October 19, 2012 Tax E-alert: IRS Commissioner Shulman to Retire November 9, Nov. 2 Deadline for Protective Claims for Refund of New York Payroll Tax, Updates on Disaster Relief, ITIN Rules, more on Erroneous Form 3520 Letters and more... 


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      AICPA
    October 19, 2012
    Tax Section News
     
      Exclusive Tax Section member communications  
     
    In This Issue
        TOP NEWS  
    IRS Commissioner Shulman to Retire November 9
    Nov. 2 Deadline for Protective Claims for Refund of New York Payroll Tax
    IRS Provides Relief to Certifying Acceptance Agents Processing ITIN Applications
    Updated Federal Disaster Relief Information Related to Hurricane Isaac
    Severance Payments Not Subject to FICA Says Sixth Circuit
    Updated Form 706 Now Available for 2012 Decedents
    Update on Erroneous IRS Letters on Form 3520 Filing and Reporting
    Exempt Organizations Approaching Due Dates and Available Resources
    Tax News from the Journal of Accountancy
      TOOLS & RESOURCES
    New Tool: Chart of Tax Accounting Method Changes for Tangible Property
    Proactive Planning Toolkit in Preparation for 2013
    Two Free Chapters from Popular Financial and Estate Planning Guide
    Jumpstart Tax Planning Conversations Using the Total Tax InsightsTM Calculator
      UPCOMING EVENTS
    AICPA Sophisticated Tax Planning Conference
    AICPA National Tax Conference
      WEBINARS
    The Domestic Asset Protection Trust: Combining It with Double LLC
    Inside Buyout Basics and the Tax Cliff—A Timely Combination
    Washington Tax Brief
    Free: PFP Issues Update
    Post–Election: Now What? How CPA Financial Planners Can Advise Their Clients
    IRS "Fresh Start" Initiatives for Tax Liens, Installment Agreements and Offers in Compromise
    2012 Year-End Business Income Tax Update
    TAX POWER HOUR

    October focus is on Year-End Planning

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    Upcoming Events
     
     
    National Tax Conference
    Date: Nov, 7-8, 2012
    Location: Washington, DC
    Tax Section members save an additional $100
     
     
    Washington Tax Brief
    Oct. 31, 2012
    2pm – 3pm ET
    Registration Options:
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    • Free Without CPE
     
    Health Care Reform: Help Your Clients and Organizations Tackle the Issues
    Nov. 26, 2012
    2pm – 3:30pm ET
    Registration links coming soon!
     
    IRS "Fresh Start" Initiatives for Tax Liens, Installment Agreements and Offers in Compromise
    Nov. 28, 2012
    1pm – 2pm ET
    Registration Options:
    • Discounted CPE (1 hour)
    • Free Without CPE
     
    2012 Year-End Business Income Tax Update
    Dec. 4, 2012
    1pm – 3pm ET
    Registration Options:
    • Discounted CPE (2 hours)
    • Free Without CPE
     
    For a full list of upcoming Tax Section webinars, go to the CPE & Events page on the AICPA’s Tax website.
     
    Next Tax Power Hour
     
     

    Year-End Planning
    Oct. 25, 2012
    1 – 2pm ET
    Free, No CPE Available

    In this time of uncertainty, with so many question looming: What will Congress do about the 2011 expired provisions and 2012 expiring provisions? Will Congress do anything during the lame duck session? One thing we know for sure: we still need to do year-end planning with clients. Year-end planning is an annual process; some clients may even call it a ritual. What makes this year different is that we have more questions than answers about what will actually be in effect next year. So, our focus this month will be on strategies for planning in uncertain times. We will explore both sides of the issue – planning ideas that make sense given what we know now and strategies to get your clients to come in, sit down and plan.

     
     
     
     
      TOP NEWS
     
    IRS Commissioner Shulman to Retire November 9

    The IRS announced that Commissioner Douglas Shulman will step down on Nov. 9. Commissioner Shulman indicated earlier this year that he planned to retire by the end of 2012. Shulman has served as IRS Commissioner since March 24, 2008. Steven T. Miller, Deputy Commissioner for Services and Enforcement, will serve as (Acting) IRS Commissioner when Shulman leaves.

