RI Division of Taxation Quarterly Newsletter Now Available

The latest issue of the Rhode Island Division of Taxation's quarterly newsletter is now available. Highlights include:

• What's new for filing season
• Corporate tax changes for 2015
  
• Estate tax changes for 2015
• A FUTA tax update
• A lookup table for use tax
• Section 179 deduction limits
• TDI and UI figures for 2015
• Form RI-1065 preparation tips.

The issue also has regular features, including “Legal Corner” and “Practitioners’ Corner.” To view the latest issue, please use the following link:

http://go.usa.gov/JzFx

PTIN Letters to Tax Pros

The IRS began sending expiration notices to PTIN holders who have not yet renewed their PTIN for 2015. If you received a notice, you can still renew your PTIN online at any time. Until you renew, your PTIN status is expired. Also, the IRS recently sent notices through the PTIN system to a handful of PTIN holders identified to have invalid addresses. They are asking them to log into their account, review and update the information.

To date, approximately 635,000 tax return preparers have valid PTINs for tax year 2015.

e-help Desk Service Change

Because of budget restrictions, the IRS e-help Desk is discontinuing extended weekday hours, Saturday hours and President’s Day service. The e-help Desk assists tax professionals with non-account related questions and issues concerning electronic products such as e-Services and electronic filing. The e-help desk page lists the current hours of service.

IRS Services Cut Again

IRS again is experiencing budget cuts this year, $346 million this fiscal year.  This is also the first year of many of the ObamaCare tax return provisions including the penalty for not having insurance and the reconciliation of the Premium Tax Credit.  This means IRS is expected to do more with less money.

As a result of having to shift resources IRS Commissioner John Koskinen has announced the following:
1) Fewer audit and collection cases.  Reduced staffing in enforcement will result in at least 46,000 fewer individual and business audit closures and more than 280,000 fewer Automated Collection System and Field Collection case closures.

2) Hiring freeze.  Lose about 1,800 enforcement personnel through attrition.  The result of these two items is expected to cost the government at least $2 billion in revenue that would have been collected.

In National Taxpayer Advocate Nina Olson’s annual report she said IRS expectations include:
1) IRS is unlikely to answer even half of the telephone calls it receives.

2) Taxpayers who manage to get through are expected to wait on hold for 30 minutes on average and considerably longer at peak times.

3) IRS will answer far fewer tax-law questions than in past years.  During the upcoming filing season, it will not answer any tax-law questions except “basic” ones.  After the filing season, it will not answer any tax-law questions at all, leaving the roughly 15 million taxpayers who file later in the year unable to get answers to their questions by calling or visiting IRS offices.

4) Tax return preparation assistance has been eliminated.

The above changes may be an opportunity or a headache for tax professionals.  With IRS doing less, taxpayers will be looking elsewhere for help.  They will be looking for free tax information.  This could be an opportunity for you to convert them to clients by helping them.  You also could refuse to take their calls and permanently turn them off from using your services if they ever felt the need.  This is a tricky situation for you as a tax professional and you will have to decide how to handle the extra calls that are bound to come in.

IRS e-help Desk is also decreasing its hours.  A posting on irs.gov on January 15, 2015, states the e-help desk will NOT be open extended hours, Saturdays, Martin Luther King Jr. Day (January 19, 2015) or President’s Day (February 16, 2015) this year.  The hours for the e-help desk are Monday-Friday 6:30 am – 6:00 pm, Central Time for the entire year.


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

Massachusetts Form 1099 Filing Requirement?

What’s New In MA.  Something which isn’t so new but it is news to Bill Delaney.  Read on…

Since tax year 2009, MA has required that copies of federal 1099 forms be transmitted to the state each year.  There is an electronic filing requirement for 50 or more forms.

What Bill did not know is that there is also a paper filing requirement for fewer than 50 forms.

How can this be (said Bill)?  There isn't a state transmittal form---where would you send them.

Well, it turns out that there is a transmittal form.  It is a copy of the federal form 1096, sent along with state copies of forms 1099 to:

Mass. Dept. of Revenue
PO Box 7045
Boston, MA 02204-7045

See DOR Filing Requirements for Form 1099 on the state web site.

Our thanks to NATP member Andy Decina of Framingham for this information.

Affordable Care Act Webinars presented by NATP

ACA On-Demand Package Helping you get ready for tax season.

