Social Media for CPAs (May)
    Contact us

    taxsection@aicpa.org

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    Upcoming Events
     
    AICPA Employee Benefits Plan Conference
    May 14 - 16, 2013
    Grapevine (Dallas), TX
    • $75 Early-bird discount if you register by 3/30/13
    • Tax Section members save an additional $100

    AICPA Tax Planning, Compliance and Controversy Conference For Businesses and Individuals

    May 15 - 17, 2013
    Las Vegas, NV

    • $75 Early-bird discount if you register by 3/31/13
    • Tax Section members save an additional $100
    AICPA Conference on Tax Strategies for the High-Income Individual

    May 20 - 21, 2013
    Las Vegas, NV

    • $75 Early-bird discount if you register by 4/5/13
    • Tax Section members save an additional $100
       
    Next Tax Power Hour
       

    Annual Tax Season Debrief
    April 25 from
    1pm - 2:30pm ET
    Free, No CPE Available

    Tax season is over. How did it go? We’ve extended our hour to 90 minutes so we can cover both technical and administrative issues. From a technical perspective, how did you incorporate last minute legislative and regulatory changes? Did they pose any challenges for preparing returns? If so, how did you navigate them? From an administrative perspective, did you have any significant or unusual processing issues? This month’s discussion will help you look back and break down your performance so you can consider changes you may want to implement today and other issues to consider later as you start the planning process for next year.

     
     
    Top News
     
    IRS Offers Relief to Many Extension Requesters Claiming Tax Benefits
    Under Notice 2013-24, relief is available to individuals and businesses filing extensions for tax returns claiming tax benefits using forms that were not released until March by the IRS. Some of the benefits delayed included depreciation deductions and a variety of business credits. The relief applies to the late payment penalty, but interest still applies to any tax payment made after the original deadline.

    The complete list of eligible forms covered by the relief is included in the Notice.
    Taxpayers Have Additional Time to Claim the Work Opportunity Tax Credit

    Good news for employers who hired certain qualifying employees (“members of targeted groups”) on or after January 1, 2012, and on or before March 31, 2013 - they have until April 29 to submit a completed Form 8850 to claim the Work Opportunity Tax Credit. IRS Notice 2013-14 provides additional time to file Form 8850, Pre-screening Notice and Request for the Worker Opportunity Credit, to the Designated Local Agencies (DLAs) for certification of the WOTC.

    IRS Clarifies Eligibility of HVAC Units as Qualifying Leasehold Improvement Property

    The IRS announced in Chief Counsel Advice 201310028 that heating, ventilation, air-conditioning (HVAC) units installed on the roof of the building or on a concrete pad adjacent to the building do not qualify as leasehold improvements under §168(e)(6). The IRS concluded that a leasehold improvement has to be made to the inside or inner portion of the building to be considered qualifying leasehold improvement property. This is an unfavorable outcome for taxpayers, as HVAC units installed on the roof of a building or on a concrete pad will be treated as real property, which will be depreciated over either 27.5 or 39 years (residential and non-residential real property useful lives, respectively), rather than the shorter 15-year life as qualifying leasehold improvement property.

    New Temporary Guidance on R&D Tax Credit Allocation for Consolidated Groups

    The IRS has provided interim guidance (Notice 2013-20) on allocating research and development tax credits among consolidated group members. The notice provides guidance on allocating the credits proportionately, based on each member’s contribution to the consolidated group’s total qualified research expenditures. The new rule is in effect for tax years beginning December 31, 2011. The new guidance also applies to §45C, §45G, §45O, and §280C.

    AICPA Comments on IRS Proposed Rules on Employer Shared Responsibility for Health Insurance Coverage

    On March 14, the AICPA submitted comments on the proposed regulations providing guidance under IRC §4980H on employer shared responsibility for health insurance coverage recently issued by the IRS.

    Here are a few highlights of some of the AICPA key recommendations:

    • The definition of the term “dependent” should be extended to treat a child as a dependent for the entire month in which the child turns 21.
    • Recommendations with regards to the determination of “applicable large employer status”, including the seasonal worker exception as well as the calculation of number of full-time employees.
    • Recommendations related to the determination of “full-time employees”, including the non-hourly employee calculation using a days worked equivalency and also the look-back measurement method and new variable hour and new seasonal employees.
    • Recommendations regarding to the imposition of assessable payments under sections 4980H(a) and 4980H(b), as well as safe harbors, and the allocated reduction of 30 full-time employees.

     

    House Discussion Draft Proposes Tax Reform to Help Small Businesses
    House Ways and Means Committee Chairman Dave Camp recently released a discussion draft of tax reforms to help small businesses. Part 2 of the discussion draft proposed simplification of business tax return due dates, an initiative that has been championed by the AICPA. The proposal would alleviate the problem of receiving late Schedules K-1 information, which often prevents the pass-through owners from filing accurate and timely returns. The proposal creates a logical set of due dates focused on allowing a more timely flow of information from pass-through entities to their owners.

    The discussion draft also proposed widely supported reforms such as permanent section 179 expensing and expansion of the “cash accounting” method for businesses with gross receipts less than $10 million. It also outlines two separate options designed to achieve greater uniformity between S corporations and partnerships. The first option would revise current tax rules, while the second option proposed an entirely new unified pass-through regime.

