Treasury, IRS Issue Proposed Regulations for Cash Balance and Other Hybrid Pension Plans
IR-2007-211, Dec. 28, 2007
WASHINGTON — The Treasury Department and Internal Revenue Service (IRS) issued proposed regulations relating to cash balance plans and other hybrid pension plans.
The proposed regulations would interpret rules that were added to the tax law by the Pension Protection Act of 2006 (PPA), including an age discrimination safe harbor for hybrid pension plans, conversion protection for employees, and a 3-year minimum vesting requirement. The proposed regulations would also apply for purposes of the parallel rules that were added by PPA to the Employee Retirement Income Security Act of 1974 (ERISA).
The regulations are generally proposed to be effective for plan years beginning on and after Jan. 1, 2009. For periods before the effective date of these regulations, a plan must comply with the new PPA statutory provisions. During these periods, a plan is permitted to rely on the regulations for purposes of satisfying the new PPA statutory provisions.
Monday, December 31, 2007
Five 2008 GM Vehicles Certified As Qualified Hybrids
Five 2008 GM Vehicles Certified As Qualified Hybrids
IR-2007-210, Dec. 28, 2007
WASHINGTON — The Internal Revenue Service has acknowledged the certification by General Motors Corp. that five of its Model Year 2008 vehicles meet the requirements of the Alternative Motor Vehicle Credit as qualified hybrid motor vehicles.
The credit amount for the certified 2008 model year hybrid vehicles are:
• Chevrolet Tahoe Hybrid (2WD and 4WD) $2,200.00
• GMC Yukon Hybrid (2WD and 4WD) $2,200.00
• Saturn Vue Green Line $1,550.00
Original purchasers of these vehicles may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
More information on hybrid vehicles and other alternative motor vehicles can be found on the IRS Web site at IRS.gov
IR-2007-210, Dec. 28, 2007
WASHINGTON — The Internal Revenue Service has acknowledged the certification by General Motors Corp. that five of its Model Year 2008 vehicles meet the requirements of the Alternative Motor Vehicle Credit as qualified hybrid motor vehicles.
The credit amount for the certified 2008 model year hybrid vehicles are:
• Chevrolet Tahoe Hybrid (2WD and 4WD) $2,200.00
• GMC Yukon Hybrid (2WD and 4WD) $2,200.00
• Saturn Vue Green Line $1,550.00
Original purchasers of these vehicles may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
More information on hybrid vehicles and other alternative motor vehicles can be found on the IRS Web site at IRS.gov
Treasury, IRS Implement Enhanced Standards of Conduct for Tax Return Preparers; Plan Overhaul of Tax Return Preparer Regulatory Regime
Treasury, IRS Implement Enhanced Standards of Conduct for Tax Return Preparers; Plan Overhaul of Tax Return Preparer Regulatory Regime
IR-2007-213, Dec. 31, 2007
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2008-13 that implements a May 2007 law that expanded the tax return preparer penalty and heightened the standards of conduct that must be met by tax return preparers in order to avoid that penalty.
Notice 2008-13 also solicits input from the tax return preparer community on a planned overhaul of the tax return preparer penalty regime anticipated to be completed by the end of 2008.
“The plan to take a fresh look at the preparer penalty regulations will be a top priority for us in 2008,” said IRS Chief Counsel Don Korb. “We look forward to receiving comments from all interested parties on their recommendations for the final regulations. Our goal is to complete our work on the overhaul of these rules by the end of 2008,” he said.
For undisclosed positions on a tax return, the new law replaced the realistic possibility standard with a requirement that there be a reasonable belief that the tax treatment of the position would more likely than not be sustained on its merits. In cases in which the taxpayer discloses the position on the tax return, the notice implements the new law that states there must be a reasonable basis for the tax treatment of the position taken on the tax return.
The notice provides interim rules to implement and interpret these heightened standards. The interim rules will be in effect until the overhaul of the current return preparer penalty regulations is complete. The interim rules emphasize the importance to preparers of understanding the legal basis for positions taken on tax returns, the requirement for taxpayers to disclose certain positions, and the need for preparers to advise taxpayers on the various penalties that can apply when a position is taken on a return that may not be supported by existing law.
Under the notice, preparers generally can continue to rely on taxpayer representations in preparing returns and can also generally rely on representations of third parties, unless the preparer has reason to know they are wrong.
The new law also expanded the return preparer penalty to cover all tax return preparers, not just income tax return preparers. Under the notice, preparers of many information returns, however, will not be subject to the new penalty provision unless they willfully understate tax or act in reckless or intentional disregard of the law. The notice also includes examples illustrating how the new standards would apply.
In addition to Notice 2008-13, additional guidance has been provided in Notice 2008-12 with respect to the implementation of the tax return preparer signature requirement, and in Notice 2008-11, which clarifies the transition relief provided in Notice 2007-54, issued earlier this year.
IR-2007-213, Dec. 31, 2007
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2008-13 that implements a May 2007 law that expanded the tax return preparer penalty and heightened the standards of conduct that must be met by tax return preparers in order to avoid that penalty.
Notice 2008-13 also solicits input from the tax return preparer community on a planned overhaul of the tax return preparer penalty regime anticipated to be completed by the end of 2008.
“The plan to take a fresh look at the preparer penalty regulations will be a top priority for us in 2008,” said IRS Chief Counsel Don Korb. “We look forward to receiving comments from all interested parties on their recommendations for the final regulations. Our goal is to complete our work on the overhaul of these rules by the end of 2008,” he said.
For undisclosed positions on a tax return, the new law replaced the realistic possibility standard with a requirement that there be a reasonable belief that the tax treatment of the position would more likely than not be sustained on its merits. In cases in which the taxpayer discloses the position on the tax return, the notice implements the new law that states there must be a reasonable basis for the tax treatment of the position taken on the tax return.
The notice provides interim rules to implement and interpret these heightened standards. The interim rules will be in effect until the overhaul of the current return preparer penalty regulations is complete. The interim rules emphasize the importance to preparers of understanding the legal basis for positions taken on tax returns, the requirement for taxpayers to disclose certain positions, and the need for preparers to advise taxpayers on the various penalties that can apply when a position is taken on a return that may not be supported by existing law.
Under the notice, preparers generally can continue to rely on taxpayer representations in preparing returns and can also generally rely on representations of third parties, unless the preparer has reason to know they are wrong.
The new law also expanded the return preparer penalty to cover all tax return preparers, not just income tax return preparers. Under the notice, preparers of many information returns, however, will not be subject to the new penalty provision unless they willfully understate tax or act in reckless or intentional disregard of the law. The notice also includes examples illustrating how the new standards would apply.
In addition to Notice 2008-13, additional guidance has been provided in Notice 2008-12 with respect to the implementation of the tax return preparer signature requirement, and in Notice 2008-11, which clarifies the transition relief provided in Notice 2007-54, issued earlier this year.
