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NewsNotes Lesli S. Laffie, J.D., LL.M. Exempt Organization Websites • Improved IRS Website • Innocent Spouse/Domestic Violence • Schedule N • Use of Installment Method
The AICPA Tax Division's Taxation of Internet Services Task Force has sent comments to the IRS on Ann. 2000-84, regarding the need for guidance clarifying the application of the Code to exempt organizations' use of the Internet. These comments, which were approved by the Exempt Organization Taxation Technical Resource Panel and the Tax Executive Committee, should soon be available on the AICPA Website at http://www.aicpa.org/letters/index.htm. The gist of Ann. 2000-84 is that exempt organizations are increasingly using the Web to perform activities that could be accomplished through traditional media (e.g., radio, television, print or direct mail). The thrust of the AICPA comments is that the Web is merely a new communication medium and a new vehicle by which to conduct such activities; the existing rules pertaining to exempt-organization activities should apply equally to activities using the new medium.
IR-2001-26 announces the IRS's new small-business community Website, another sign of the agency's efforts to modernize and better serve taxpayers. With a vastly improved online service, the site will specifically assist the nation's 45 million small-business and self-employed taxpayers with user-friendly guidance on an array of basic tax questions and issues. The site represents the first stage in revamping the entire site to deliver on the agency's commitment to better serve taxpayers. According to the IRS, the new Website is directly linked to the agency's new focus. Nearly three years ago, Congress passed the Internal Revenue Service Restructuring and Reform Act of 1998, directing the agency to do a better job of meeting taxpayers' needs. Since then, the IRS has launched an ambitious modernization plan to improve the agency's operations and ensure that taxes are collected efficiently and fairly. The Service has already reformed its structure to better meet taxpayer needs; many other improvements—including modernizing technology—are yet to come. Currently, visitors to the site will still see "The Digital Daily," which has served as the IRS Web portal since 1996, but will follow different instructions to reach the business-specific content. Ultimately, the IRS will revamp the entire site with new sections and improved functionality for individual filers, large corporations and tax-exempt organizations. Among the improvements for small businesses and self-employed taxpayers, the new site will provide:
Access to the new Website is through the IRS's homepage, at www.irs.gov. A button "link" that says "Small Business and Self-Employed Community" will connect users directly to the site. For an alternative way to reach the site, click "Preview Our New Look" at the bottom of the www.irs.gov homepage, then click on either "Small Business" or "Self-Employed."
Innocent Spouse/Domestic Violence According to IR-2001-23, the IRS has taken steps to protect victims of domestic violence who apply for innocent spouse relief. The safeguards respond to concerns brought to the IRS by a number of outside groups interested in domestic-violence issues. A taxpayer who has been a victim of domestic violence and fears that filing a claim for innocent spouse relief will result in retaliation should write "Potential Domestic Abuse Case" at the top of Form 8857, Request for Innocent Spouse Relief. This term will alert the IRS to the taxpayer's situation. Taxpayers should also explain their concerns in a statement attached to the claim, in addition to explaining why they should qualify for innocent spouse relief. The law requires the IRS to tell a taxpayer's spouse (or former spouse) that innocent spouse relief has been requested. The spouse (or former spouse) has the right to provide the IRS with information and receive limited information from the IRS about that request. However, the IRS strictly adheres to tax law provisions that protect the confidentiality of sensitive information. This means the IRS will not release information that could endanger the safety of domestic-violence victims. For example, the IRS will not release to a taxpayer's spouse (or former spouse) a new name, address, employer information, phone or fax number or other information not related to deciding the innocent spouse claim. For potential abuse cases, the IRS also centralizes all correspondence in one location. This change means the other spouse cannot guess the location of the domestic-abuse victim through a postmark or the location of a local IRS office. IRS workers with innocent spouse cases also will receive special training on how to properly handle abuse cases. The designation as a "Potential Domestic Abuse Case" does not lead to special consideration when the IRS makes an innocent spouse decision. However, evidence of abuse is one factor that the IRS may consider under innocent spouse relief. Form 8857 is available at www.irs.gov in the "Forms and Pubs" section. Taxpayers who wish to investigate eligibility for innocent spouse relief can visit the Innocent Spouse Tax Relief Eligibility Explorer on the IRS Website, at www.irs.gov/prod/ind_info/s_tree/index.html.
Ann. 2001-13 discusses the availability of new Schedule N (Form 1120), Foreign Operations of U.S. Corporations for the 2000 Tax Year. Corporations that (1) had assets or (2) operated a business in a foreign country or a U.S. possession at any time during 2000 may have to file Schedule N with their corporate returns. Schedule N (Form 1120) can be obtained by calling the IRS's toll-free telephone number, 1-800-TAX-FORM (1-800-829-3676) or via the Web at http://www.irs.gov .
Notice 2001-22 addresses the application of the Installment Tax Correction Act of 2000 (ITCA) to accrual-method taxpayers that disposed of property in an installment sale after Dec. 16, 1999. The ITCA repealed Sec. 453(a)(2), which provided that a taxpayer could not use the installment method if income generated from an installment sale would have been reported under the accrual method were it not for Sec. 453(a). Taxpayers were deemed to have elected out of the installment method if, for the tax year of the installment sale, they filed a return reporting an amount realized equal to the selling price. Taxpayers can now revoke an effective election out of the installment method, provided that they file amended returns for the year in which the installment sale occurred and for any subsequent year in which they should have reported installment income. |