    Nov. 2 Deadline for Protective Claims for Refund of New York Payroll Tax

    Certain employers in New York (NY) have until Nov. 2, 2012 (and self-employed individuals until Apr. 30, 2013), to file a protective claim of refund for a NY payroll tax. On Aug. 22, 2012, NY Supreme Court ruled (in Mangano v. Silver, No. 14444/10 (N.Y. App. Div. 8/22/12)) that the New York’s Metropolitan Commuter Transportation Mobility Tax (MCTMT or MTA tax) was unconstitutional because the tax was in violation of the NY Constitution as it is a special law that does not serve a substantial state interest and was not passed as required with either the Home Rule message or by message of necessity with two-thirds vote in each house. Therefore, taxpayers who paid NY’s MTA tax when it was first imposed starting Mar. 1, 2009, should file protective refund claims – and may need to file by Nov. 2, 2012. Learn more!

    IRS Provides Relief to Certifying Acceptance Agents Processing ITIN Applications

    The IRS announced a modification to its June 22 interim guidance regarding the processing of Individual Taxpayer Identification Numbers (ITINs). The interim guidance is effective through the end of 2012 and requires foreign persons applying for an ITIN to submit original documentation (or certified copies obtained from the original issuing agency) with their Form W-7, Application for IRS ITIN.

    Under the IRS’ Oct. 2 announcement, Certifying Acceptance Agents can now submit copies (or originals) of identifying documentation on behalf of a foreign person. ITINs assigned to applicants under the Oct. 2 announcement will be valid for one year from the extended due date of the return (e.g., until Oct. 15, 2013).

    Updated Federal Disaster Relief Information Related to Hurricane Isaac

    The IRS continues to update the list of locations that may be eligible for disaster relief as a result of Hurricane Isaac. In Notice IR-2012-70, published Sept. 5, IRS allows taxpayers located in the federally declared disaster areas an extension of time to file 2011 tax returns and an extension to pay any taxes due until Jan. 11 where a filing extension had been requested.

    The tax relief postpones various tax filing and payment deadlines that occurred on or after Aug. 26. This includes returns for corporations and businesses that previously obtained an extension until Sept. 17, and individuals and businesses who received a similar extension until Oct. 15. It also includes the estimated tax payment for the third quarter of 2012, originally due Sept. 17.

    Check with your particular software vendor on procedures for e-filing returns for taxpayers in disaster areas as the IRS will be making significant changes to its software platforms after the Oct. 15 deadline. Most tax software vendors are aware of this and should be in the process of adapting to this new platform.

    For added information on how to deal with disaster relief issues, refer to the AICPA Disaster Casualty Loss Tax Practice Guide.

    Severance Payments Not Subject to FICA Says Sixth Circuit

    The Court of Appeals for the Sixth Circuit has ruled that severance payments are not subject to FICA taxes (see U.S. v. Quality Stores, Inc). In this case, the severance payments were deemed supplemental unemployment compensation benefits.

    Updated Form 706 Now Available for 2012 Decedents

    On Oct. 4, the IRS posted a revised Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return, for decedents dying in 2012. The updated Form 706 instructions were posted Oct. 12. The return is due 9 months from the date of death, so for decedents who die in 2012, the returns are due beginning Oct. 1. As we pointed out in the Aug, 24 e-alert, the form now includes:

    • Part 6 (page 4) on portability of deceased spousal unused exclusion (DSUE),
    • a box to check to NOT give the decedent's surviving spouse the DSUE amount, and
    • a new Schedule PC, Protective Claim for Refund, that may be used to preserve the estate's right to claim a refund based on the amount of a claim or expense that is unresolved at the time the estate tax return is filed.
    See the AICPA Portability Resource Page for more information and resources on portability, including a sample client letter to send to surviving spouses of clients who died in 2011 and 2012.

     

    Update on Erroneous IRS Letters on Form 3520 Filing and Reporting

    AICPA continues to hear from members with clients who received erroneous letters regarding Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts; in some letters, the IRS assesses millions of dollars of penalties and announces its intent to levy. We have been told that the IRS was not aware of the situation until our letter and is taking action. The IRS has indicated that it has stopped issuing new letters except for those closing out the issue and has now identified a specific contact for us in the IRS Large Business and International group who is looking into this issue and will hopefully resolve it soon. As always, we will continue to keep you informed.

    Exempt Organizations - Approaching Due Dates and Available Resources

    Nov. 15 is almost here! The AICPA has a handy list of reminders about approaching due dates and filing requirements for exempt organizations filing Forms 990, 990-EZ, or 990-PF, as well as Form 990-T. When preparing short year returns that begin in 2012 and end within 2012 (such as a short year beginning January 1, 2012 to June 30, 2012), remember to use 2011 forms. The IRS also has a number of resources available on their website for charities and nonprofits.