    For more information on the due dates proposal and the discussion draft materials, visit our Due Dates web page.
    Other Tax News from the Journal of Accountancy
      • Tax reform prospects good, say veterans of 1986 reforms (03/19/13)  
    • Regs. issued on asset transfers to foreign corporations (03/18/13)
    • Tax Court stops taxpayers from avoiding 40% penalty by conceding on alternative grounds (03/15/13)
    • Flight Attendant cannot claim foreign earned income exclusion for wages earned in international airspace and U.S. (3/14/13)
    • Sec. 6708 regs. permit material advisers to request extension (03/07/13)
    AICPA TOOLS & RESOURCES
     
    The Danger in Providing Comfort Letters (Blog)
    Many CPAs are asked to provide comfort letters for clients, but Susan Coffey, AICPA Senior Vice President of Public Practice and Global Alliances, outlines the pitfalls of doing so in her most recent AICPA Insights blog. She also provides links to helpful AICPA resources for members seeking more information and guidance on this issue.
    Get Tax Laws and Regulations in One Place – the Cumulative Tax Guide

    New tax laws and regulations are covered in over 600 pages of easy-to-use, indexed explanations and analysis, allowing you to zero in on the information you need. The Cumulative Tax Guide is categorized by title, topic, and code section and is presented in one reference source that you can search electronically, with hyperlinks to connect you directly to the cited source documents. Tax Section members receive a 10% discount!

    Calling All Exempt Organization Experts!

    During the AICPA Not-For-Profit Industry Conference (June 19 – 21, 2013), the Tax Section is hosting the extremely popular Palm Read. The Palm Read is a 30 minute session and meant to help anyone who wants to have a bird’s eye view and understanding of what their exempt organization’s 990 return means. It is a great opportunity for exempt organizations to get an “impressionistic reading” of their already filed 990 returns.

    We are hoping to provide this free service again, but we need your help! We need volunteers to offer their time to participate in the Palm Read. If you are an exempt organization expert and you are planning on attending the AICPA Not-for-Profit Industry Conference, contact Melissa Labant at mlabant@aicpa.org if you are interested in volunteering.

    AICPA Partnership Checklists, Practice Guides, and Resources Updated for 2012

    The AICPA Partner’s Basis Schedule and Basis Adjustments Checklist has been updated for 2012. Other partnership tools and resources for Tax Section members include:
    Partnership Elections Grid
    Partnership Liabilities Practice Guide
    Partnership Allocations Practice Guide

    In addition, the 2012 Partnership Form 1065 Checklists (available in Word & PDF) include:
    • Long, Short & Mini Checklists
    • LLC Addendum to Partnership Return of Income Checklist
    • Passive Activity Checklist

    UPCOMING EVENTS
     
    AICPA Employee Benefits Plans Conference
    May 14 -16, 2013
    Gaylord Texan, Grapevine (Dallas), TX
    Tax Training Week at the Bellagio in Las Vegas

    This year, when you register for the AICPA Tax Planning, Compliance and Controversy Conference together with the AICPA Conference on Tax Strategies for the High-Income Individual you save 10% automatically at checkout when purchased online. 

    AICPA Tax Planning, Compliance and Controversy Conference...For Businesses and Individuals, May 15 – 17, 2013

    AICPA Conference on Tax Strategies for the High-Income Individual, May 20 - 21, 2013

    AICPA Not-for-Profit Industry Conference
    June 20-21, 2013
    Marriott Wardman Park, Washington, DC
    AICPA Advanced Estate Planning Conference
    July 15-17, 2013
    Baltimore Marriott Waterfront, Baltimore, MD
    Coming Up on the Tax Power Hour: Tax Season Debrief (April) and Social Media for CPAs (May)
    taxpowerhour

    In April, we will take a look back at this year’s tax filing season. In our Annual Tax Season Debrief, we will be joined by two practitioners who will review over their busy season and answer the question: How did it go? We’ve extended our hour to 90 minutes so we can cover both technical aspects (e.g., How did you handle Congress’ last-minute tax law change and the IRS delay in starting filing season?) and administrative perspectives (e.g., Did you have any significant or unusual processing issues?).

    The Debrief will help you look back and break down your performance so you can consider changes you may want to implement today and other issues to consider later this year as you start the planning process for next year.

    Coming up in May, we will examine integrating social media into your firm’s plans. How do you develop successful, measurable social media plans to advance your firm’s business goals? What are some real life examples of using social media plans in your practice? What free social media resources are available? The AICPA’s social media and member engagement strategist, Stacie Saunders, will answer these questions and discuss social media’s impact on your practice!

    The Tax Power Hour is our monthly webcast for Tax Section members only, that focuses on strategies to help tax practitioners save time, reduce stress and run an efficient practice through practical discussions on topics such as Practice Management, Business Development, Leveraging Technology and more. Speakers are tax practitioners and other experts sharing their advice and best practices to help make you more profitable.

    If you missed a previous Tax Power Hour, you can listen again anytime. Archives are available for one year after each event.

     
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