IRS, Treasury Issue Additional Proposed Regulations on Pension Protection Act Funding Rules
IRS, Treasury Issue Additional Proposed Regulations on Pension Protection Act Funding Rules
IR-2007-212, Dec. 28, 2007
WASHINGTON — The Treasury Department and the Internal Revenue Service today have issued proposed regulations that provide employers sponsoring single-employer defined benefit plans with guidance regarding the measurement of pension assets and liabilities under the new funding rules enacted as part of the Pension Protection Act of 2006.
These proposed regulations, together with proposed regulations related to mortality issued in May, proposed regulations relating to funding balances and funding-based benefit limitations issued in August, the yield curve guidance issued in October, and guidance on lump sum determinations issued in November will assist plan sponsors in determining the contribution requirements that apply to their defined benefit plans for the first year that the new funding rules apply.
Although the new funding rules are generally effective for plan years beginning on or after Jan. 1, 2008, these regulations are proposed to be effective for plan years beginning on or after Jan. 1, 2009. However, plan sponsors can rely on these proposed regulations for purposes of satisfying the requirements of section 430 for plan years beginning in 2008.
The Treasury Department and the Internal Revenue Service intend to issue guidance in the near future indicating that the proposed effective date for these regulations should also apply for the proposed regulations relating to employer-specific mortality tables issued in May and the proposed regulations related to funding balances and funding based-benefit limitations under sections 430(f) and 436 issued in August. Although final regulations will not apply to plan years beginning before January 1, 2009, plan sponsors may also rely on those proposed regulations for purposes of satisfying the statutory requirements for plan years beginning in 2008.
On Dec. 19, 2007, the Senate passed an amended version of the Pension Protection Technical Corrections Act of 2007. These proposed regulations, like the earlier proposed regulations, do not reflect any proposed technical corrections. Nor do they include any reflection of the proposed modification to the rules for determining asset values. After technical corrections are enacted, the regulations will be modified to take into account the enacted provisions.
IR-2007-212, Dec. 28, 2007
WASHINGTON — The Treasury Department and the Internal Revenue Service today have issued proposed regulations that provide employers sponsoring single-employer defined benefit plans with guidance regarding the measurement of pension assets and liabilities under the new funding rules enacted as part of the Pension Protection Act of 2006.
These proposed regulations, together with proposed regulations related to mortality issued in May, proposed regulations relating to funding balances and funding-based benefit limitations issued in August, the yield curve guidance issued in October, and guidance on lump sum determinations issued in November will assist plan sponsors in determining the contribution requirements that apply to their defined benefit plans for the first year that the new funding rules apply.
Although the new funding rules are generally effective for plan years beginning on or after Jan. 1, 2008, these regulations are proposed to be effective for plan years beginning on or after Jan. 1, 2009. However, plan sponsors can rely on these proposed regulations for purposes of satisfying the requirements of section 430 for plan years beginning in 2008.
The Treasury Department and the Internal Revenue Service intend to issue guidance in the near future indicating that the proposed effective date for these regulations should also apply for the proposed regulations relating to employer-specific mortality tables issued in May and the proposed regulations related to funding balances and funding based-benefit limitations under sections 430(f) and 436 issued in August. Although final regulations will not apply to plan years beginning before January 1, 2009, plan sponsors may also rely on those proposed regulations for purposes of satisfying the statutory requirements for plan years beginning in 2008.
On Dec. 19, 2007, the Senate passed an amended version of the Pension Protection Technical Corrections Act of 2007. These proposed regulations, like the earlier proposed regulations, do not reflect any proposed technical corrections. Nor do they include any reflection of the proposed modification to the rules for determining asset values. After technical corrections are enacted, the regulations will be modified to take into account the enacted provisions.
Thursday, December 27, 2007
Filing Season Opens on Time Except for Certain Taxpayers Potentially Affected by AMT Patch
Filing Season Opens on Time Except for Certain Taxpayers Potentially Affected by AMT Patch
IR-2007-209, Dec. 27, 2007
WASHINGTON — The Internal Revenue Service announced today that the upcoming tax season is expected to start on time for everyone except certain taxpayers potentially affected by late enactment of the Alternative Minimum Tax “patch.”
Following extensive work in recent weeks, the IRS expects to be able to begin processing returns for the vast majority of taxpayers in mid-January. However, as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law.
The IRS has targeted Feb. 11, as the potential starting date for taxpayers to begin submitting the five AMT-related returns affected by the legislation. The February date allows the IRS enough time to update and test its systems to accommodate the AMT changes without major disruptions to other operations related to the tax season. As the IRS has said previously, it will take approximately seven weeks after the AMT patch was approved to update IRS processing systems completely.
Although as many as 13.5 million taxpayers will not be able to file their returns until Feb. 11, the effect of the delay may be lessened by the fact that under previous filing patterns only between 3 million to 4 million taxpayers file returns with the five affected forms during these early weeks in the filing season.
“We regret the inconvenience the delay will mean for millions of early tax filers, especially those expecting a refund,” said Linda Stiff, Acting IRS Commissioner. “We’ve taken extraordinary steps to figure out a way that we can start the filing season on time for most taxpayers, including some using AMT-related forms. Our goal has always been to make sure we can accurately process tax returns while getting refunds to taxpayers as quickly as possible.”
The February delay caused by the AMT patch will affect taxpayers using these five forms:
• Form 8863, Education Credits.
• Form 5695, Residential Energy Credits.
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
• Form 8396, Mortgage Interest Credit.
• Form 8859, District of Columbia First-Time Homebuyer Credit.
While these five forms require significant additional reprogramming due to the AMT patch, the IRS has been able to reprogram its systems to begin processing seven other AMT-related forms, including Form 6251, Alternative Minimum Tax – Individuals. Taxpayers filing these seven forms should not experience delays in filing, and the IRS expects to begin processing those returns starting on Jan. 14.
Electronic returns involving those five forms will not be accepted until systems are updated in February; similarly, paper filers should wait to file as well. All other e-file and paper returns will be accepted starting in January. The IRS urges affected taxpayers to file electronically in order to reduce wait times for their refunds. E-file with direct deposit gets refunds in as little as 10 days, while paper returns take four to six weeks.
“E-file is a great option for everyone, especially if they are affected by the AMT,” said Richard Spires, IRS Deputy Commissioner for Operations Support. “Filing electronically will get people their refunds faster, and e-file greatly reduces the chances for making an error on the AMT or other tax issues.”
In addition to filing electronically, the IRS urges taxpayers to take simple steps to avoid problems:
• Taxpayers filing electronically should make sure to update their tax software in order to get the latest AMT updates.
• Taxpayers with $54,000 or less in Adjusted Gross Income can use Free File to electronically file their returns for free. Free File will only be available by visiting the official IRS web site at IRS.gov. In all, 90 million taxpayers qualify for this free service.
