04-19-2013TaxE-Alert: Updates on Presidential Budget Tax Reform, AICPA Testimony on House and Senate Tax Proposals, Tax Season Debrief on the next Power Hour and More! 


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    Learn more about how the AICPA is your voice in Washington on tax issues that matter to CPA's!
           
      AICPA
    April 5, 2013
    Tax Section News
     
      Exclusive Tax Section member communications  
     
    In This Issue
        TOP NEWS  
    AICPA Addresses “Challenging Tax Season” with Senate
    IRS Announces Relief for Taxpayers Affected by Boston Marathon Explosions
    President's FY 2014 Proposed Budget to Increase Taxes on High Income Individuals
    Online Retailers Must Collect Sales Tax from New York Residents
    AICPA Submits Proposals and Reports for Civil Tax Penalties Reform
    AICPA Calls for Clearer Form 1099-C Information Reporting Rules
    IRS Provides Transitional Relief for Claiming Certain Fuel Tax Credits
    Other Tax News from the Journal of Accountancy
      TOOLS & RESOURCES
    Best Planning Ideas for 2013 from the Planner Newsletter
    Get Tax Laws and Regulations in One Place – the 2013 Cumulative Tax Guide
    Form I-9 (Employment Eligibility Verification) Updated by CIS
    Volunteer Opportunities with the Uniform CPA Examination
    Calling all Exempt Organization Experts
    Share Your Expertise and Help the Profession. Apply to Volunteer for an AICPA Tax Committee by May 15
      UPCOMING EVENTS
    AICPA Tax Planning, Compliance and Controversy Conference...For Businesses and Individuals
    2013 AICPA Conference on Doing Business in China
    2013 Taxes: Start Your Money Plan Here
    Understanding the Delaware Unclaimed Property Voluntary Disclosure Program
    Proactive Planning in 2013: What CPA Financial Planners Need to Know to Advise Individual Clients
    Top 10 Estate Planning Ideas
    Top 10 Income Tax Planning Ideas

    TAX POWER HOUR

    New! Discounted CPE Option available for the Tax Power Hour

    Scheduled Topics:
    4/25: Tax Season Debrief
    5/16: Social Media for CPAs
    6/20: Tax Software Comparison

    Contact us

    taxsection@aicpa.org

    Join us on:
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    Upcoming Events
     
    Understanding the Delaware Unclaimed Property Voluntary Disclosure Program
    May 1, 3pm - 4pm ET or May 8 (Rebroadcast)

    Registration Options:
     - Discounted CPE (1 hour)
     - Rebroadcast (1 hour)
     - Free (without CPE)

    AICPA Employee Benefits Plan Conference
    May 14 - 16, 2013
    Grapevine (Dallas), TX
    • 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

    • Tax Section members save an additional $100
    AICPA Conference on Tax Strategies for the High-Income Individual

    May 20 - 21, 2013
    Las Vegas, NV

    • Tax Section members save an additional $100
       
    Next Tax Power Hour
       
    Annual Tax Season Debrief
    April 25 from 1pm - 2pm ET
    Free, (Discounted CPE Available)

    Tax season is over. How did it go? Set aside time now to look back and debrief. This month we will review the unique challenges practitioners were facing this year and ask how things went.

    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
     
    AICPA Addresses “Challenging Tax Season” with Senate

    Jeffrey Porter, Chair of the AICPA Tax Executive Committee, testified at a Senate Finance Committee hearing yesterday on tax identity theft and tax fraud. Mr. Porter told the Committee that it was an extremely challenging and compressed tax season for practitioners due to the late enactment of tax legislation and the resulting delay in the release of 31 tax forms. Since the IRS could not accept tax returns that included certain forms until February or early March, many CPA’s essentially lost the first half of the tax return season. Mr. Porter also testified that the filing season was also a tremendous challenge to practitioners due to the late issuance of corrected Forms 1099-B and amended Forms 1099-DIV by an increasing number of brokerage firms, including multiple issuances of the same corrected forms on the same account. This issue also caused CPA’s the burden of filing clients’ returns multiple times to amend the original return filed. (Mr. Porter’s full testimony)

    IRS Announces Relief for Taxpayers Affected by Boston Marathon Explosions

    The IRS announced a three-month tax filing and payment extension to Boston area taxpayers and others affected by Monday’s explosions for taxpayers living in Suffolk County, Massachusetts, including the city of Boston. It also includes victims, their families, first responders, others impacted by this tragedy who live outside Suffolk County and taxpayers whose tax preparers were adversely affected. The IRS will give eligible taxpayers until July 15 to file their 2012 returns that are normally due April 15. Additional details are available in IRS IR-2013-43.

