Monday, October 14, 2019

PTIN Fees are Legal

The Supreme Court has declined to listen to the PTIN case, therefore the Court of Appeals decision stands.  Here is a brief summary of the case.

A few tax return preparers took IRS to court claiming it did not have the right to charge a fee for issuing PTINs.  On June 1, 2017, the tax preparers won in the District of Columbia District Court.  On July 10, 2017, the District Court ordered IRS to permanently enjoin from charging PTIN fees and provide every class member a full refund of all PTIN fees paid from September 1, 2010, to the present.  The case went to the Court of Appeals.

The Court of Appeals ruled against the tax return preparers denying the arguments presented and vacated the District Court decision.  The case was remanded back to District Court for further proceedings, including an assessment of whether the amount of the PTIN fee was unreasonable and exceeded the costs to IRS to issue and maintain PTINs.

We have not heard if the District Court made a determination of the reasonableness of the fee amount.

Side note – The renewal period for PTINs for the upcoming tax season will open October 16.  This year IRS is not charging a fee for the PTIN renewal.

Montrois, et al. v U.S.

This text has been shared courtesy of:  David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (920-496-9111).

Tuesday, October 8, 2019

Massachusetts / Rhode Island NATP Chapter Annual Meeting & Educational Seminar October 22nd 2019 - 2 Weeks Away!!

Massachusetts / Rhode Island NATP Chapter Annual Meeting & Educational Seminar October 22nd 2019





Join the Massachusetts / Rhode Island NATP Chapter on Tuesday, October 22nd, 2019 for our Annual Meeting & Educational Seminar. This all day event will be held at the Holiday Inn in Mansfield, MA. We have negotiated a room rate of $119 if you would like to stay at the hotel. Please book this by October 11th and mention that you are with NATP. Registration details are below, and is handled online by National. Take a look at the details on our speaker and topics provided in this great Continuing Education  opportunity including continental breakfast, snacks, lunch, vendors and great networking opportunities. This seminar is limited to the First 100 Registrants!


  • For online registration with credit card, click here.
  • To register by phone, fax or mail, click for the registration form.
  • After October 21st, please print the form (see link above) and register at the door.

Registration 7:00 am to 7:45 am (Continental Breakfast Included)
Education 7:45 am to 5:00 pm
Annual Meeting Prior to Lunch (Lunch Included)

CE Credits -
8 Federal Tax Law Topics


Speaker - Kathryn Morgan, EA, NTPI Fellow


Topics:

Tax Research Tips

Residential Rentals

Working From Home

Taxes in Divorce


Kathy just completed her 24th year with H&R Block working in the Bossier City Premium office. Her prior careers as a USAF military police officer and as a police communications officer for the Bossier City Police give her a wide variety of experience that translate into tax issues. She proudly holds the titles of Enrolled Agent, Fellow NTPI, Instructor, and Representation Specialist.

She has been published by several tax research companies, including Parker Tax Publishing and TaxConnections.com. She is a accomplished speaker and instructor on a wide variety of tax issues. Through her company, Puzzled By Taxes?, she offers speaking, writing, and instruction.

Kathy lives and practices in the Shreveport Louisiana area and when not "talking tax" she enjoys spending time with her grandchildren and family, writing and reading.

Monday, September 30, 2019

Rhode Island Tax Changes Take Effect Tomorrow, October 1

Feminine hygiene products, urns, specified digital products, and E-911 charges are affected

PROVIDENCE, R.I. – Starting tomorrow, October 1, Rhode Island’s 7% sales and use tax will no longer apply to feminine hygiene products and urns.

Also starting tomorrow, the sales and use tax will be extended to e-books, streaming video, music downloads, and other “specified digital products”.

Furthermore, the monthly E-911 surcharge that applies to residential and business phone lines, as well as to cell phones, will be split into two separate charges – one as the emergency services surcharge, the other as the first response surcharge.

The changes are the result of legislation approved by the Rhode Island General Assembly and signed into law by Rhode Island Governor Gina M. Raimondo on July 5, 2019.1 Following is a summary.

Tampons and other feminine hygiene products

According to the new law, the “feminine hygiene products” category includes tampons, panty
liners, menstrual cups, sanitary napkins, and “other similar products the principal use of which is
feminine hygiene in connection with the menstrual cycle”. They will be exempt from Rhode
Island’s sales and use tax effective October 1, 2019.

Urns

The new law exempts – from Rhode Island’s sales and use tax – the sale, storage, use, or other consumption in Rhode Island of urns that are ordinarily sold by a funeral director as part of the
business of funeral directing. Urns will be exempt beginning October 1, 2019.

Already exempt are coffins and caskets, as well as shrouds and other burial garments that are
ordinarily sold by a funeral director as part of the business of funeral directing.

Digital movies, music, books

“Specified digital products” are subject to Rhode Island sales and use tax effective October 1,
2019. The term “specified digital products” includes digital movies, digital TV shows, digital books,
digital music, and related items that are streamed or downloaded to computers, phones, or other
devices. The term also includes subscriptions to streaming audio and streaming visual products
– such as films, shows, and music that are streamed or downloaded to computers, phones, or
other devices.