• Taxpayers who use tax software to print out paper copies of tax forms should make sure they update their software before printing out forms. Taxpayers using paper forms can also visit IRS.gov to get updated copies of AMT forms.
The IRS has created a special section on IRS.gov to provide taxpayers with additional information and copies of updated forms affected by the AMT. In recent days, the IRS has posted updated copies of all forms affected by the late enactment of the AMT patch by Congress.
The IRS also reminds taxpayers that printed tax packages, which will begin arriving in the mail around New Year’s, went to the printer in November before the AMT changes were enacted. The packages reflect the law in effect at the time of printing. The tax packages include cautionary language to taxpayers that late legislation was pending.
The IRS is also working closely with tax professionals and the tax preparation software community to make sure they can help taxpayers with all of the latest developments on the enactment of the AMT patch and other tax changes.
“The IRS is going to continue to do everything it can to make this a fully successful filing season for the nation’s taxpayers,” Stiff said. “We will continue to work to keep taxpayers up to date and make this situation as easy as possible for everyone.”
Link: Alternative Minimum Tax - How It Affects Filing Season 2008: http://www.irs.gov/newsroom/article/0,,id=176605,00.html
IR-2007-209, Dec. 27, 2007
WASHINGTON — The Internal Revenue Service announced today that the upcoming tax season is expected to start on time for everyone except certain taxpayers potentially affected by late enactment of the Alternative Minimum Tax “patch.”
Following extensive work in recent weeks, the IRS expects to be able to begin processing returns for the vast majority of taxpayers in mid-January. However, as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law.
The IRS has targeted Feb. 11, as the potential starting date for taxpayers to begin submitting the five AMT-related returns affected by the legislation. The February date allows the IRS enough time to update and test its systems to accommodate the AMT changes without major disruptions to other operations related to the tax season. As the IRS has said previously, it will take approximately seven weeks after the AMT patch was approved to update IRS processing systems completely.
Although as many as 13.5 million taxpayers will not be able to file their returns until Feb. 11, the effect of the delay may be lessened by the fact that under previous filing patterns only between 3 million to 4 million taxpayers file returns with the five affected forms during these early weeks in the filing season.
“We regret the inconvenience the delay will mean for millions of early tax filers, especially those expecting a refund,” said Linda Stiff, Acting IRS Commissioner. “We’ve taken extraordinary steps to figure out a way that we can start the filing season on time for most taxpayers, including some using AMT-related forms. Our goal has always been to make sure we can accurately process tax returns while getting refunds to taxpayers as quickly as possible.”
The February delay caused by the AMT patch will affect taxpayers using these five forms:
• Form 8863, Education Credits.
• Form 5695, Residential Energy Credits.
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
• Form 8396, Mortgage Interest Credit.
• Form 8859, District of Columbia First-Time Homebuyer Credit.
While these five forms require significant additional reprogramming due to the AMT patch, the IRS has been able to reprogram its systems to begin processing seven other AMT-related forms, including Form 6251, Alternative Minimum Tax – Individuals. Taxpayers filing these seven forms should not experience delays in filing, and the IRS expects to begin processing those returns starting on Jan. 14.
Electronic returns involving those five forms will not be accepted until systems are updated in February; similarly, paper filers should wait to file as well. All other e-file and paper returns will be accepted starting in January. The IRS urges affected taxpayers to file electronically in order to reduce wait times for their refunds. E-file with direct deposit gets refunds in as little as 10 days, while paper returns take four to six weeks.
“E-file is a great option for everyone, especially if they are affected by the AMT,” said Richard Spires, IRS Deputy Commissioner for Operations Support. “Filing electronically will get people their refunds faster, and e-file greatly reduces the chances for making an error on the AMT or other tax issues.”
In addition to filing electronically, the IRS urges taxpayers to take simple steps to avoid problems:
• Taxpayers filing electronically should make sure to update their tax software in order to get the latest AMT updates.
• Taxpayers with $54,000 or less in Adjusted Gross Income can use Free File to electronically file their returns for free. Free File will only be available by visiting the official IRS web site at IRS.gov. In all, 90 million taxpayers qualify for this free service.
• Taxpayers who use tax software to print out paper copies of tax forms should make sure they update their software before printing out forms. Taxpayers using paper forms can also visit IRS.gov to get updated copies of AMT forms.
The IRS has created a special section on IRS.gov to provide taxpayers with additional information and copies of updated forms affected by the AMT. In recent days, the IRS has posted updated copies of all forms affected by the late enactment of the AMT patch by Congress.
The IRS also reminds taxpayers that printed tax packages, which will begin arriving in the mail around New Year’s, went to the printer in November before the AMT changes were enacted. The packages reflect the law in effect at the time of printing. The tax packages include cautionary language to taxpayers that late legislation was pending.
The IRS is also working closely with tax professionals and the tax preparation software community to make sure they can help taxpayers with all of the latest developments on the enactment of the AMT patch and other tax changes.
“The IRS is going to continue to do everything it can to make this a fully successful filing season for the nation’s taxpayers,” Stiff said. “We will continue to work to keep taxpayers up to date and make this situation as easy as possible for everyone.”
Link: Alternative Minimum Tax - How It Affects Filing Season 2008: http://www.irs.gov/newsroom/article/0,,id=176605,00.html
2008 Excise Taxes on Air Transportation
2008 Excise Taxes on Air Transportation
IR-2007-208, Dec. 27, 2007
WASHINGTON — Today the Internal Revenue Service announced the 2008 inflation adjustments to the excise taxes on air transportation.
Excise taxes apply to the domestic segments of taxable air transportation and to the use of international air facilities. The Consolidated Appropriations Act, 2008, signed into law on Dec. 26, 2007, extends these excise taxes to air transportation that begins or is paid for no later than Feb. 29, 2008.
These excise taxes are adjusted annually for inflation. For 2008, the excise tax on the domestic segment of taxable air transportation is $3.50. The excise tax for 2008 for international flights that begin or end in the United States is $15.40. The tax on use of international air facilities also applies at a reduced rate to departures of interstate flights that begin or end in Alaska or Hawaii. For 2008, the international air facilities tax on these flights is $7.70.
Revenue Procedure 2007-66, which contains other amounts that are adjusted annually for inflation, will be modified in the near future to include the 2008 inflation adjusted items listed above.
IR-2007-208, Dec. 27, 2007
WASHINGTON — Today the Internal Revenue Service announced the 2008 inflation adjustments to the excise taxes on air transportation.
Excise taxes apply to the domestic segments of taxable air transportation and to the use of international air facilities. The Consolidated Appropriations Act, 2008, signed into law on Dec. 26, 2007, extends these excise taxes to air transportation that begins or is paid for no later than Feb. 29, 2008.