    President’s FY 2014 Proposed Budget to Increase Taxes on High Income Individuals
    President Barack Obama released his proposed FY 2014 budget–if enacted, it would raise approximately $580 billion in revenue through new taxes, limits on deductions, and other tax proposals.  The proposed budget also would curb federal spending to reduce the federal deficit by $1.8 trillion over 10 years.  As reported by the Journal of Accountancy, the proposed tax changes in the budget have significant changes, including:
    • The “Buffett Rule,” which would tax households with income over $1 million so that they pay at least 30% (after charitable donations) in taxes.
    • The “Fair Share Tax,” which would tax 30% of the taxpayer’s adjusted gross income, less a charitable donation credit equal to 28% of itemized charitable contributions allowed after the overall limitation on itemized deductions.  
    • Limits on tax deductions and other tax benefits on individuals and married couples by limiting the tax rate at which these taxpayers can reduce their tax liability to a maximum of 28%.  This limit would apply to all itemized deductions, foreign excluded income, tax-exempt interest, employer-sponsored health insurance, retirement contributions, and certain above-the-line deductions.
    Online Retailers Must Collect Sales Tax from New York Residents

    New York residents now have to pay sales tax on purchases through Amazon and similar online companies with in-state affiliates. On March 28, the New York Court of Appeals upheld the state’s “Amazon” law. Overstock.com and Amazon had filed an appeal and challenged the law on the grounds that it was unconstitutional. Expect a future Supreme Court appeal and ruling, as the New York Court of Appeals said that changing the tax nexus standard to account for the emergence of the Internet “would be something for the United States Supreme Court to consider.”

    In addition, Congress is considering the Marketplace Fairness Act of 2013 (S. 336, HR 684) that would authorize states to require online retailers of more than $1 million in remote sales to collect sales or use tax – only states that simplified their sales tax systems and have remote seller laws would be eligible for that authority.

    AICPA Submits Proposals and Reports for Civil Tax Penalties Reform

    The AICPA sent to Congress its legislative proposals for reforming the civil tax penalty provisions of the tax code so they are clearer and fairer and, consequently, do a better job of encouraging voluntary compliance with the nation’s tax laws.

    In an April 11 letter to the chairmen and ranking minority members of the Senate Finance and House Ways and Means Committees, Jeff Porter, chair of the AICPA Tax Executive Committee, voiced concerns that tax penalties on taxpayers are out of proportion to the respective violation: “Our highest priorities are to ensure that the penalties are sufficiently calibrated to the level of noncompliance, address the inconsistent application of reasonable cause in civil penalty administration, and minimize the presence of strict liability penalties in the Code.”

    The AICPA recommends that civil tax penalty reform be included in efforts to bring more clarity and fairness to the tax code.  The Report on Civil Penalties: the Need for Reform addresses several other issues that interfere with voluntary tax compliance and fair tax administration, including the erosion of basic procedural due processes. For more information, see the AICPA Penalties Reform webpage.

    AICPA Calls for Clearer Form 1099-C Information Reporting Rules
    As practitioners are aware, the rules for reporting a canceled debt can create issues for lenders and borrowers alike. Under current rules, the lenders are not always clear when to send Form 1099-C, Cancellation of Debt to the IRS, stating a debt has been cancelled. If they send it prematurely, this creates problems for the taxpayer who is required to report the cancellation as income. “We strongly believe changes are needed to the filing requirements for Form 1099-C,” Jeff Porter, chair of the Tax Executive Committee, stated in a letter to the IRS.

    The AICPA commented that IRS should require lenders to issue the form only upon legal discharge of a debt so the borrower will know when to report it on a tax return and also recommended that the IRS:

    • Remove of the 36-month testing period from the list of “identifiable events” in Treas. Reg. § 1.6050P-1(b)(2)(i).
    • The IRS should work with other government agencies to ensure that there is consistency between the rules for Form 1099-C and those for legal discharge of debt.
    • A borrower should not receive a Form 1099-C if the lender or a third party purchaser of the debt intends to continue collection efforts.
    IRS Provides Transitional Relief for Claiming Certain Fuel Tax Credits

    Under IRS Notice 2013-26, taxpayers now have until July 1 to claim biodiesel mixture, biodiesel, alternative fuel, and alternative fuel mixture credits.  The fuel credits were set to expire after Dec. 31, 2011, and the American Taxpayer Relief Act of 2012 extended the credits through Dec. 31, 2013.  The IRS extended the due date for filing claims, which had passed prior to the enactment of the legislation. 

