IRS Updates

Below are summaries and links to the most recent headliners and news releases your members might be interested in. The title and summary are designed to give you a brief overview of the article's content -- the link to the full article is at the end of each summary. I encourage you to use any or all of these in newsletters or emails to your members, or on your web site.

Announcements & Upcoming Events:

Cash for Clunkers: Better Business Bureau Says Know the Facts First

Consumers are curious about the new government program that allows some old gas guzzlers to be traded in for a credit on a new fuel-efficient vehicle. Beware some information circulating is from con artists. The real program is called the Car Allowance Rebate System (CARS). However, fraudsters are using catchy names and trying to lure consumers into identity theft schemes. Scams ask for personal information, like Social Security numbers to get a "voucher" or a name added to an application list—these don’t exist. Get accurate information about CARS and find out if your vehicle qualifies from the U.S. Department of Transportation at www.cars.gov or 866-227-7891.

IRS Updates & News Releases:

First Time Homebuyer Credit: Reminders & News From HUD

The Recovery Act extends the credit for purchases closing before December 1, 2009. For purchases in 2009 the credit amount increases to $8,000 and the credit does not have to be repaid provided the taxpayer resides in the home for three years. Full article here: http://www.irs.gov/newsroom/article/0,,id=204671,00.html

Also see First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2009. The following question has come up frequently:
Q. I am in the process of buying a home. I expect to close the deal before December 1, 2009. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment.

A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit. IRS news release 2009-27, First-Time Homebuyers Have Several Options to Maximize New Tax Credit, contains details for filing options if the home is purchased after April 15, 2009.

NOTE: HUD recently announced details on new FHA rules allowing state Housing Finance Agencies and certain non-profits to 'monetize’ up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

See the HUD news release here: http://portal.hud.gov/portal/page?_pageid=153,8026931&_dad=portal&_schema=PORTAL

To read the FHA's new mortgagee letter, visit HUD's website.

National Taxpayer Advocate Submits Mid-Year Report to Congress; Identifies Priority Challenges and Issues for Upcoming Year
http://www.irs.gov/newsroom/article/0,,id=210386,00.html

National Taxpayer Advocate Nina E. Olson today delivered a report to Congress that identifies the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year. Among the key areas of focus will be working with the IRS to improve taxpayer services, enhancing IRS oversight of federal tax return preparers, improving the accessibility of the offer in compromise program, and working with the IRS to improve its ability to administer refundable tax credits effectively.

Summertime Tax Tips Available on IRS.gov and Via E-Mail
http://www.irs.gov/newsroom/article/0,,id=210531,00.html

The Internal Revenue Service is publishing summertime tax tips to provide useful and concise advice on topics that affect taxpayers. Many people don’t think about their taxes until the start of the filing season in January. That can be a mistake. Steps such as checking your withholding, getting the proper receipts from charities, organizing all the records you will need or setting a personal tax strategy that can save money at tax time are most effective if they are done well before year’s end. The IRS is publishing three tax tips per week this summer. Topics range from how parents can get credit for sending their kids to day camp to protecting yourself from identity theft. Now you can receive IRS Tax Tips via

e-mail as soon as they are published by signing up through the IRS e-news subscription page, e-News Subscriptions. When subscribing, a confirmation message will be sent via e-mail. Verification must be sent in response in order to confirm a subscription.

Information on E-Business and E-Commerce

http://www.irs.gov/businesses/small/industries/article/0,,id=208385,00.html

A new tax center on IRS.gov provides a centralized source for E-Business and E-Commerce related issues.

IRS Provides Tips for Proper Employment Tax Treatment of Part-Time or Seasonal Workers

http://www.irs.gov/businesses/small/article/0,,id=209570,00.html

For many businesses, summer traditionally brings an influx of part time or seasonal workers into the work force. Employers must ensure they are treating these workers properly for employment tax purposes. Generally, workers are either employees or independent contractors, based upon the facts and circumstances of the relationship between the business and the worker.