The Affordable Care Act is once again a hot topic among tax professionals. Learn what you need to know with our ACA On-Demand Package comprised of four webinars covering all sections of ACA and how to apply them to your practice. These webinars will help you examine ACA from the perspective of employers and individuals with a focus on understanding the impact of the employer mandate and how your business clients can prepare for it. The package also includes a session on properly preparing the actual forms, checklists and examples of what to expect this tax season. Earn up to 6 CPE credits and get completely up to speed on ACA. The complete ACA On-Demand Package is $121 for members or $157 for nonmembers. Register

2014 Affordable Care Act Tax Provisions Presented by the IRS

2014 Affordable Care Act Tax Provisions

Date: Jan 22, 2015
Time: 10:00 AM - 12:00 PM (Pacific Time)
Fee: FREE

Hosted by: Stakeholder Liaison (IRS Stakeholder Liaison Western Area)

Join us to for this FREE two-hour webinar to learn about three key Affordable Care Act tax provisions that affect 2014 federal income tax returns:

• The Individual Shared Responsibility Provision (ISRP)
• The Premium Tax Credit (PTC)
• The Small Business Health Care Tax Credit (SBHCTC). 

PLEASE NOTE THE FOLLOWING WHEN COMPLETING YOUR REGISTRATION:

• Name – enter exactly as shown on your PTIN card (if applicable)
• Company Name – enter your PTIN number - You must enter “P” and all 8 numbers of your PTIN. CTEC preparers - enter your CTEC number after your PTIN number. Enter NA if you do not have a PTIN and/or CTEC number.

Earn up to 2 Continuing Education Credits - To receive a certificate of completion, you must view the presentation while signed in using the same email address that you used to register (you will not receive credit by watching on someone else’s computer). This will confirm your attendance and generate your certificate of completion. Groups may not register with one e-mail address and then receive separate certificates.

Register Here

IRS Form 941 Corrections for Retroactive Transit Pass Benefits

Briefly IRS is permitting employers to adjust the FICA wages reported on the 4th quarter Form 941 to account for previously taxed transit pass benefits that are now retroactively nontaxable.  This only applies to employers who have not yet filed their fourth quarter Form 941.

During the calendar year the amount of employer provided transit passes/reimbursements that were nontaxable were limited to $130 per month.  Any additional amounts were required to be included in the employee’s income subject to FICA withholding as well as income tax withholdings.  Due to a change in the law enacted December 19, 2014, this amount was increased to $250 retroactive to January 1, 2014.

Normally an employer would file a Form 94x to amend prior period Forms 941.  An employer would also normally be required to have a signed statement from the employee(s) stating they had filed and would not file in the future any claims with the government requesting a refund of the FICA taxes paid on this amount.

In Notice 2015-2 IRS is permitting employers to adjust the FICA wages shown on the fourth quarter Form 941 to account for the retroactive treatment.  The adjustment also requires the employer to reimburse the employees for the excess FICA taxes that were withheld from the employees’ paychecks related to this now nontaxable income.  This “employee reimbursement” must happen prior to the employer filing the fourth quarter Form 941.

If an employer has already filed the fourth quarter Form 941 OR has not reimbursed the employees for the excess FICA prior to filing the Form 941, then the employer is required to file a Form 94x under the normal procedures for amending Forms 941.

Naturally if the employer reimburses the employee the FICA taxes on this retroactive income, the employer should make sure the Forms W2 also show the corrected amounts in the FICA boxes 3-6 and use the correct taxable wages when completing the FUTA Form 940.

This Notice does not permit an employer to retroactively pay additional transit pass amounts.  It merely permits the employer the opportunity to change the status of previously paid amounts from taxable to nontaxable (up to the $120 differential).
  
This text has been shared with you courtesy of:  David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (920-496-9111).

MA DOR Feedback Request for Seminar Attendees

The MA DOR is looking for some input from the MA/RI NATP Chapter. If you want to weigh in on the attached documents, please read on. Contact info and attachments are below.

The two documents cover use tax  - one for business use and one for individual use.  It would be very helpful to have comments from the membership.  We heard from practitioners that they would like to have use tax handouts for their clients and we agree that is a good idea.

What we are looking for in the way of comments is:

• Are we addressing the most common issues and questions about use tax?  If not, what is missing?
• Is the material easily understandable – if not, what is not? 

   
The text of the documents will also replace the current use tax page on the website with the two pages – business use tax and individual use tax.   The PDF versions will be available from links on both new pages.

Note that these are intended to provide high level information so every possible situation is not covered. That being said, we want to make sure that the most common issues and questions about use tax are addressed.  

If it is possible to have comments back by next Friday, January 16th that would be great.
Please contact with any comments directly to Maryann Merigan, Communications Rep @ MA DOR. Her Office Phone is 617-626-4247, Cell Phone is 617-671-9639 or email at meriganm@dor.state.ma.us

Below are both documents.

The MA DOR thanks you very much for your time.

January State Update Seminar a Success

Last week, our Massachusetts/Rhode Island Chapter held the annual state update seminar at The Sturbridge Host Hotel in Sturbridge, MA. In front of 75+ attendees, representatives and speakers from the region captivated the audience with state and federal updates galore.

