Tax News You Can Use – March 2016

Posted on March 10, 2016 · Posted in Industry News

3/5/16 – IRS News:

Increased Penalty for Failure to File Return – H.R. 644, the “Trade Facilitation and Trade Enforcement Act of 2015,” which was signed into law on February 24, 2016, included a provision that increases the §6651(a) penalty for failure to file an income tax return within 60 days of the due date, including extensions, to the lesser of $205 (previously $135) or 100 percent of tax due. This applies to returns required to be filed in calendar years after 2015.

Verify Your EFIN Activity – The IRS reminds practitioners to ensure that their Electronic Filing Identification Number (EFIN) has not been compromised by checking their EFIN status page within their e-file application, and compare their record to the returns filed. Click here for details.

New Form 8971 – The IRS has released the final version of new  Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, along with instructions, which must be used to report the final estate tax value of property distributed or to be distributed from an estate that filed a Federal estate tax return after July 2015. With Notice 2016-19, the IRS has delayed the due date for statements reporting the value of an estate’s assets, this time from February 29, 2016 to March 31, 2016.

TIN Matching Program – The Taxpayer Identification Number (TIN) Matching Program can help avoid costly penalties and expenses for invalid Form 1099 filings. The IRS offers this web-based tool to assist certain Form 1099 filers with perfecting their payee data.

Revised Publication 974 –  Publication 974, Premium Tax Credit has been revised and provides additional instructions for taxpayers in special situations who purchased 2015 health care coverage from the Health Insurance Marketplace.

Health Coverage Information Return Deadlines – The IRS recently extended the information reporting due dates for insurers, self-insuring employers, other health coverage providers and applicable large employers. Click here for a convenient chart listing the filing requirements and the extended 2016 deadlines.

Tangible Property Regulations Webinar – The IRS’ Tangible Property Regulations webinar is now available for viewing in the IRS Video Portal. Viewers can also download the Power Point presentation and transcript.

Higher Education Credit – The IRS reminds preparers that their clients may qualify for either the American Opportunity Credit (AOTC) or the Lifetime Learning Credit (LLC) if they paid for higher education for themselves or immediate family members. An institution of higher education should provide clients with Form 1098-T, Tuition Statement, showing expenses paid for the year. The amounts shown on the form may be different than the amount the client actually paid. When figuring the credit, preparers should be sure to verify whether the client paid any additional qualified education expenses not shown on the form. Form 1098-T contains information needed to complete Form 8863, Education Credits.

March 9 Forum on the IRS Future State Initiative – The second in a series of public forums on taxpayer service and the Future State of the IRS, held by National Taxpayer Advocate Nina E. Olson, will take place on Wednesday, March 9 in Glen Ellyn, Illinois. The IRS’ Future State Initiative envisions how it will operate in five years and beyond. Members of the public and the media are invited to attend. Click here for details.

FTB News: 

FTB Tax News – The March 2016 issue of Tax News, FTB’s monthly online publication, includes the following articles:

  • Medical Marijuana Business Webpage Recently Launched
  • Tips for Filing a Power of Attorney Declaration Using MyFTB
  • Important Return Processing Trends That May Affect You

Click here to subscribe to Tax News and news flashes to automatically receive urgent, time-sensitive information via email.

Non-Wage Withholding in MyFTB – The FTB has identified up to 131,000 individuals whose MyFTB accounts will not be viewable because they have multiple nonwage withholding credits. The FTB anticipates resolving this issue by early summer so that all taxpayers with nonwage withholding credits will be able to view their accounts on MyFTB. Click here for details.

POAs Must Confirm Email Address to Receive Electronic Notifications – With the enhanced MyFTB, Power of Attorney (POA) representatives and taxpayers can elect to receive electronic notification when a notice or correspondence is available to view in MyFTB. Effective February 1, 2016, POA representatives who provided their email address on a POA Declaration will receive email notification when their client has notices or correspondence available in MyFTB. POA representatives will no longer receive a copy of the notice via US mail. Email notifications will prompt the POA representative to access MyFTB to view the notice online. The email will not include any identifying client information. Click here for more information.


BOE News: 

Tax Relief Available for Business Owners Affected by the Aliso Canyon Gas Leak – Business owners and fee payers impacted by the gas leak in Aliso Canyon may request an extension to file their tax returns and relief from penalties and/or interest on some taxes and fees. Click here for details.

Sales and Use Tax Rate Changes – Click here for sales and use tax rate changes for the cities of Dunsmuir, Greenfield, Half Moon Bay, Hercules, Novato, San Mateo, South San Francisco and Tracy.

BOE Selects New Chair and Vice Chair – The BOE announced in a press release that it has selected member Fiona Ma as its new Chair and member Diane Harkey as Vice Chair on February 24, 2016. The BOE, which is the only elected tax board in the country, consists of five members and administers more than 30 tax and fee programs.


EDD News: 

California Competes Tax Credit Webinars – The Governor’s Office of Business and Economic Development (GO-Biz) is hosting webinars in March for businesses interested in applying for the California Competes Tax Credit (CCTC). GO-Biz will accept applications from March 7-28, 2016. There will be at least $81 million in tax credits available for businesses that are expanding and adding jobs in the state. The online application is available at Businesses interested in applying can also register to attend any of the webinars listed below:

Call 916-322-4051 or email for more information.