These excise taxes are adjusted annually for inflation. For 2008, the excise tax on the domestic segment of taxable air transportation is $3.50. The excise tax for 2008 for international flights that begin or end in the United States is $15.40. The tax on use of international air facilities also applies at a reduced rate to departures of interstate flights that begin or end in Alaska or Hawaii. For 2008, the international air facilities tax on these flights is $7.70.
Revenue Procedure 2007-66, which contains other amounts that are adjusted annually for inflation, will be modified in the near future to include the 2008 inflation adjusted items listed above.
Thursday, December 20, 2007
IR-2007-204: IRS Releases Final 2008 Form 990 for Tax-Exempt Organizations, Adjusts Filing Threshold to Provide Transition Relief
IRS Releases Final 2008 Form 990 for Tax-Exempt Organizations, Adjusts Filing Threshold to Provide Transition Relief
WASHINGTON — The Internal Revenue Service issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.
“When we released the redesigned draft form this past June, we said we needed a Form 990 that reflects the way this growing sector operates in the 21st century,” said Steven T. Miller, Commissioner of the IRS’ Tax Exempt and Government Entities division. “The public comments we received in response to our draft form helped us develop a final form consistent with our guiding principles of transparency, compliance and burden minimization.”
The final form released today retains the redesigned draft’s format of a core form and a series of schedules. In response to public comments, the new core form allows an organization to describe its exempt accomplishments and mission up-front and provides more opportunities throughout the form for the organization to explain its activities. Other major changes were made to the form’s summary page, governance section, and various schedules, including those relating to executive compensation, related organizations, foreign activities, hospitals, non-cash contributions and tax exempt bonds. A checklist of schedules was also added.
“We could not have done this without the tremendous input of the tax-exempt sector, the practitioner groups and the states,” said Lois G. Lerner, Director of Exempt Organizations. “The almost 700 public comment letters, the advice and counsel of numerous nonprofit experts and state regulators, and the input from the nonprofit sector’s leaders, were invaluable as we moved from the June discussion draft to the final form we released today.”
The new form will be used for the 2008 tax year (returns filed in 2009). The IRS plans to release the related instructions in early 2008. “We are continuing to work with the nonprofit sector to complete the new form’s instructions,” said Lerner.
The IRS also announced a graduated transition period for smaller organizations. These organizations will be allowed to file the Form 990-EZ instead of the Form 990. For the 2008 tax year (returns filed in 2009), organizations with gross receipts over $1.0 million or total assets over $2.5 million will be required to file the Form 990. For the 2009 tax year (returns filed in 2010), organizations with gross receipts over $500,000 or total assets over $1.25 million will be required to file the Form 990. The filing thresholds will be set permanently at $200,000 gross receipts and $500,000 total assets beginning with the 2010 tax year. Also, starting with the 2010 tax year, the IRS will increase the filing threshold for organizations required to file Form 990-N (the e-postcard) from $25,000 to $50,000.
“This phase-in process will allow organizations to become familiar with the new Form 990,” Lerner said.
The IRS also announced a phase-in of the form’s new hospital and tax exempt bond schedules. Certain identifying information will be required for the 2008 tax year, with completion of the entire schedules required for the 2009 tax year. In response to the nonprofit sector's safety and security concerns regarding disclosure of certain foreign workers and volunteers, the IRS revised the form to permit reporting of foreign activities by region, rather than by country, until other safeguards may be implemented to protect the privacy interests of such persons.
“We believe the transition relief we are providing is appropriate and meaningful, and will ease the concerns raised by commenters,” said Lerner.
The final Form 990 and background material explaining the changes from the current form and the June draft are available on the Exempt Organizations portion of the IRS Web site, IRS.gov/eo.
Link: Form 990 Redesign for Tax Year 2008 -- http://www.irs.gov/charities/article/0,,id=176613,00.html
WASHINGTON — The Internal Revenue Service issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.
“When we released the redesigned draft form this past June, we said we needed a Form 990 that reflects the way this growing sector operates in the 21st century,” said Steven T. Miller, Commissioner of the IRS’ Tax Exempt and Government Entities division. “The public comments we received in response to our draft form helped us develop a final form consistent with our guiding principles of transparency, compliance and burden minimization.”
The final form released today retains the redesigned draft’s format of a core form and a series of schedules. In response to public comments, the new core form allows an organization to describe its exempt accomplishments and mission up-front and provides more opportunities throughout the form for the organization to explain its activities. Other major changes were made to the form’s summary page, governance section, and various schedules, including those relating to executive compensation, related organizations, foreign activities, hospitals, non-cash contributions and tax exempt bonds. A checklist of schedules was also added.
“We could not have done this without the tremendous input of the tax-exempt sector, the practitioner groups and the states,” said Lois G. Lerner, Director of Exempt Organizations. “The almost 700 public comment letters, the advice and counsel of numerous nonprofit experts and state regulators, and the input from the nonprofit sector’s leaders, were invaluable as we moved from the June discussion draft to the final form we released today.”
The new form will be used for the 2008 tax year (returns filed in 2009). The IRS plans to release the related instructions in early 2008. “We are continuing to work with the nonprofit sector to complete the new form’s instructions,” said Lerner.
The IRS also announced a graduated transition period for smaller organizations. These organizations will be allowed to file the Form 990-EZ instead of the Form 990. For the 2008 tax year (returns filed in 2009), organizations with gross receipts over $1.0 million or total assets over $2.5 million will be required to file the Form 990. For the 2009 tax year (returns filed in 2010), organizations with gross receipts over $500,000 or total assets over $1.25 million will be required to file the Form 990. The filing thresholds will be set permanently at $200,000 gross receipts and $500,000 total assets beginning with the 2010 tax year. Also, starting with the 2010 tax year, the IRS will increase the filing threshold for organizations required to file Form 990-N (the e-postcard) from $25,000 to $50,000.
“This phase-in process will allow organizations to become familiar with the new Form 990,” Lerner said.
The IRS also announced a phase-in of the form’s new hospital and tax exempt bond schedules. Certain identifying information will be required for the 2008 tax year, with completion of the entire schedules required for the 2009 tax year. In response to the nonprofit sector's safety and security concerns regarding disclosure of certain foreign workers and volunteers, the IRS revised the form to permit reporting of foreign activities by region, rather than by country, until other safeguards may be implemented to protect the privacy interests of such persons.
“We believe the transition relief we are providing is appropriate and meaningful, and will ease the concerns raised by commenters,” said Lerner.
The final Form 990 and background material explaining the changes from the current form and the June draft are available on the Exempt Organizations portion of the IRS Web site, IRS.gov/eo.
Link: Form 990 Redesign for Tax Year 2008 -- http://www.irs.gov/charities/article/0,,id=176613,00.html
IR-2007-203: Misclassified Workers to File New Social Security Tax Form
Misclassified Workers to File New Social Security Tax Form
WASHINGTON — The Internal Revenue Service has developed a new form for employees who have been misclassified as independent contractors by an employer. Form 8919, Uncollected Social Security and Medicare Tax on Wages, will now be used to figure and report the employee’s share of uncollected social security and Medicare taxes due on their compensation.
Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay self-employment tax on the net profit, using Schedule SE. However, sometimes the worker is incorrectly treated as an independent contractor when they are actually an employee. When this happens, Form 8919 will be used beginning for tax year 2007 by workers who performed services for an employer but the employer did not withhold the worker’s share of social security and Medicare taxes.
In addition, the worker must meet one of several criteria indicating they were an employee while performing the services. The criteria include:
* The worker has filed Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, and received a determination letter from the IRS stating they are an employee of the firm.
* The worker has been designated as a section 530 employee by their employer or by the IRS prior to January 1, 1997.
* The worker has received other correspondence from the IRS that states they are an employee.
* The worker was previously treated as an employee by the firm and they are performing services in a similar capacity and under similar direction and control.
* The worker’s co-workers are performing similar services under similar direction and control and are treated as employees.
* The worker’s co-workers are performing similar services under similar direction and control and filed Form SS-8 for the firm and received a determination that they were employees.
* The worker has filed Form SS-8 with the IRS and has not yet received a reply.
By using Form 8919, the worker’s social security and Medicare taxes will be credited to their social security record. To facilitate this process, the IRS will electronically share Form 8919 data with the Social Security Administration.
In the past, misclassified workers often used Form 4137 to report their share of social security and Medicare taxes. Misclassified workers should no longer use this form. Instead, Form 4137 should now only be used by tipped employees to report social security and Medicare taxes on allocated tips and tips not reported to their employers.
WASHINGTON — The Internal Revenue Service has developed a new form for employees who have been misclassified as independent contractors by an employer. Form 8919, Uncollected Social Security and Medicare Tax on Wages, will now be used to figure and report the employee’s share of uncollected social security and Medicare taxes due on their compensation.
Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay self-employment tax on the net profit, using Schedule SE. However, sometimes the worker is incorrectly treated as an independent contractor when they are actually an employee. When this happens, Form 8919 will be used beginning for tax year 2007 by workers who performed services for an employer but the employer did not withhold the worker’s share of social security and Medicare taxes.
In addition, the worker must meet one of several criteria indicating they were an employee while performing the services. The criteria include:
* The worker has filed Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, and received a determination letter from the IRS stating they are an employee of the firm.
* The worker has been designated as a section 530 employee by their employer or by the IRS prior to January 1, 1997.
* The worker has received other correspondence from the IRS that states they are an employee.
* The worker was previously treated as an employee by the firm and they are performing services in a similar capacity and under similar direction and control.
* The worker’s co-workers are performing similar services under similar direction and control and are treated as employees.
* The worker’s co-workers are performing similar services under similar direction and control and filed Form SS-8 for the firm and received a determination that they were employees.
* The worker has filed Form SS-8 with the IRS and has not yet received a reply.
By using Form 8919, the worker’s social security and Medicare taxes will be credited to their social security record. To facilitate this process, the IRS will electronically share Form 8919 data with the Social Security Administration.
In the past, misclassified workers often used Form 4137 to report their share of social security and Medicare taxes. Misclassified workers should no longer use this form. Instead, Form 4137 should now only be used by tipped employees to report social security and Medicare taxes on allocated tips and tips not reported to their employers.
IR-2007-202: IRS Works to Quickly, Accurately Implement AMT Patch
IRS Works to Quickly, Accurately Implement AMT Patch
WASHINGTON — The Internal Revenue Service announced it will immediately begin the final reprogramming steps for its income-tax processing systems to prepare for the upcoming tax season following final passage of the Alternative Minimum Tax “patch” Wednesday by the House.
“Our people will do everything they can to quickly update our systems for this major change and make this filing season as smooth as possible for everyone,” said Linda Stiff, IRS Acting Commissioner. “Our goal is to process tax returns accurately and to issue refunds to taxpayers as quickly as possible.”
The AMT and AMT-related tax calculations affect a number of core IRS processing systems that will need to be updated. The IRS is continuing to aggressively explore options for the 2008 filing season in order to minimize the impact of processing delays on taxpayers. Additional details will be available to the public as soon as plans are finalized.
To help the tax professional and software communities prepare for the upcoming filing season, revised copies of the 12 tax forms impacted by the AMT legislation will be posted to IRS.gov within 72 hours after the AMT patch is signed into law.
As more details on the AMT situation develop, the IRS encourages taxpayers to visit IRS.gov for more information.
WASHINGTON — The Internal Revenue Service announced it will immediately begin the final reprogramming steps for its income-tax processing systems to prepare for the upcoming tax season following final passage of the Alternative Minimum Tax “patch” Wednesday by the House.
“Our people will do everything they can to quickly update our systems for this major change and make this filing season as smooth as possible for everyone,” said Linda Stiff, IRS Acting Commissioner. “Our goal is to process tax returns accurately and to issue refunds to taxpayers as quickly as possible.”
The AMT and AMT-related tax calculations affect a number of core IRS processing systems that will need to be updated. The IRS is continuing to aggressively explore options for the 2008 filing season in order to minimize the impact of processing delays on taxpayers. Additional details will be available to the public as soon as plans are finalized.
To help the tax professional and software communities prepare for the upcoming filing season, revised copies of the 12 tax forms impacted by the AMT legislation will be posted to IRS.gov within 72 hours after the AMT patch is signed into law.
As more details on the AMT situation develop, the IRS encourages taxpayers to visit IRS.gov for more information.
Wednesday, December 19, 2007
IR-2007-201: Procedure Unveiled for Reporting Violations of the Tax Law, Making Reward Claims
Procedure Unveiled for Reporting Violations of the Tax Law, Making Reward Claims
WASHINGTON — The Internal Revenue Service today outlined ways informants can report violations of the tax law and possibly claim a reward based on the amount of additional tax, penalties and interest that is owed.
“Since Congress enacted new procedures increasing award amounts last year, informants have come forward with information on alleged tax noncompliance amounting to tens of millions of dollars, and in some cases hundreds of millions of dollars,” said Stephen Whitlock, Director of the Whistleblower Office.
Since the Whistleblower Office was created in December 2006, the IRS has received about 80 claims, half of those submitted in just the last two and a half months. To make a claim, an informant must file new Form 211, Application for Award for Original Information, which asks informants to provide an estimate of the tax owed, the pertinent facts in the case and an explanation of how the informant obtained the information.
The IRS’ Whistleblower Office will make the final determination about whether an award will be paid and the amount of the award for claims that it processes. Awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected.
Under the new procedures, the amount of award will be at least 15%, but no more than 30%, of the collected proceeds in cases in which the IRS determines that the information submitted by the informant substantially contributed to the collection of tax. The award percentage may be reduced in some circumstances, which are described in IRS guidance.