    Tax News from the Journal of Accountancy
      • TIGTA: IRS pays millions in unnecessary interest on NOL carrybacks (10/15/12)  
    • New Yorkers should act now to file protective refund claims for MTA tax (10/12/12)
    • Dozens indicted on stolen identity tax refund fraud charges (10/11/12)
    • Whistleblower’s claim is not entitled to Tax Court review (10/10/12)
    • Former comptroller general urges fiscally responsible reforms (10/5/12)
    • IRS issues interim ITIN procedures for 2011 tax returns on extension  (10/4/12)
    • CPA mobility law takes effect in Washington  (10/1/12)
    AICPA TOOLS & RESOURCES
     
    New Tool: Chart of Tax Accounting Method Changes for Tangible Property

    The voluminous temporary tangible property regulations unveiled last December have many practitioners and taxpayers reaching for the aspirin. These rules apply to virtually all business taxpayers (including Schedules C, E and F). Trying to decipher what you need to do to transition from your existing tax accounting methods and get into compliance? AICPA has created a chart that summarizes key aspects of each of the tax accounting method changes contained in Revenue Procedures 2012-19 and 2012-20. Learn more on the AICPA’s Tangible Property resources webpage.

    Proactive Planning Toolkit in Preparation for 2013

    The PFP division has opened up their Toolkit: Proactive Planning in Preparation for 2013 and Forefield Advisor to all practitioners between Oct. 18 and Dec. 31 to help practitioners ensure they educate their clients and don’t miss any key planning opportunities.

    Included in the toolkit are custom made postcards for practitioners to send to clients about 2012 planning. Customization of the postcard, mailing, everything soup to nuts will be done. The cost is basically raw mailing and a 20% discount on printing, nothing for the design, set up, etc.

    We highly encourage Tax Section members to take advantage of this opportunity.

    Two Free Chapters from Popular Financial and Estate Planning Guide

    For a limited time, Tax Section members can download Chapter 1: The Art of Financial Planning and Chapter 33: Year-End and New Year Tax Planning from The CPA’s Guide to Financial and Estate Planning. This comprehensive 4-volume downloadable publication was recently updated for 2012 and provides guidance to CPAs advising individuals in estate, tax, retirement, investment and risk management matters. The complete guide is available exclusively to PFP/PFS members. Not a member? Check out the free excerpts and learn more about PFP Section membership and the PFS credential.

    Jumpstart Tax Planning Conversations Using the Total Tax InsightsTM Calculator

    Once clients are more aware of the taxes they pay, they start thinking differently about a lot of things, such as whether to pay off a mortgage, should they change jobs or start a new business, and how to plan and save for retirement. Start financial planning discussions with your clients using the one-pager “Taxes and The Big Picture” which leverages the Total Tax InsightsTM calculator. You’ll also find more background information and a PowerPoint presentation in the Tax Practitioner’s Toolkit for your use.

    UPCOMING EVENTS
     
    AICPA Sophisticated Tax Planning for Your Wealthy Clients

    October 22 – 23, 2012, New York, NY

    Learn the latest techniques to help your wealthy clients retain, accumulate and transfer wealth. Experts, hand-picked by Sid Kess, will share cutting-edge strategies and changing government regulations that affect your wealthy clients.

    Tax and PFP Section members and PFP Credential Holders save an additional $50. Register today!

    AICPA National Tax Conference

    November 7 – 8, 2012, Washington, DC

    The AICPA National Tax Conference occurs one day after the Presidential election and will address the election results and what they mean to you and your tax clients. Prominent national tax professionals and government leaders offer sessions that will provide information on expiring and likely legislation, the deficit, international competitiveness of U.S. firms, and the increasingly large tax gap. You will have direct access to key IRS policy makers and leadership, including Commissioner Douglas Shulman. The agenda includes an Emerging CPA track, Corporate/Business track, as well as key speakers Daniel Mitchell from the Cato Institute, Diane Lim Rogers from The Concord Coalition and Don Longano from PWC.

    Tax Section members save an additional $100. Register today!

    taxpowerhour

    The Domestic Asset Protection Trust: Combining It with Double LLC
    Oct. 23 from 1pm – 2:15 pm ET

    Asset protection has become one of the hottest areas of practice for estate planners. The Domestic Asset Protection Trust has become one of the leading asset protection vehicles. In this webinar, Steve Oshins, Esq., AEP (Distinguished) will describe this technique and the use of charging orders for additional creditor protection and how they can be combined create a nearly insurmountable wall using a special design where the Domestic Asset Protection Trust is combined with two LLCs. This webinar is free for PFP Section members. Discounted CPE is available for PFP and Tax Section members.

