IRS’s Small Business/Self-Employed Division has issued guidance to its employees regarding what collection activity information can and cannot be disclosed with respect to a couple’s joint return, where the couple has subsequently divorced or are separated and no longer reside in the same household. (IRS Memo SBSE-05-0419-0010; Interim Guidance on Disclosure of Collection Activities on Joint Returns for Divorced or Separated Spouses) Background. If any tax deficiency with respect to a joint return is assessed, the couple are no longer married or no longer reside in the same household, and either joint filer makes a request in writing, IRS must disclose in writing to the individual making the request whether it has tried to collect the deficiency from the other filer, the general nature of those collection activities, and the amount collected. (Code Sec. 6103(e)(8)) IRS guidance to its employees . Upon receipt of either a verbal or written request from a taxpayer or his authorized representative, IRS may disclose limited information related to the collection of the tax from the other individual with whom the taxpayer filed a joint return when the taxpayer and the other individual are no longer married or are separated and no longer reside in … Read More
Determining the taxpayer’s tax home is a question we respond to regularly on the NSTP Tax Helpline and in our tax seminars. In a new case, Brown, TC Memo 2019-30, 4/8/19, the taxpayer claimed he was working away from his home on a temporary assignment, but the Tax Court denied the deduction. For tax purposes, your home is usually the general vicinity of your principal place of employment, not your personal residence. If you don’t have a permanent place of business (e.g., you work from multiple locations for various clients), your permanent residence may be treated as your tax home. Thus, if you are temporarily working at several different locations, you may be able to deduct travel expenses between your residence and those job sites. In the new case, a taxpayer, who permanently resides in a suburb of Atlanta, Georgia, worked as a business consultant for numerous clients for his concierge CFO business. Many of the taxpayer’s clients required him to be on their business premises when they used his services. In 2012, the taxpayer entered into a three-year contract with a firm in New Jersey. He was required to work at the New Jersey location for four days a … Read More
my Social Security Account my Social Security is a secure portal that gives you immediate access to important information and tools that allow you to verify and manage your benefits. With your free, personal my Social Security account, you can receive personalized estimates of future benefits based on your real earnings, see your latest Statement, and review your earnings history. It even makes it easy to request a replacement Social Security Card or check the status of an application, from anywhere! If you are receiving benefits or have Medicare, you can also: Review Social Security and Medicare benefit details Get a Benefit Verification Letter Change your address and telephone number Start or change direct deposit of your benefit payment Review or print your Social Security Earnings Record and contact Social Security about errors Request a replacement Medicare card View and print your SSA-1099 Access to online services is being expanded all the time, so check back often to see new choices being offered.
The IRS issued Revenue Ruling 2019-09, which suspends the two 1957 revenue rulings until a study is completed on the active conduct of a trade or business requirement under sections 355(a)(1)(C) and (b)) of the tax code. In one of the old revenue rulings, Rev. Rul. 57-464, the IRS considered the section 355 qualification of a company’s separation of a manufacturing business from a group of real estate assets that included an old factory building used for storage, along with four other buildings. One of them was a duplex apartment building that had been rented to some of the corporation’s own employees. Another was a small office building rented to a single tenant. The other two were houses, one of which was occupied by a sister-in-law of the corporation’s president. The use of the old factory building for storage “was not in itself the active operation of a business as defined in the regulations,” according to the old revenue ruling, and the rental activities “produced only a nominal rental.” There was “negligible” net income, and the properties “were acquired either as an investment or as a convenience to employees of the manufacturing business.” Back in 1957, the IRS said the … Read More
California FTB Announces System Error: Unverified Wage Withholding – Possible Changes to Tax Returns For those of you in California, or who file California taxes, this news flash was issued April 16 by the State of CA Franchise Tax Board: “During the period from March 8, 2019 to March 11, 2019, a system error caused us to issue refunds to approximately 23,500 taxpayers without first verifying the claimed wage withholding. This may have led to the taxpayer’s withholding being increased or decreased incorrectly. Additionally, the taxpayer may have received a Notice of Tax Return Change with an incorrect explanation of the adjustment. “In order to correct this error, in the coming weeks we are going to review each potentially impacted account and ensure that the proper amount of withholding is applied. This may result in a change to the refund that the taxpayer received. If they did not receive a refund, either an accurate bill will be mailed to them, or they will receive the refund that they are due. “We will be contacting affected taxpayers directly beginning the week of April 22nd. At that time, we will request additional information, if needed. Please accept our apology for any inconvenience … Read More
What’s New for Farmers? Tax rates: Income averaging Tax rates have changed, and taxpayers may want to consider whether filing a Form 1040, Schedule J, Income Averaging for Farmers and Fishermen, is right for them. They may use Form 1040, Schedule J, to average all or some of the farm income by using income tax rates from the three prior years (“base years”). This may lower the tax if current year farm income is high and taxable income from one or more of the base years was low. Methods of accounting and capitalization: Overall method of accounting – cash or accrual For tax years beginning on or before December 31, 2017, the tax law prohibited certain farming C corporations, certain farm partnerships with a C corporation partner and all tax shelters from using the cash method of accounting. As a result of the TCJA, for tax years beginning after December 31, 2017, any farmer may use the cash method of accounting if the farmer: 1) meets the gross receipts test (discussed later); and 2) is not a tax shelter. (See Inventory below.) A farming business making a change to its overall method of accounting should file a Form 3115, Application … Read More