To be eligible for an award under the new procedures, the tax, penalties, interest, additions to tax, and additional amounts in dispute must exceed $2 million for any taxable year and, if the taxpayer is an individual, the individual’s gross income must exceed $200,000 for any taxable year in question.
All awards will be subject to normal tax reporting and withholding requirements.
Related Items:
* Notice 2008-4 -- http://www.irs.gov/pub/irs-drop/n-08-04.pdf
* Form 211 -- http://www.irs.gov/pub/irs-pdf/f211.pdf
WASHINGTON — The Internal Revenue Service today outlined ways informants can report violations of the tax law and possibly claim a reward based on the amount of additional tax, penalties and interest that is owed.
“Since Congress enacted new procedures increasing award amounts last year, informants have come forward with information on alleged tax noncompliance amounting to tens of millions of dollars, and in some cases hundreds of millions of dollars,” said Stephen Whitlock, Director of the Whistleblower Office.
Since the Whistleblower Office was created in December 2006, the IRS has received about 80 claims, half of those submitted in just the last two and a half months. To make a claim, an informant must file new Form 211, Application for Award for Original Information, which asks informants to provide an estimate of the tax owed, the pertinent facts in the case and an explanation of how the informant obtained the information.
The IRS’ Whistleblower Office will make the final determination about whether an award will be paid and the amount of the award for claims that it processes. Awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected.
Under the new procedures, the amount of award will be at least 15%, but no more than 30%, of the collected proceeds in cases in which the IRS determines that the information submitted by the informant substantially contributed to the collection of tax. The award percentage may be reduced in some circumstances, which are described in IRS guidance.
To be eligible for an award under the new procedures, the tax, penalties, interest, additions to tax, and additional amounts in dispute must exceed $2 million for any taxable year and, if the taxpayer is an individual, the individual’s gross income must exceed $200,000 for any taxable year in question.
All awards will be subject to normal tax reporting and withholding requirements.
Related Items:
* Notice 2008-4 -- http://www.irs.gov/pub/irs-drop/n-08-04.pdf
* Form 211 -- http://www.irs.gov/pub/irs-pdf/f211.pdf
Friday, December 14, 2007
IR-2007-200: IRS Fast Track Settlement Program Expands
IRS Fast Track Settlement Program Expands
WASHINGTON — The Internal Revenue Service today announced it is expanding the number of test areas for the Fast Track Settlement program for taxpayers under examination by the Small Business/Self-Employed Division.
The settlement program is now available for small businesses and self-employed taxpayers until Sept. 5, 2008, in five new areas, including Philadelphia, central New Jersey, San Diego, Laguna Nigel, Calif., and Riverside, Calif.
The Fast Track program is continuing in the three original test cities of Chicago, Houston and St. Paul.
The program is a jointly administered process designed to expedite case resolution. Under Fast Track, taxpayers under examination with issues in dispute work with IRS representatives from SBSE’s examination unit and the Appeals Division to resolve those issues.
Fast Track employs various techniques to facilitate case resolution. A taxpayer or IRS examination representative may initiate the Fast Track process after an issue is fully developed, and preferably before a 30-day letter is issued. The Fast Track process is designed to be completed within 60 days of acceptance of the application.
Taxpayers retain the right to request their issue be addressed through the traditional appeals process if Fast Track fails to yield a resolution.
Examination and Appeals officials will re-evaluate the Fast Track program after this test phase is completed on Sept. 5, 2008. This phase will help determine whether Fast Track is adjusted, expanded to more areas or made available nationwide.
The Small Business/Self-Employed Division Fast Track Settlement program was originally launched in September 2006. Additional background is available in IRS Announcement 2006-61.
WASHINGTON — The Internal Revenue Service today announced it is expanding the number of test areas for the Fast Track Settlement program for taxpayers under examination by the Small Business/Self-Employed Division.
The settlement program is now available for small businesses and self-employed taxpayers until Sept. 5, 2008, in five new areas, including Philadelphia, central New Jersey, San Diego, Laguna Nigel, Calif., and Riverside, Calif.
The Fast Track program is continuing in the three original test cities of Chicago, Houston and St. Paul.
The program is a jointly administered process designed to expedite case resolution. Under Fast Track, taxpayers under examination with issues in dispute work with IRS representatives from SBSE’s examination unit and the Appeals Division to resolve those issues.
Fast Track employs various techniques to facilitate case resolution. A taxpayer or IRS examination representative may initiate the Fast Track process after an issue is fully developed, and preferably before a 30-day letter is issued. The Fast Track process is designed to be completed within 60 days of acceptance of the application.
Taxpayers retain the right to request their issue be addressed through the traditional appeals process if Fast Track fails to yield a resolution.
Examination and Appeals officials will re-evaluate the Fast Track program after this test phase is completed on Sept. 5, 2008. This phase will help determine whether Fast Track is adjusted, expanded to more areas or made available nationwide.
The Small Business/Self-Employed Division Fast Track Settlement program was originally launched in September 2006. Additional background is available in IRS Announcement 2006-61.
Wednesday, December 12, 2007
IR-2007-198: Certain Payments to Disabled Veterans Ruled Tax-Free; Some May Be Due Refunds
Certain Payments to Disabled Veterans Ruled Tax-Free; Some May Be Due Refunds
WASHINGTON — Payments under the Department of Veterans Affairs (VA) Compensated Work Therapy (CWT) program are no longer taxable and disabled veterans who paid tax on these benefits in the past three years can now claim refunds, the Internal Revenue Service said today.
Recipients of CWT payments will no longer receive a Form 1099 from the Department of Veterans Affairs. Disabled veterans who paid tax on these benefits in tax-years 2004, 2005 or 2006 can claim a refund by filing an amended return using IRS Form 1040X. According to the VA, more than 19,000 veterans received CWT in Fiscal Year 2007.
The IRS agreed with a U.S. Tax Court decision issued earlier this year, which held that CWT payments are tax-free veterans’ benefits. In so doing, the agency reversed a 1965 ruling which held that these payments were taxable and required the VA to issue 1099 forms to payment recipients.
According to the VA, the CWT program provides assistance to veterans unable to work and support themselves. Under the program, the VA contracts with private industry and the public sector for work by veterans, who learn new job skills, re-learn successful work habits and regain a sense of self-esteem and self-worth.
Related Item: Revenue Ruling 2007-69 -- http://www.irs.gov/pub/irs-drop/rr-07-69.pdf
WASHINGTON — Payments under the Department of Veterans Affairs (VA) Compensated Work Therapy (CWT) program are no longer taxable and disabled veterans who paid tax on these benefits in the past three years can now claim refunds, the Internal Revenue Service said today.