Technically, the term “specified digital products” refers to electronically transferred:

  • “Digital audio-visual works” – which means a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any;
  • “Digital audio works” – which means works that result from the fixation of a series of musical, spoken, or other sounds, including ringtones; and
  • “Digital books” – which means works that are generally recognized in the ordinary and usual sense as “books”.

For purposes of the definition of “digital audio works”, “ringtones” means digitized sound files that
are downloaded onto a device and that may be used to alert the customer with respect to a
communication.

The new law makes it clear that specified digital products sold by or through remote sellers,
marketplace facilitators, and referrers are also subject to Rhode Island sales and use tax.
Furthermore, every retailer -- including those with no physical presence in Rhode Island -- that
sells specified digital products for storage, use, or other consumption in Rhode Island must
register with the Rhode Island Division of Taxation. For more details, click here.

E-911 surcharge

The monthly E-911 surcharge on residence and business phone lines will be split into two
separate charges – one as the emergency services surcharge, the other as the first response
surcharge – effective October 1, 2019. The same principle will apply to the E-911 surcharge on
wireless, cellular, and other such devices. For more details about the E-911 surcharge, click here.

For more information

For more information about the tax changes that take effect October 1, 2019, call the Division’s
Excise & Estate Tax unit at (401) 574-8955 (the line is typically staffed from 8:30 a.m. to 3:30 p.m.
Eastern Time business days), or email: Tax.Excise@tax.ri.gov.


Friday, September 20, 2019

Massachusetts / Rhode Island NATP Chapter Annual Meeting & Educational Seminar October 22nd 2019 - 1 Month Away!!

Massachusetts / Rhode Island NATP Chapter Annual Meeting & Educational Seminar October 22nd 2019





Join the Massachusetts / Rhode Island NATP Chapter on Tuesday, October 22nd, 2019 for our Annual Meeting & Educational Seminar. This all day event will be held at the Holiday Inn in Mansfield, MA. We have negotiated a room rate of $119 if you would like to stay at the hotel. Please book this by October 11th and mention that you are with NATP. Registration details are below, and is handled online by National. Take a look at the details on our speaker and topics provided in this great Continuing Education  opportunity including continental breakfast, snacks, lunch, vendors and great networking opportunities. This seminar is limited to the First 100 Registrants!


  • For online registration with credit card, click here.
  • To register by phone, fax or mail, click for the registration form.
  • After October 21st, please print the form (see link above) and register at the door.

Registration 7:00 am to 7:45 am (Continental Breakfast Included)
Education 7:45 am to 5:00 pm
Annual Meeting Prior to Lunch (Lunch Included)

CE Credits -
8 Federal Tax Law Topics


Speaker - Kathryn Morgan, EA, NTPI Fellow


Topics:

Tax Research Tips

Residential Rentals

Working From Home

Taxes in Divorce


Kathy just completed her 24th year with H&R Block working in the Bossier City Premium office. Her prior careers as a USAF military police officer and as a police communications officer for the Bossier City Police give her a wide variety of experience that translate into tax issues. She proudly holds the titles of Enrolled Agent, Fellow NTPI, Instructor, and Representation Specialist.

She has been published by several tax research companies, including Parker Tax Publishing and TaxConnections.com. She is a accomplished speaker and instructor on a wide variety of tax issues. Through her company, Puzzled By Taxes?, she offers speaking, writing, and instruction.

Kathy lives and practices in the Shreveport Louisiana area and when not "talking tax" she enjoys spending time with her grandchildren and family, writing and reading.

Wednesday, September 18, 2019

Does Your State Have a Marriage Penalty?

Janelle Cammenga, Policy Analyst
Tax Foundation
Today’s map zeroes in on states that have a “marriage penalty” in their individual income tax brackets.

Under a progressive, graduated-rate income tax system, tax rates increase as a taxpayer’s marginal income increases. A marriage penalty exists when a state’s income brackets for married taxpayers filing jointly are less than double the bracket widths that apply to single filers. In other words, married couples who file jointly under this scenario face a higher effective tax rate than they would if they filed as two single individuals with the same amount of combined income.

This non-neutral tax treatment is particularly harmful to owners of pass-through businesses, who pay taxes on their business income under the individual income tax system. Under a marriage penalty, married business owners are subject to higher effective tax rates on their business income than they would be otherwise.

Fifteen states (displayed in pink on the map below) have a marriage penalty built into their bracket structure. Seven additional states (Arkansas, Delaware, Iowa, Mississippi, Missouri, Montana, and West Virginia), as well as the District of Columbia, offset the marriage penalty in their bracket structure by allowing married taxpayers to file separately on the same return to avoid losing credits and exemptions. Ten states have a graduated-rate income tax but double their brackets to avoid a marriage penalty: Alabama, Arizona, Connecticut, Hawaii, Idaho, Kansas, Louisiana, Maine, Nebraska, and Oregon.

The ability to file separately on the same return is important in states that do not double bracket widths, as is the ability to do so even if the couple files jointly for federal purposes. While married couples have the option of filing separately—though some states only allow this if they do so on their federal forms as well—this normally creates a disadvantage, because it either disallows or reduces the value of deductions and credits available to the family jointly, which is also a form of marriage penalty. Filing separately on the same return eliminates this problem, though at the cost of slightly greater complexity than the obvious, simple solution of doubling tax brackets for joint filers so that there is no penalty for filing jointly.