Novlette Earlington
CT DRS

Novlette Earlington, Revenue Examiner 2 from the Connecticut Department of Revenue Services was the first presenter of the morning. The highlights of Novlette's presentation covered Pension Income Taxation, CHET (CT Higher Education Trust), CT Fraud Division cracking down on EIC claims as well as the departments collections actions on individual use taxes. Follow the CT DOR at http://www.ct.gov/drs/.

Scott Lewis & Richard Coia of the Rhode Island Division of Taxation presented together with Scott handling the individual side and Richard tackling to corporate and business side of things. Highlights included
Corporation Combined Reporting, Depreciation Recoupling/Decoupling and Returns help up on processing with errors on the corp side. On the individual, Scott talked about the Division's Integrated Tax Systems, Property Tax Relief, E-File Mandates as well as Collection Actions on Individual Use Taxes...do you see a pattern here? Updates from RI can be found online at http://www.tax.ri.gov/.

Up next was the entourage from the Massachusetts Department of Revenue - Brian Lynch, William Lauziere & George Barressi. Highlights from MA include changes to Form 1, the Senior Circuit Breaker Credit, Genisys the New DOR Tax System, Reviews of the year's TIRs, Directives, Rulings and of course, the department's Collections Actions on Individual & Business Use Taxes. The latest news is that MA DOR Commissioner Amy Pitter is leaving the department at the end of January. No replacement has been named yet as of this summary. Follow the MA DOR at http://www.mass.gov/dor/.

Brian Lynch
MA DOR

Taking us to the end of the day was Kathryn Keane, EA from the New York NATP Chapter. Her first energetic presentation covered highlights happening in New York relative to Preparer Education
Requirements, Corporate Credits, "DSUE" and NYS Collection Enforcement. We were also fortunate enough for Kathryn to present 2 hours of Federal Tax Updates including (but not limited to) the Able Act of 2014, the Affordable Care Act and Ongoing Payments to Survivors & Victims of Terrorist Acts. The NY Department of Taxation can be found at http://www.tax.ny.gov/.

If you would like an updated copy of Kathryn's slide presentation, please let us know.

Kathryn Keane, EA
New York NATP

Quarterly Interest Rates Remain Same for 1st Quarter 2015

IRS has announced the interest rates for the 1st quarter of 2015.  The rates remain the same across the board as:

• 3% for most overpayments (2% for corporation overpayments)
• 3% for underpayments
• 5% for large corporate underpayments
• 0.5% for corporate overpayments exceeding $10,000

These rates have not changed since October 1, 2011, and now continue through March 31, 2015.  (For purposes of Form 2210, these rates remain in effect through April 15, 2015.)

Revenue Ruling 2014-29

TOMORROW!! Massachusetts / Rhode Island NATP Chapter Annual State Update Seminar - January 8th 2015 - REGISTER @ THE DOOR

Massachusetts / Rhode Island NATP Chapter Annual State Update Seminar - January 8th 2015

Join the Massachusetts / Rhode Island NATP Chapter on Thursday, January 8th, 2015 for our Annual State Update Seminar. This all day event will be held at the Sturbridge Host in Sturbridge MA. Registration details are below, and will be handled online by National this year. A link to the registration website is listed below. Please take a look at the details on our speakers and topics provided in this great update opportunity including continental breakfast, snacks, lunch, vendors and great networking opportunities PLUS even 2 CE Credit Hours.

• After January 5, please register at the door with the form above.

Topics:

Connecticut State Tax Update presented by Danielle Toce of Connecticut Department of Revenue Services.

Massachusetts State Tax Update presented by Brian Lynch, William Lauziere & George Barresi of Massachusetts Department of Revenue.

Rhode Island State Tax Update presented by Richard Coia & Scott Lewis of Rhode Island Division of Taxation.

New York State Tax Update presented by Kathryn Keane, VP of New York NATP Chapter.

Federal Tax Update presented by Kathryn Keane of New York NATP Chapter. (2 Hours of CE Credits)

Featured Speaker - Kathryn M. Keane, EA.

Kathryn is a principal of Macanta, a small tax and related services practice located in Brooklyn, NY, serving over 850 individual clients and 50 businesses. In December 2006, Kathryn completed two three-year terms on the National Board of Directors of NATP and was twice awarded Chapter Person of the Year for 2002 and 2008 for her volunteer service to the community at large as well as to NATP. In addition to serving as an Education Committee member for NY NATP, she currently serves as Chair of the IRS Tri-Boro Practitioner Liaison Committee. Kathryn is a frequent speaker for NATP Chapters. She has also presented for VASEA, NCCPAC (Nassau-Suffolk County Chapter) and local chapters of NYSSCPA. Kathryn has a B.S. degree from Brooklyn College.

Happy New Year From MA / RI Chapter

Happy New Year from your Massachusetts/Rhode Island Board of Directors.

Hope to see in Sturbridge on January 8th, 2015 for our State Update Seminar!