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IRS OUTREACH: Healthcare Tax Credit

Tuesday, September 13, 2011

WASHINGTON — As the upcoming filing extension tax deadlines approach, the Internal Revenue Service, in partnership with the Department of Health and Human Services, is announcing a new round of outreach to small employers and the professional service providers they rely on to encourage them to review the new Small Business Health Care Tax Credit to see if they are eligible.

"As the filing deadlines approach, we want to make sure that small business owners don't leave any money on the table,” said IRS Commissioner Doug Shulman. “Small businesses that offer health insurance should learn about this credit and claim it if they are eligible."

The small business health care tax credit was included in the Affordable Care Act enacted last year.  Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ 25 or fewer workers with average income of $50,000 or less.

Small employers face two important tax filing deadlines in coming weeks:

  • September 15. Corporations that file on a calendar year basis and requested an extension to file to September 15 can calculate the small employer health care credit on Form 8941 and claim it as part of the general business credit on Form 3800, which they would include with their corporate income tax return.
  • October 17. Sole proprietors who file Form 1040 and partners and S-corporation shareholders who report their income on Form 1040 and request an extension have until October 17 to complete their returns. They would also use Form 8941 to calculate the small employer health care credit and claim it as a general business credit on Form 3800, reflected on line 53 of Form 1040.

In addition, tax-exempt organizations that file on a calendar year basis and requested an extension to file to November 15 can use Form 8941 and then claim the credit on Form 990-T, Line 44f.

As these 2010 deadlines approach and businesses begin planning for the end of 2011 and 2012, the IRS’s new outreach campaign will focus on working with our partners:

  • The tax software industry to improve access to educational information and to help alert small employers and practitioners when taxpayers may be eligible for the credit.
  • Insurance agents, brokers and carriers who work with small businesses to help ensure that participants in the health insurance marketplace understand the features and benefits of the credit. The Department of Health and Human Services today sent an email to 2,000 agents and brokers alerting them to the credit for their small business clients.
  • The small business and tax practitioner community to provide additional webinars and educational opportunities about the credit.

Information will also be available through social media and other venues, including IRS YouTube videos in English, Spanish and American Sign Language. Targeted e-mails and tweets will be sent to the small business community and tax preparers.

The IRS’s new outreach effort will remind employers about the upcoming extension deadlines and will also provide details on other important information about the credit, including:

  • Businesses who have already filed can still claim the credit: For small businesses that have already filed and later determine they are eligible for the credit, they can always file an amended 2010 tax return. Corporations use Form 1120X and individual sole proprietors use Form 1040X
  • Businesses without tax liability this year can still benefit: The Small Business Jobs Act of 2010 provided that for Tax Year 2010, eligible small businesses may carry back unused general business credits (including the small employer health care tax credit) five years.  Previously these credits could only be carried back one year.  Small businesses that did not have tax liability to offset in 2010 should still evaluate eligibility for the small business health care tax credit in light of this expanded carry back opportunity.
  • Businesses that couldn’t use the credit in 2010 can claim it in future years: Some businesses that already locked into health insurance plan structures and contributions for 2010 may not have had the opportunity to make any needed adjustments to qualify for the credit for 2010. So these businesses may be eligible to claim the credit on 2011 returns or in years beyond. Small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

In addition to the IRS' announcement, HHS posted additional information on this credit to HealthCare.gov at: http://www.healthcare.gov/news/blog/smallbusiness09072011.html.



IRS Fresh Start Program

Monday, September 12, 2011

WASHINGTON — In its recent effort to help struggling taxpayers, the Internal Revenue Service announced a series of new steps to help people get a fresh start with their tax liabilities.

The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.

“We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” IRS Commissioner Doug Shulman said. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.”

The announcement centers on the IRS making important changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include:

  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
  • Creating easier access to Installment Agreements for more struggling small businesses.
  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.

“These steps are in the best interest of both taxpayers and the tax system,” Shulman said. “People will have a better chance to stay current on their taxes and keep their financial house in order. We all benefit if that happens.”

This is another in a series of steps to help struggling taxpayers. In 2008, the IRS announced lien relief for people trying to refinance or sell a home. In 2009, the IRS added new flexibility for taxpayers facing payment or collection problems. And last year, the IRS held about 1,000 special open houses to help small businesses and individuals resolve tax issues with the Agency.



Bank of Israel & The US Federal Reserve sign Statement of Cooperation

Friday, September 9, 2011

More Tax Issues for U.S. Citizens with Foreign Bank Accounts in Israel

On August 28, 2011, the Supervisor of Banks at the Bank of Israel and the supervisory authorities in the US––the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation––signed a Statement of Cooperation. The Governor of the Bank of Israel, Prof. Stanley Fischer, confirmed the signing of the document.