Recipients of CWT payments will no longer receive a Form 1099 from the Department of Veterans Affairs. Disabled veterans who paid tax on these benefits in tax-years 2004, 2005 or 2006 can claim a refund by filing an amended return using IRS Form 1040X. According to the VA, more than 19,000 veterans received CWT in Fiscal Year 2007.
The IRS agreed with a U.S. Tax Court decision issued earlier this year, which held that CWT payments are tax-free veterans’ benefits. In so doing, the agency reversed a 1965 ruling which held that these payments were taxable and required the VA to issue 1099 forms to payment recipients.
According to the VA, the CWT program provides assistance to veterans unable to work and support themselves. Under the program, the VA contracts with private industry and the public sector for work by veterans, who learn new job skills, re-learn successful work habits and regain a sense of self-esteem and self-worth.
Related Item: Revenue Ruling 2007-69 -- http://www.irs.gov/pub/irs-drop/rr-07-69.pdf
IR-2007-199: Electronic Tax Advisory Committee Gets New Chairman and Members
Electronic Tax Advisory Committee Gets New Chairman and Members
WASHINGTON — The Internal Revenue Service today announced the selection of six new members of the Electronic Tax Administration Advisory Committee (ETAAC). The Treasury Department and the IRS Commissioner have approved the new members to serve a three-year term beginning November 2007 and ending in November 2010.
ETAAC serves as a public forum for discussion of electronic tax administration issues and supports the goal of increasing electronic interactions between tax professionals and the IRS.
“The IRS is pleased with the continued support of the ETAAC group,” said David R. Williams, director, IRS Electronic Tax Administration and Refundable Credits. “ETAAC supports the goal of electronic tax administration by encouraging taxpayers to transact and communicate electronically with the IRS.”
The new members are:
* Grant DeMeritte, Silver Spring, Md. DeMeritte is a certified public accountant and the tax compliance manager for the Howard Hughes Medical Institute. DeMeritte e-files state employment tax returns, exempt organization returns and transmits information returns using the IRS Filing Information Returns Electronically (FIRE) System.
* Brian Digman, Albany, N.Y. Digman is the chief information officer at the New York State Department of Taxation and Finance. Digman is responsible for operating technology systems, overseeing applications development, establishing technology policies and leading strategic planning.
* Susan Gaston, Kansas City, Mo. Gaston is a CPA and is currently the Director of Industry Operations for H&R Block. Gaston is the liaison between H&R Block and the IRS/states electronic tax administration departments. She is also engaged in operational and compliance issues with regard to the IRS, e-file and tax preparation.
* Roberto Jimenez-Ortiz, Woodbridge, Va. Jimenez-Ortiz is an advisor to the World Bank in Washington, D.C., and a seasonal tax professional with H&R Block. Jimenez-Ortiz has more than 20 years of professional experience with international financial issues and has designed strategic plans for the Hispanic community.
* William B. Marshall, III, Shreveport, La. Marshall is an enrolled agent and a member manager of Marshall and Associates, LLC. Marshall has more than 10 years of experience in electronic filing. He is responsible for preparing more than 600 individual and business returns yearly.
* Ryan Snow, Roosevelt, Utah. Snow is a certified public accountant and the chief financial officer for Burdick Paving. Snow has a Masters of Business Administration. He is responsible for e-filing corporate tax returns and managing all financial aspects of the company.
* Tim Hubbs, Franklin, N.C. Hubbs has agreed to serve as the chairman of ETAAC for 2007. Hubbs is president and CEO of Drake Software, a software provider to tax firms for preparing and e-filing tax returns. In 2007, Drake customers transmitted more than 7.2 million federally accepted income tax returns and more than 6.2 million state returns.
The ETAAC group provides input into the development and implementation of IRS strategy for electronic tax administration. Each June, the ETAAC submits an annual report to Congress reporting on the progress of IRS electronic tax initiatives.
ETAAC was created in 1998 by the IRS Electronic Tax Administration as required by the IRS Restructuring and Reform Act of 1998.
WASHINGTON — The Internal Revenue Service today announced the selection of six new members of the Electronic Tax Administration Advisory Committee (ETAAC). The Treasury Department and the IRS Commissioner have approved the new members to serve a three-year term beginning November 2007 and ending in November 2010.
ETAAC serves as a public forum for discussion of electronic tax administration issues and supports the goal of increasing electronic interactions between tax professionals and the IRS.
“The IRS is pleased with the continued support of the ETAAC group,” said David R. Williams, director, IRS Electronic Tax Administration and Refundable Credits. “ETAAC supports the goal of electronic tax administration by encouraging taxpayers to transact and communicate electronically with the IRS.”
The new members are:
* Grant DeMeritte, Silver Spring, Md. DeMeritte is a certified public accountant and the tax compliance manager for the Howard Hughes Medical Institute. DeMeritte e-files state employment tax returns, exempt organization returns and transmits information returns using the IRS Filing Information Returns Electronically (FIRE) System.
* Brian Digman, Albany, N.Y. Digman is the chief information officer at the New York State Department of Taxation and Finance. Digman is responsible for operating technology systems, overseeing applications development, establishing technology policies and leading strategic planning.
* Susan Gaston, Kansas City, Mo. Gaston is a CPA and is currently the Director of Industry Operations for H&R Block. Gaston is the liaison between H&R Block and the IRS/states electronic tax administration departments. She is also engaged in operational and compliance issues with regard to the IRS, e-file and tax preparation.
* Roberto Jimenez-Ortiz, Woodbridge, Va. Jimenez-Ortiz is an advisor to the World Bank in Washington, D.C., and a seasonal tax professional with H&R Block. Jimenez-Ortiz has more than 20 years of professional experience with international financial issues and has designed strategic plans for the Hispanic community.
* William B. Marshall, III, Shreveport, La. Marshall is an enrolled agent and a member manager of Marshall and Associates, LLC. Marshall has more than 10 years of experience in electronic filing. He is responsible for preparing more than 600 individual and business returns yearly.
* Ryan Snow, Roosevelt, Utah. Snow is a certified public accountant and the chief financial officer for Burdick Paving. Snow has a Masters of Business Administration. He is responsible for e-filing corporate tax returns and managing all financial aspects of the company.
* Tim Hubbs, Franklin, N.C. Hubbs has agreed to serve as the chairman of ETAAC for 2007. Hubbs is president and CEO of Drake Software, a software provider to tax firms for preparing and e-filing tax returns. In 2007, Drake customers transmitted more than 7.2 million federally accepted income tax returns and more than 6.2 million state returns.
The ETAAC group provides input into the development and implementation of IRS strategy for electronic tax administration. Each June, the ETAAC submits an annual report to Congress reporting on the progress of IRS electronic tax initiatives.
ETAAC was created in 1998 by the IRS Electronic Tax Administration as required by the IRS Restructuring and Reform Act of 1998.