    Other Tax News from the Journal of Accountancy
      • Significant decline in IRS staff leads to fewer audits (04/11/13)  
    • Incorrect expert advice about estate return filing deadline does not excuse penalty (04/08/13)
    • Survey shows how Americans plan to use tax refunds this year (04/08/13)
    • IRS announces pre-approval program for Sec. 403(b) plans (04/04/13)
    • Appeals court reverses $2.6 million penalty against tax shelter promoter (04/02/13)
    • IRS's identity theft liaison pilot program with law enforcement expands to 50 states (04/01/13)
    AICPA TOOLS & RESOURCES
     
    Best Planning Ideas for 2013 from the Planner Newsletter
    Tax planning is more complex than ever.  Download this free excerpt from the latest issue of the Personal Financial Planning Division’s bi-monthly newsletter, Planner. The article, “Best Planning Ideas for 2013,” features perspectives from experts, Lyle Benson, Bob Keebler, Michael Kitces, and Dan Rubin, on planning in this new environment. PFP/PFS members have free access to Planner ($185 annual value). Not a member? Join the PFP Section today and save $50 on your first year of membership when you enter promotional code CPALDPFP at checkout.
    Get Tax Laws and Regulations in One Place – the 2013 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 2013 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!
    Form I-9 (Employment Eligibility Verification) Updated by CIS

    U.S. Citizenship and Immigration Services recently updated the
    Form I-9. The Form I-9 is completed by employers to document verification and employment authorization of each new employee (including citizen and non-citizen) hired to work in the United States. The Employer Eligibility Verification form should be completed after a job offer is accepted and no later than the first day of employment. A special thanks to Trent Olmstead for sharing this update.

    Volunteer Opportunities with the Uniform CPA Examination

    The Regulation (REG) subcommittee, an AICPA committee that serves under the Board of Examiners (BOE), is currently accepting applications until May 15 for the 2013-2014 volunteer year, which begins October 2013.

    The AICPA is charged with protecting the public interest through the creation, administration and scoring of a high quality, reliable and valid CPA Examination, one of the three E’s required for licensure as a CPA along with education and experience. The REG subcommittee is responsible for approving all content that is presented in the Regulation section of the Exam, which includes ethics, professional and legal responsibilities, business law and federal taxation. The REG subcommittee is comprised of CPAs and represents a cross-section of the profession, with members from the Big 4, industry and academia.

    If you are interested in volunteering for the REG subcommittee, please fill out an application, including your résumé, on Volunteer Central.  If you have any questions regarding volunteering at the AICPA, please contact VolunteerServices@aicpa.org.

    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.

    Share Your Expertise and Help the Profession. Apply to Volunteer for an AICPA Tax Committee by May 15

    Would you like to become more involved in AICPA Tax Division activities? Apply online today. Lend your tax technical, policy, or practice management knowledge and experience by applying for committee membership. May 15 is the deadline for applying for the next service year, which begins in October. You must be a member of the AICPA Tax Section to apply to volunteer on a Tax Division Committee. Opportunities are not limited to practitioners in public accounting. We welcome members of academia, business and industry!

    Volunteer Central is our website designed to simplify the application process. It contains information to assist you in determining on which volunteer groups you would be interested in serving. A list of Tax Division committees and descriptions is available under “Tax.” You will need your AICPA membership number to log onto the site. If you do not have your membership credentials at hand, the site will instruct you on how to quickly obtain them. Entering your skills and including your resumé will facilitate the selection and appointment process. This will also enable us to contact you when new task forces are formed that complement your experience.

    For general questions on AICPA volunteer groups, contact VolunteerServices@aicpa.org. For Tax Division service opportunities, contact Ed Karl, at ekarl@aicpa.org.

    UPCOMING EVENTS
     
    AICPA Tax Planning, Compliance and Controversy Conference...For Businesses and Individuals

    May 15 - 17, 2013, Las Vegas, NV

    This AICPA conference will discuss the business and individual tax planning, compliance, and controversy phases and the issues that may arise before, during, and after your clients file their returns. Issues such as the implications of health care, identity theft, Social Security and more will also be discussed. Pre-eminent tax experts will offer guidance and provide the tools, techniques and strategies you need to effectively represent your clients.