For federal income tax withholding, Social Security, Medicare, and federal unemployment tax purposes, neither the number of hours worked nor amount earned alone determines the status of an individual as independent contractor or employee. For example, an individual can be an employee even though the individual works one hour a week or one day a year. Furthermore, businesses must remember that part-time or seasonal workers who are employees are subject to the same tax withholding rules that apply to other employees.

More information about treating these workers properly is on the Part Time or Seasonal Help Web page on IRS.gov. The page contains helpful tips for filing Form 941, Employer’s Quarterly Federal Tax Return, other information about seasonal/part-time workers and links to other resources to help businesses with employees.

Audit Technique Guides

http://www.irs.gov/businesses/small/article/0,,id=108149,00.html

Ever wondered what an IRS examiner would look at on your business tax return? The Audit Techniques Guides (ATGs) focus on developing highly trained examiners for a particular market segment. These Guides contain examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations. Browse the guide for your industry.


IRS Updates Below are summaries and links to the most recent headliners and news releases your members might be interested in. The title and summary are designed to give you a brief overview of the article's content -- the link to the full article is at the end of each summary. I encourage you to use any or all of these in newsletters or emails to your members, or on your web site. Announcements & Upcoming Events: Cash for Clunkers: Better Business Bureau Says Know the Facts First Consumers are curious about the new government program that allows some old gas guzzlers to be traded in for a credit on a new fuel-efficient vehicle. Beware some information circulating is from con artists. The real program is called the Car Allowance Rebate System (CARS). However, fraudsters are using catchy names and trying to lure consumers into identity theft schemes. Scams ask for personal information, like Social Security numbers to get a "voucher" or a name added to an application list—these don’t exist. Get accurate information about CARS and find out if your vehicle qualifies from the U.S. Department of Transportation at www.cars.gov or 866-227-7891. IRS Updates & News Releases: First Time Homebuyer Credit: Reminders & News From HUD The Recovery Act extends the credit for purchases closing before December 1, 2009. For purchases in 2009 the credit amount increases to $8,000 and the credit does not have to be repaid provided the taxpayer resides in the home for three years. Full article here: http://www.irs.gov/newsroom/article/0,,id=204671,00.html Also see First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2009. The following question has come up frequently: Q. I am in the process of buying a home. I expect to close the deal before December 1, 2009. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment. A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit. IRS news release 2009-27, First-Time Homebuyers Have Several Options to Maximize New Tax Credit, contains details for filing options if the home is purchased after April 15, 2009. NOTE: HUD recently announced details on new FHA rules allowing state Housing Finance Agencies and certain non-profits to 'monetize’ up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. See the HUD news release here: http://portal.hud.gov/portal/page?_pageid=153,8026931&_dad=portal&_schema=PORTAL To read the FHA's new mortgagee letter, visit HUD's website. National Taxpayer Advocate Submits Mid-Year Report to Congress; Identifies Priority Challenges and Issues for Upcoming Year http://www.irs.gov/newsroom/article/0,,id=210386,00.html National Taxpayer Advocate Nina E. Olson today delivered a report to Congress that identifies the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year. Among the key areas of focus will be working with the IRS to improve taxpayer services, enhancing IRS oversight of federal tax return preparers, improving the accessibility of the offer in compromise program, and working with the IRS to improve its ability to administer refundable tax credits effectively. Summertime Tax Tips Available on IRS.gov and Via E-Mail http://www.irs.gov/newsroom/article/0,,id=210531,00.html The Internal Revenue Service is publishing summertime tax tips to provide useful and concise advice on topics that affect taxpayers. Many people don’t think about their taxes until the start of the filing season in January. That can be a mistake. Steps such as checking your withholding, getting the proper receipts from charities, organizing all the records you will need or setting a personal tax strategy that can save money at tax time are most effective if they are done well before year’s end. The IRS is publishing three tax tips per week this