Thursday, December 6, 2007
IR-2007-197: IRS Announces Groundbreaking OPR Settlement with Attorneys
IRS Announces Groundbreaking OPR Settlement with Attorneys
WASHINGTON — The Internal Revenue Service's Office of Professional Responsibility (OPR) announced today a settlement agreement with Michael C. Ormsby and David O. Thompson, in connection with a $31 million municipal bond issuance involving River Park Square in Spokane, Washington in 1998 handled by the former firm of Preston, Gates & Ellis LLP.
OPR raised allegations, including the scope of due diligence, under Treasury Department Circular 230 sections 10.22, 10.29, 10.34, and 10.51(j), with respect to the tax aspects of the bond opinion rendered in the matter. The Respondents filed answers denying the allegations. In the settlement, the attorneys agreed to comply fully with practices and procedures implemented by their current firm in its public finance group, including but not limited to (i) submitting new matters to a review and approval process, (ii) completing questionnaires and checklists to document the due diligence activities undertaken in the matter, and (iii) following practices and procedures established by the firm's opinion committee for municipal bond opinions. The attorneys also agreed that, for a period of 18 months from the date of settlement, any opinion proposed to be delivered by the attorneys in connection with certain specified financings will be reviewed and approved by the leader of the public finance group, who is also a member of the firm's opinion committee. OPR believes the settlement will result in enhanced oversight of the state and local bond practice of these attorneys and will help assure their compliance with the applicable requirements of Circular 230. OPR agreed that implementation of such practices and procedures is appropriate for municipal bond attorney practice.
OPR and the attorneys agreed that the settlement does not constitute any admission of wrongdoing by, or a sanction of, the attorneys.
The Office of Professional Responsibility is pleased to have reached an agreement that demonstrates its commitment to ensuring bond lawyers comply with Circular 230 when involved in tax-exempt municipal bond issuances. Such efforts are an outgrowth of OPR's enhanced oversight of Circular 230 practitioners.
The settlement agreement included a disclosure authorization that allowed the Office of Professional Responsibility to issue this release.
Related Items:
* Frequently Asked Questions about OPR -- http://www.irs.gov/taxpros/agents/article/0,,id=123370,00.html
* Latest News from OPR -- http://www.irs.gov/taxpros/agents/article/0,,id=100709,00.html
WASHINGTON — The Internal Revenue Service's Office of Professional Responsibility (OPR) announced today a settlement agreement with Michael C. Ormsby and David O. Thompson, in connection with a $31 million municipal bond issuance involving River Park Square in Spokane, Washington in 1998 handled by the former firm of Preston, Gates & Ellis LLP.
OPR raised allegations, including the scope of due diligence, under Treasury Department Circular 230 sections 10.22, 10.29, 10.34, and 10.51(j), with respect to the tax aspects of the bond opinion rendered in the matter. The Respondents filed answers denying the allegations. In the settlement, the attorneys agreed to comply fully with practices and procedures implemented by their current firm in its public finance group, including but not limited to (i) submitting new matters to a review and approval process, (ii) completing questionnaires and checklists to document the due diligence activities undertaken in the matter, and (iii) following practices and procedures established by the firm's opinion committee for municipal bond opinions. The attorneys also agreed that, for a period of 18 months from the date of settlement, any opinion proposed to be delivered by the attorneys in connection with certain specified financings will be reviewed and approved by the leader of the public finance group, who is also a member of the firm's opinion committee. OPR believes the settlement will result in enhanced oversight of the state and local bond practice of these attorneys and will help assure their compliance with the applicable requirements of Circular 230. OPR agreed that implementation of such practices and procedures is appropriate for municipal bond attorney practice.
OPR and the attorneys agreed that the settlement does not constitute any admission of wrongdoing by, or a sanction of, the attorneys.
The Office of Professional Responsibility is pleased to have reached an agreement that demonstrates its commitment to ensuring bond lawyers comply with Circular 230 when involved in tax-exempt municipal bond issuances. Such efforts are an outgrowth of OPR's enhanced oversight of Circular 230 practitioners.
The settlement agreement included a disclosure authorization that allowed the Office of Professional Responsibility to issue this release.
Related Items:
* Frequently Asked Questions about OPR -- http://www.irs.gov/taxpros/agents/article/0,,id=123370,00.html
* Latest News from OPR -- http://www.irs.gov/taxpros/agents/article/0,,id=100709,00.html
Wednesday, December 5, 2007
IR-2007-196: IRS Issues List of Vehicles that Qualify for the Alternative Motor Vehicle Credit
IRS Issues List of Vehicles that Qualify for the Alternative Motor Vehicle Credit
WASHINGTON — Purchasers of certain large trucks, buses or other heavy vehicles running on alternative fuel can claim a credit of up $32,000, and purchasers of certain large hybrid trucks and other heavy hybrid vehicles can claim a credit of up to $12,000 if they qualify for the Alternative Motor Vehicle Credit.
Qualified Alternative Fuel Motor Vehicles (QAFMV) are powered solely by alternative fuels, such as compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen and any liquid at least 85 percent of the volume of which consists of methanol. Vehicles powered by a combination of an alternative fuel and a petroleum-based fuel may qualify for a reduced credit. Purchases of new vehicles with special equipment, as well as ones converted for alternative power, may qualify.
A credit also is available for certain new qualified heavy hybrid vehicles with a gross vehicle weight rating in excess of 8,500 pounds. A qualifying heavy hybrid motor vehicle draws propulsion energy from onboard sources of stored energy which are both an internal combustion or heat engine using consumable fuel, and a rechargeable energy storage system. This credit should be not confused with the alternative motor vehicle credit for qualified hybrid passenger automobiles and light trucks.
The list of vehicles is updated periodically -- http://www.irs.gov/businesses/article/0,,id=175456,00.html
WASHINGTON — Purchasers of certain large trucks, buses or other heavy vehicles running on alternative fuel can claim a credit of up $32,000, and purchasers of certain large hybrid trucks and other heavy hybrid vehicles can claim a credit of up to $12,000 if they qualify for the Alternative Motor Vehicle Credit.
Qualified Alternative Fuel Motor Vehicles (QAFMV) are powered solely by alternative fuels, such as compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen and any liquid at least 85 percent of the volume of which consists of methanol. Vehicles powered by a combination of an alternative fuel and a petroleum-based fuel may qualify for a reduced credit. Purchases of new vehicles with special equipment, as well as ones converted for alternative power, may qualify.
A credit also is available for certain new qualified heavy hybrid vehicles with a gross vehicle weight rating in excess of 8,500 pounds. A qualifying heavy hybrid motor vehicle draws propulsion energy from onboard sources of stored energy which are both an internal combustion or heat engine using consumable fuel, and a rechargeable energy storage system. This credit should be not confused with the alternative motor vehicle credit for qualified hybrid passenger automobiles and light trucks.
The list of vehicles is updated periodically -- http://www.irs.gov/businesses/article/0,,id=175456,00.html
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