The signing of the Statement of Cooperation is intended to formalize and strengthen the cooperation between the Banking Supervision in Israel and the supervisory authorities in the US, in order to facilitate the process of supervising banks incorporated in both countries for purposes of cross-border activity, and to promote the safe and sound functioning of those banks. The Statement of Cooperation also reflects the commitment of the above mentioned authorities to the principles of consolidated supervision and cooperation among banking regulators.

 The Statement of Cooperation establishes a mechanism for the transfer of information between the authorities in the context of the authorization process of establishing cross-border banking activity in the US or Israel, and in the context of their ongoing function as regulators of banking activity.

 The Statement of Corporation also regularizes the cooperation in supervisory processes carried out by each of the authorities, including those related to planned inspections of cross-border establishments, the identification of suspected money-laundering activity or the financing of terrorism, and banking activity without a permit. The Statement of Cooperation also deals with the sharing of information about banks in Israeland the US under common ownership or control.

The Supervisor of Banks, David Zaken: "The arrangements set out in the Statement of Cooperation are expected to boost cooperation with the USauthorities with regard to the supervision of Israeli overseas banking offices operating in the US and the overseas offices of US banks operating inIsrael."

The announcement didn't specifically mention FBAR or foreign bank accounts, however, it appears that this will be just one more avenue for the Internal Revenue Service to pursue in locating U.S. citizens who have unreported bank accounts in Israel. According to the press release the Statement of Cooperation establishes a mechanism for the transfer of information between the authorities in the context of the authorization process of establishing cross-border banking activity in the US or Israel, and in the context of their ongoing function as regulators of banking activity.  When added to the ongoing grand jury investigations of Israeli banks, and the implementation of FATCA in 2013 it demonstrates the danger of continued non-reporting of foreign bank accounts-especially for dual Israeli citizens.



Santa Monica Tax Attorney

Wednesday, September 7, 2011

Thursday, September 01, 2011

Very few things make your tax picture brighter and your life easier than hiring a Santa Monica Tax Attorney to settle an outstanding liability by way of penalty abatement, filing  an Offer in Compromise,  or simply provide tax strategies and planning.  If you are thinking about hiring a Santa Monica Tax Attorney it is good to know their strengths and weaknesses before you make the investment.

santa monica TAX ATTORNEYS WORTH THE COST?

Santa Monica residents who have already hired a tax attorney know that hiring a Santa Monica Tax Attorney was  more costly, but this is expected when retaining the best.Although they might cost a bit more money than other options such as tax relief companies, or CPAs, most would say that Santa Monica Tax Attorneys are well worth the cost based on the results achieved.

BENEFITS OF HIRING A TAX ATTORNEY IN santa monica

Most discerning people choose to hire a Santa Monica Tax Attorney because of their unique and desirable experience and acumen.While there are some likely competitors on the market such as tax relief companies and the like, there’s just something about the superior results realized by Santa Monica Tax Attorneys that can’t be duplicated. It is that difference that keeps people choosing, and hiring Santa Monica Tax Attorneys , even though other options are less expensive. Despite the likely higher costs, Santa Monica Tax Attorneys are well worth it in the end.

After  realizing the fruits of hiring a Santa Monica Tax Attorney , these strategies can outlast most other results gained elsewhere by other means and pay for themselves in the long run; some attorney/client relationships, as well as the benefits of their sound advice can literally last a lifetime, or even longer with a good  Estate Plan J The superior results gained by Santa Monica Tax Attorneys can also add value to your overall financial picture, as your budget will likely be freed up of unnecessary tax burdens . While no tax liability goes unnoticed when assessing your overall asset value, some choices have a better return than others. While CPA firms and tax relief companies are extremely practical, less costly and useful in many ways, you won’t see the same kind of return after hiring them.

santa monica TAX ATTORNEY FOR LIFE

Despite some minor drawback like cost, hiring a Santa Monica Tax Attorney is, to many, well worth the investment. It will add benefit to your tax plan that no other tax practitioner  can quite compete with, be it, a tax relief company, CPA firm. Take great heed and care of your tax  plan and it will take care of you for a lifetime.

Strategic Tax Lawyers, LLP is a law firm proudly serving clients nationwide, throughout California, including Santa Monica.