    Inside Buyout Basics and the Tax Cliff—A Timely Combination (a Journal of Accountancy webcast)
    Oct. 30 from 3pm – 4pm ET

    Buyouts by owners or employees are often an attractive option for businesses looking to sell. Various buyout types can help sellers avoid a possible sharp increase in capital gains taxes by executing the sale before Jan. 1. CPAs can take an active role by helping business owners determine their best option. In this webinar, Scott D. Miller, CPA/ABV, CVA - President, Enterprise Services Inc., will discuss buyout structures and their tax implications for your clients. Discounted CPE is available for Tax Section members.

    Washington Tax Brief
    Oct. 31 from 2pm – 3 pm ET

    Expired 2011 provisions, expiring tax cuts, election uncertainty and more are converging to create one of the most challenging tax seasons ever. Tax return preparation and processing may even be delayed due to last-minute tax law changes. Join us for our next session where you will hear from our team in Washington, DC, who will update you on what we know so far, what we expect is coming, and when we think Congress and IRS will address the pending changes and provide some certainty for the 2013 filing season. Discounted CPE is available for Tax Section members, or Tax Section members may opt to attend free, without CPE.

    Free: PFP Issues Update

    Nov. 1 from 3pm – 4 pm ET

    Join the staff of the AICPA PFP Division along with Lyle Benson, incoming PFP Executive Committee chair, and Dan Thomas, PFS Credential Committee chair, for the final PFP quarterly issues update of 2012. Don’t miss insights from leaders in the profession, year-end planning opportunities and resources, preview of the January Advanced PFP Conference and preconference sessions, news from the PFP Division, including the latest member benefits and legislative and regulatory developments affecting CPA financial planners. Attendees will be able to submit questions during the live call via an interactive Q&A panel.

    Post–Election: Now What? How CPA Financial Planners Can Advise Their Clients
    Nov. 14 from 1:30pm – 2:45 pm ET

    This year presents an unprecedented opportunity for you to differentiate your firm and show that you provide significant value to your clients by having all of their financial planning needs in mind, including retirement, estate, tax, investment and insurance planning. With just under 2 months left this year to trigger planning strategies prior to year end, join us to hear how leading practitioners Lyle Benson, Bob Keebler, Ted Sarenski, and Scott Sprinkle are advising their clients. Discounted CPE is available for PFP and Tax Section members, or PFP and Tax Section members may opt to attend free, without CPE.

    IRS "Fresh Start" Initiatives for Tax Liens, Installment Agreements and Offers in Compromise
    Nov. 28 from 1pm – 2 pm ET

    Learn about the new rules developed as part of the IRS’s new “Fresh Start” initiative. The IRS has liberalized the requirements to qualify for offers in compromise (OIC) and installment agreements. We will explain the new rules designed to help individuals and small businesses meet their federal tax obligations and avoid tax liens, provide insights into the IRS collection process and explain other improvements the Service has made in the OIC and installment agreement programs over the last two years. Our speaker is Mary Lou Gervie, CPA, from Bethesda, Maryland. A rebroadcast of this webinar is scheduled for Dec. 11 from 1pm – 2pm ET. Discounted CPE is available for Tax Section members, or Tax Section members may opt to attend free, without CPE.

    2012 Year-End Business Income Tax Update
    Dec. 4 from 1pm – 3pm ET

    Gregory A. Porcaro, CPA/ABV, MST, CFF, will discuss the latest developments in legislation, tax cases, IRS regulations and other guidance impacting C corporations, S corporations, partnerships, and limited liability companies. The webinar should prove helpful for year-end tax planning and for preparing business tax returns during the upcoming tax filing season. A rebroadcast of this webinar is scheduled for Dec. 18 from 1 to 3 pm ET. Discounted CPE is available for Tax Section members, or Tax Section members may opt to attend free, without CPE.

    October’s Tax Power Hour Focuses on Year-End Planning
    taxpowerhour

    In this time of uncertainty, with so many question looming: What will Congress do about the 2011 expired provisions and 2012 expiring provisions? How sweeping will tax reform actually be? Will they do anything during the lame duck session? One thing we know for sure: we still need to do year-end planning with clients. Year-end planning is an annual process; some clients may even call it a ritual. What makes this year different is that we have more questions than answers about what will actually be in effect next year. So, our focus this month will be strategies for planning in uncertain times. We will explore both sides of the issue – planning ideas that make sense given what we know now and strategies to get your clients to come in, sit down and plan.

    The Tax Power Hour is our monthly webcast series for Tax Section members only. This free, hour-long talk 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.

    taxpowerhour

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