Tax Alerts
Tax Briefing(s)

2017 Due Date Changes (Tax Year 2016)

Common Internal Control Processes  

How are you managing your business finances? Many business owners are discovering that their assets are not as well protected as they thought. This is especially true in small business environments where a single employee or few employees manage all the finances. Often there are no checks and balances to verify that transactions are accurate. 





President Trump on February 9 signed the Bipartisan Budget Act into law after a brief government shutdown occurred overnight. The legislation contains tax provisions in addition to a continuing resolution to fund the government and federal agencies through March 23. The House approved this new law in the early morning hours of February 9, by a 240-to-186 vote. The Senate approved the bipartisan measure a few hours earlier, by a 71-to-28 vote.

The Treasury Department has proposed repealing 298 regulations. According to the Treasury, the targeted rules are unnecessary, duplicative or obsolete. In addition, the Treasury proposed to amend another 79 regulations to reflect the repeal.

The Trump administration on February 12 released its much-anticipated fiscal year (FY) 2019 budget request, "Efficient, Effective, Accountable An American Budget." The administration’s proposal calls for IRS funding that focuses additional resources on enforcement and cybersecurity. Coming off passage of the Tax Cuts and Jobs Act, this year’s budget recommendations contain only a handful of additional tax proposals when compared to some prior-year budget requests.

The Treasury and IRS have released their second quarter update to the 2017-2018 Priority Guidance Plan. The updated 2017-2018 Priority Guidance Plan now reflects 29 additional projects, including 18 projects that have become near term priorities as a result of the Tax Cut and Jobs Act of 2017.

New proposed regulations under the centralized partnership audit regime address how and when partnerships and their partners adjust tax attributes to take into account partnerships’ payment adjustments. They also provide, among other additions and clarifications to earlier proposed regs, rules to adjust basis and capital accounts if the partnership adjustment is a change to an item of gain, loss, amortization or depreciation.

The IRS has issued guidance for certain specified foreign corporations owned by U.S. shareholders subject to the Code Sec. 965 transition tax that are requesting a change in accounting period. The IRS will not approve a request to change the annual accounting period under either the existing automatic or general change of accounting period procedures if the change could result in the avoidance, reduction, or delay of the transition tax. This guidance applies to any request to change an annual accounting period that ends on December 31, 2017, regardless of when such request was filed.

The IRS has posted best practices for return preparers addressing the Affordable Care Act’s individual shared responsibility requirement, also known as the individual mandate. The Service reminded preparers that the Tax Cuts and Jobs Act did not eliminate the individual shared responsibility requirement for 2017.

Everybody knows that tax deductions aren't allowed without proof in the form of documentation. What records are needed to "prove it" to the IRS vary depending upon the type of deduction that you may want to claim. Some documentation cannot be collected "after the fact," whether it takes place a few months after an expense is incurred or later, when you are audited by the IRS. This article reviews some of those deductions for which the IRS requires you to generate certain records either contemporaneously as the expense is being incurred, or at least no later than when you file your return. We also highlight several deductions for which contemporaneous documentation, although not strictly required, is extremely helpful in making your case before the IRS on an audit.

On February 22, President Obama signed the Middle Class Tax Relief and Job Creation Act of 2012.  The new law extends the employee-side payroll tax holiday, giving wage earners and self-employed individuals 12 months of reduced payroll taxes in 2012.

The number of tax return-related identity theft incidents has almost doubled in the past three years to well over half a million reported during 2011, according to a recent report by the Treasury Inspector General for Tax Administration (TIGTA). Identity theft in the context of tax administration generally involves the fraudulent use of someone else’s identity in order to claim a tax refund. In other cases an identity thief might steal a person’s information to obtain a job, and the thief’s employer may report income to the IRS using the legitimate taxpayer’s Social Security Number, thus making it appear that the taxpayer did not report all of his or her income.

Taxpayers with children should be aware of the numerous tax breaks for which they may qualify. Among them are: the dependency exemption, child tax credit, child care credit, and adoption credit. As they get older, education tax credits for higher education may be available; as is a new tax code requirement for employer-sponsored health care to cover young adults up to age 26. Employers of parents with young children may also qualify for the child care assistance credit.

Job-hunting expenses are generally deductible as long as you are not searching for a job in a new field. This tax benefit can be particularly useful in a tough job market. It does not matter whether your job hunt is successful, or whether you are employed or unemployed when you are looking.

Adoptive parents may be eligible for federal tax incentives. The Tax Code includes an adoption tax credit to help defray the costs of an adoption.  Recent changes to the adoption tax credit make it very valuable.