BEVERLY HILLS TAX ATTORNEY

Thursday, September 1, 2011
Very few things make your tax picture brighter and your life easier than hiring a Beverly Hills Tax Attorney to settle an outstanding liability by way of penalty abatement, filing  an Offer in Compromise,  or simply provide tax strategies and planning.  If you are thinking about hiring a Beverly Hills Tax Attorney it is good to know their strengths and weaknesses before you make the investment.

BEVERLY HILLS TAX ATTORNEYS WORTH THE COST?

Beverly Hills residents who have already hired a tax attorney know that hiring a Beverly Hills Tax Attorney was  more costly, but this is expected when retaining the best.Although they might cost a bit more money than other options such as tax relief companies, or CPAs, most would say that Beverly Hills Tax Attorneys are well worth the cost based on the results achieved.

BENEFITS OF HIRING A TAX ATTORNEY IN BEVERLY HILLS

Most discerning people choose to hire a Beverly Hills Tax Attorney because of their unique and desirable experience and acumen.While there are some likely competitors on the market such as tax relief companies and the like, there’s just something about the superior results realized by Beverly Hills Tax Attorneys that can’t be duplicated. It is that difference that keeps people choosing, and hiring Beverly Hills Tax Attorneys , even though other options are less expensive. Despite the likely higher costs, Beverly Hills Tax Attorneys are well worth it in the end.

After  realizing the fruits of hiring a Beverly Hills Tax Attorney , these strategies can outlast most other results gained elsewhere by other means and pay for themselves in the long run; some attorney/client relationships, as well as the benefits of their sound advice can literally last a lifetime, or even longer with a good  Estate Plan J The superior results gained by Beverly Hills Tax Attorneys can also add value to your overall financial picture, as your budget will likely be freed up of unnecessary tax burdens . While no tax liability goes unnoticed when assessing your overall asset value, some choices have a better return than others. While CPA firms and tax relief companies are extremely practical, less costly and useful in many ways, you won’t see the same kind of return after hiring them.

BEVERLY HILLS TAX ATTORNEY FOR LIFE

Despite some minor drawback like cost, hiring a Beverly Hills Tax Attorney is, to many, well worth the investment. It will add benefit to your tax plan that no other tax practitioner  can quite compete with, be it, a tax relief company, CPA firm. Take great heed and care of your tax  plan and it will take care of you for a lifetime.

Strategic Tax Lawyers, LLP is a law firm proudly serving clients nationwide, throughout California, including Beverly Hills.



Companies Push for Tax Breaks on Offshore Cash

Wednesday, August 31, 2011

New York Times article Some of the nation’s largest corporations have amassed vast profits outside the country and are pressing Congress and the Obama administration for a tax break to bring the money home.

Apple has $12 billion waiting offshore, Google has $17 billion and Microsoft, $29 billion.

Under the proposal, known as a repatriation holiday, the federal income tax owed on such profits returned to the United States would fall to 5.25 percent for one year, from 35 percent. In the short term, the measure could generate tens of billions in tax revenues as companies transfer money that would otherwise remain abroad, and it could help ease the huge budget deficit.

Corporations and their lobbyists say the tax break could resuscitate the gasping recovery by inducing multinational corporations to inject $1 trillion or more into the economy, and they promoted the proposal as “the next stimulus” at a conference last Wednesday in Washington.

“For every billion dollars that we invest, that creates 15,000 to 20,000 jobs either directly or indirectly,” Jim Rogers, the chief of Duke Energy, said at the conference. Duke has $1.3 billion in profits overseas.

But that’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage.

Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study of the Nonpartisan National Bureau of Economic Research.

This money comes from overseas operations and in some cases accounting maneuvers that shift domestic profits to low-tax countries. The study concluded that the program “did not increase domestic investment, employment or research and development.”

Indeed, 60 percent of the benefits went to just 15 of the largest United States multinational companies — many of which laid off domestic workers, closed plants and shifted even more of their profits and resources abroad in hopes of cashing in on the next repatriation holiday.



Tax Tips for Newlyweds

Tuesday, August 30, 2011

No California tax lawyer would expect you to worry about your tax status on your wedding day, but it would help to remember that along with the changes in your marital status, marriage could also affect your tax returns. The Internal Revenue Service has tax advice for newlyweds to ensure that your tax matters are processed smoothly even after your nuptials. Not all married women change their name after the wedding, but if you do, you will be required to notify the Social Security Administration. Contact your local Social Security Administration office about the change in name, so it will match with your number on your next income tax return.

You also need to inform the IRS about any change of address. Also inform the U.S. Postal Service about your change of address, so it can forward you any tax-related correspondence.

Inform your employer about any name and address change.