summer. Topics range from how parents can get credit for sending their kids to day camp to protecting yourself from identity theft. Now you can receive IRS Tax Tips via e-mail as soon as they are published by signing up through the IRS e-news subscription page, e-News Subscriptions. When subscribing, a confirmation message will be sent via e-mail. Verification must be sent in response in order to confirm a subscription. Information on E-Business and E-Commerce http://www.irs.gov/businesses/small/industries/article/0,,id=208385,00.html A new tax center on IRS.gov provides a centralized source for E-Business and E-Commerce related issues. IRS Provides Tips for Proper Employment Tax Treatment of Part-Time or Seasonal Workers http://www.irs.gov/businesses/small/article/0,,id=209570,00.html For many businesses, summer traditionally brings an influx of part time or seasonal workers into the work force. Employers must ensure they are treating these workers properly for employment tax purposes. Generally, workers are either employees or independent contractors, based upon the facts and circumstances of the relationship between the business and the worker. For federal income tax withholding, Social Security, Medicare, and federal unemployment tax purposes, neither the number of hours worked nor amount earned alone determines the status of an individual as independent contractor or employee. For example, an individual can be an employee even though the individual works one hour a week or one day a year. Furthermore, businesses must remember that part-time or seasonal workers who are employees are subject to the same tax withholding rules that apply to other employees. More information about treating these workers properly is on the Part Time or Seasonal Help Web page on IRS.gov. The page contains helpful tips for filing Form 941, Employer’s Quarterly Federal Tax Return, other information about seasonal/part-time workers and links to other resources to help businesses with employees. Audit Technique Guides http://www.irs.gov/businesses/small/article/0,,id=108149,00.html Ever wondered what an IRS examiner would look at on your business tax return? The Audit Techniques Guides (ATGs) focus on developing highly trained examiners for a particular market segment. These Guides contain examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations. Browse the guide for your industry. Recently updated guides: Child Care Provider Audit Technique Guide Minister Audit Technique Guide IRS Electronic Advisory Committee Delivers Report to Congress http://www.irs.gov/newsroom/article/0,,id=209985,00.html The Electronic Tax Administration Advisory Committee (ETAAC) presented its 2009 Annual Report to Congress. The ETAAC provides feedback on the development and implementation of the Internal Revenue Service’s electronic tax administration strategy. The report includes 10 recommendations to advance the use of electronic filing. For example, the report recommends the IRS require all tax preparers who file at least 200 returns a year to use e-file. The report also calls for continued modernization of IRS systems as well as collaboration between the IRS and industry regarding software standards. Recent Articles from e-News for Small Businesses New small business video and audio presentations The latest additions on the IRS.gov small business audio/video page include May’s national phone forum on proper worker classification and a three-part series on correspondence examinations. Disaster webinar online The IRS Disaster and Emergency Relief webinar is now available on IRS.gov. Revenue Procedure 2009-33 provides guidance regarding the ability of corporations to elect not to claim the 50-percent depreciation deduction for certain extension property placed in service before Jan. 1, 2010, and instead increase their business credit limitation and AMT credit limitation. It will be published in IRB 2009-29 dated July 20, 2009. Updated information for S Corporations The IRS.gov S Corporation page includes updated information on: Compensation and medical insurance issues Employees, shareholders and corporate officers S Corporation stock and debt basis Due date approaching for many Form 2290 filers Individuals and organizations reporting 25 or more vehicles on Form 2290, Heavy Highway Vehicle Use Tax Return, are required to file electronically. Related links: Headliner Volume 268, IRS Reminds Certain Excise Taxpayers to e-file Form 2290 Approved software providers for Form 2290 e-file Subscribe to e-News for Small Businesses If you would like to receive e-News for Small Businesses, please visit this link to subscribe: http://www.irs.gov/businesses/small/content/0,,id=154826,00.html Recommend e-News for Small Businesses If you already receive e-News for Small Businesses, you can share it with a business acquaintance, colleague or employee. Just forward this link to them to view a sample edition and subscribe.
Chamber Happenings - July 30, 2009