    2013 AICPA Conference on Doing Business in China
    May 30 - 31, 2013, Washington, DC

    This AICPA conference will focus on providing strategic thinking, expert insights and practical solutions for doing business in China. This intensive one and one-half day seminar will feature renowned speakers and a full agenda of sessions to provide the latest on business trends evolving in China.
    2013 Taxes: Start Your Money Plan Here
    taxpowerhourApril 25, 1pm - 2pm ET

    In this webcast, Sarah Hughes, CPA, will show you how you can use your tax return to create a financial plan, how to ensure your retirement plan delivers, evaluate your investment strategy, protect your assets, and more! This web seminar is brought to you by AICPA PFP Division and 360 Degrees of Financial Literacy.

    Understanding the Delaware Unclaimed Property Voluntary Disclosure Program

    May 1, 3pm - 4pm ET (Rebroadcast May 8)

    Delaware has enacted a short-term voluntary disclosure agreement (VDA) program so that more businesses can be in compliance with the state’s unclaimed property rules by the program’s deadline of June 30, 2013. Our two speakers for the event are Delaware Secretary of State and the VDA Program Administrator, who will give practitioners a summary of how the program can help your clients’ benefit from the VDA. Tax Section members can opt to attend this webinar free without CPE.

    Proactive Planning in 2013: What CPA Financial Planners Need to Know to Advise Individual Clients

    May 2, 1pm - 2:45pm ET

    A panel of experts will discuss the American Taxpayer Relief Act and its new Medicare surtax, the estate planning and the $5 million gift, GST and estate exemption and portability.  Tax Section members can opt to attend this webinar free without CPE.

    Investment Tax Planning: What CPA Financial Planners Need to Know to Advise Individual Clients

    May 1, 1pm - 2:45pm ET

    The recent passage of The American Tax Payer Relief Act (“ATRA”), significantly impact the advice that CPA financial planners are giving their prospects and clients. Robert Keebler and Robert Gordon will discuss changes to taxation of “ordinary” income, “capital gains” and dividend income; phase-out of personal exemptions and itemized deductions, the 3.8% Medicare surtax on new investment income; and strategies for managing investment portfolios, income and taxes in this new environment.

    Proactive Planning in 2013: What CPA Financial Planners Need to Know to Advise Individual Clients

    May 2, 1pm - 2:45pm ET

    A panel of experts will discuss the American Taxpayer Relief Act and its new Medicare surtax, the estate planning and the $5 million gift, GST and estate exemption and portability.  Tax Section members can opt to attend this webinar free without CPE.

    Top 10 Estate Planning Ideas

    May 6, 1pm - 2:45pm ET

    Robert Keebler and Steven Oshins will lead practitioners through a technical discussion on the top 10 estate planning ideas, including Grantor Retained Annuity Trusts, lifetime gifts, Hybrid Domestic Protection Trusts, Dynasty Trusts and more. Tax Section members can opt to attend this webinar free without CPE.

    Top 10 Income Tax Planning Ideas

    May 10, 1pm - 2:45pm ET

    In this webcast, Robert Keebler will lead practitioners through a technical discussion on the top income tax planning ideas, including tax efficient investing, asset location, tactical tax planning, drawdown strategies, and more. Tax Section members can opt to attend this webinar free without CPE.
    Coming Up on the Tax Power Hour
    taxpowerhour New Discounted CPE Option available for each monthly Tax Power Hour

    We are pleased to announce a new discounted CPE option is now available for this monthly webcast. Each registration link will offer two choices to sign up for this
    event – free without CPE or CPE at a discounted price. If you have already registered for an upcoming event and would now like CPE, you will need to click on the registration link below and re-register using the new CPE option (available later today). Later this year, we plan to offer an option to register for the entire monthly series. Stay tuned!

    Scheduled Topics:

    April 25: Tax Season Debrief This month we take a look back at tax filing season. We will be joined by two practitioners who will review their busy season and answer the question: How did it go? We’ll 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?). Join us next Thursday at 1 pm ET!

    May 16: Social Media for CPAs 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!

    June 20: Tax Software Comparison Tax software is the heart of tax practice. Are you happy with yours? Are you considering changing? Every year the AICPA’s Journal of Accountancy publishes an article with the features and benefits of the major tax software programs. We want to take it a step further and talk to users of those programs to learn what they like about their software.

    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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