In the case of a working couple, a marriage may take the couple’s combined income into a different tax bracket. In such cases, it's important to calculate the amount of withholding for a new tax status. You can calculate this withholding by using the IRS Withholding Calculator available on the agency’s website, or speak to a California tax lawyer or CPA. Marriage can also affect your tax deductions. If you are newly married, you may find that you’re now eligible for more tax deductions.

Often, individuals benefit from filing taxes jointly as a couple. However, this may not always be the case. For purposes of tax returns, the Internal Revenue Service considers a person's marital status as of December 31. Therefore, choosing whether to file taxes jointly or separately well in advance can help you determine the best way to save tax.



OVDI DEADLINE EXTENDED TO SEPT. 9, 2011

Tuesday, August 30, 2011

 

SAVED BY THE STORM The IRS has extended the deadline for offshore voluntary disclosure initiative requests until Sept. 9, 2011, because of the potential impact of Hurricane Irene on taxpayers. The IRS had previously given taxpayers until Aug. 31 to present their requests to the IRS.

More information on the OVDI is available in IRS News Release 2011-84 on the IRS.gov website, the OVDI program details. and much more related information can be found there.

The 2011 OVDI was announced on Feb. 8, 2011, and follows the 2009 Offshore Disclosure Program (OVDP). The 2011 initiative offers clear benefits to encourage taxpayers to come forward rather than risk detection by the IRS. Taxpayers hiding assets offshore who do not come forward will face far higher penalties along with potential criminal charges.

 
 


US rejects Indian-Americans' plea on OVDI

Monday, August 29, 2011
WASHINGTON: The US Treasury Department has turned down the Indian-American community's plea to extend the deadline for disclosing offshore accounts from Aug 31 to Dec 31 and reduction in penalties for non-disclosure. 

"At this time, we do not contemplate granting an across-the-board deadline extension for all taxpayers," the department said in response to a letter to US Treasury Secretary Timothy Geithner by Global Organization of People of Indian Origin(GOPIO) in June. 

Turning down GOPIO's plea for the reduction in penalties, it said the 2011 Offshore Voluntary Disclosure Initiative (OVDI) "provides a way for taxpayers with undeclared assets offshore to resolve their tax problems." 

Referring to GOPIO's complaint that the OVDI has not been publicised in ethnic newspapers and other community media in multiple languages, the Department said it had promoted OVDI awareness by posting information about the OVDI in eight foreign languages, including Hindi, on IRS.GOV. 

"We have also released information through traditional media, both national and local, as well as social media websites such as Twitter. We will continue this extensive outreach effort as the August 31, 2011, deadline nears," it said. 

The Indian community groups, however, have decided to keep up their efforts for reconsideration by the Treasury and relief as requested in a July 19 letter submitted to President Barack Obama, GOPIO said. 

Four organizations spearheading the move are GOPIO, National Federation of Indian American Associations (NFIA), American Association of Physicians of Indian Origin (AAPI) and Asian American Hotel Owners Association (AAHOA).


Swiss Accounts: End of the Ride?

Tuesday, August 23, 2011

A recent article from  The Wall Street Journal suggests more secret offshore bank accounts are likely to come to light in the next days and weeks.

A wave of people with undeclared accounts has emerged before an Aug. 31 deadline to enter a special amnesty program at the Internal Revenue Service. Many watched and waited in the wings as thousands came forward in 2009 under an earlier penalty deal. The IRS has cracked down hard on the use of secret accounts in Switzerland and elsewhere to evade taxes.

Robert E. McKenzie, an attorney in the Chicago firm Arnstein & Lehr LLP, said he fielded seven calls on Tuesday from taxpayers asking about the IRS program. One was an American citizen who has lived and worked abroad for 20 years without filing U.S. tax returns or an IRS foreign account form. Several others were Indian immigrants here on H-1 visas, and another was an Iranian immigrant.

The bottom line, according to McKenzie and other advisers: the IRS publicity campaign is reaching a lot of people who have not been following the rules. This week, the agency reminded taxpayers of the Aug. 31 deadline. 

U.S. government activity in recent days is partly behind the new surge of worry by people who, after all, stayed unnerved until now, according to Scott Michel, a partner at law firm Caplin & Drysdale in Washington, D.C. The Justice Department last month told Credit Suisse (CS) it was investigating its cross-border private banking services to U.S. clients. It also indicted several Swiss senior private bankers for helping hide money in Swiss banks. And, federal prosecutors indicted two independent financial advisers on similar charges. 

Credit Suisse said last month is it responding to requests for information by the Justice Department. It had no further comment for this article. 

The IRS didn’t immediately comment.