IRS Tax News

  • 04 Oct 2012 9:29 AM | Anonymous

    Sometimes, when the right opportunity presents itself, you may be able to pay for goods and services
    that you need or want by trading goods that you own, or providing a service that you can perform in
    return. An example of this is if you own a lawn maintenance company and receive legal services from an
    attorney and pay for those services by providing an agreed upon amount of mowing and maintenance
    services at the attorney’s home or place of business. In this scenario, the fair market value of the legal
    services provided is taxable to you as the lawn maintenance company owner. At the same time, the fair
    market value of the lawn and maintenance services you provide is taxable to the attorney or his firm.
    This type of transaction - bartering or trading - can prove to be useful when cash-flow problems would
    otherwise prevent you from securing needed goods or services. And while there is no exchange of cash
    or credit, the fair market value of the goods or services that were exchanged is taxable to both parties
    and must be claimed as other income on an individual or business income tax return.

    Remember, just like with payments by money, if a business makes payments of bartered services to
    another business (except a corporation) of $600 or more in the course of the year, these payments are to
    be reported on Form 1099-MISC.

    When considering record keeping requirements, barter and trade transactions should be treated just like
    any other financial transaction or exchange. Original cost of goods being bartered or traded, transaction
    dates, fair market value at the time of the transaction, and other pertinent details should be recorded to
    assist in the preparation of your income tax return and held, in general, for a period of 3 years in
    accordance with other documents and receipts used to substantiate income and expenses.

    For more details on barter and trade transactions, please visit the IRS’ Bartering Tax Center or view the
    Do You Barter? video.

  • 26 Sep 2012 4:15 PM | Anonymous

    Effective October 1, 2012, applications to become an IRS e-file provider must be submitted online. We will no longer accept paper e-file applications.

    Become an e-file provider in 3 easy steps:

    1. Create an IRS e-Services account.
    2. Submit your e-file provider application online.
    3. Pass a suitabilty check

    The online application process takes 4-6 weeks to complete – don’t delay, become an e-file provider today.

    NOTE: Existing e-file providers must now use e-Services to make account updates.

    Help is available at IRS.gov or through the e-Help Desk at 1-866-255-0654 (512-416-7750 for international calls), Monday through Friday, 6:30 a.m. - 6:00 p.m. (CST). Frequently Asked Questions and online Tutorials are available to answer questions or to guide users through the application process.
  • 21 Sep 2012 5:21 PM | Anonymous

    Victims of the severe storms and straight-line winds that began on June 29, 2012 in parts of West Virginia may qualify for tax relief from the Internal Revenue Service.

    The President has declared Fayette, Kanawha, Nicholas, and Raleigh counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

    The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after June 29, and on or before August 28, have been postponed to August 28, 2012.  
    In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after June 29, and on or before July 16, as long as the deposits are made by July 16, 2012.

    If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.
    The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

    Covered Disaster Area

    The counties above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

    Affected Taxpayers

    Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

    Grant of Relief

    Under section 7508A, the IRS gives affected taxpayers until August 28 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after June 29 and on or before August 28.

    The IRS also gives affected taxpayers until August 28 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after June 29 and on or before August 28.

    This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

    The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after June 29 and on or before July 16 provided the taxpayer makes these deposits by July 16.

    Casualty Losses

    Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

    Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

    Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “West Virginia/Severe Storms and Straight-Line Winds” at the top of the form so that the IRS can expedite the processing of the refund.

    Other Relief

    The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

    Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

    Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

    Related Information

    Recent IRS Disaster Relief Announcements

  • 17 Sep 2012 12:05 PM | Anonymous

    Find out how gambling income and losses can affect federal taxes in this new YouTube video.

    Watch this and other videos on the IRS YouTube Channel.

  • 13 Sep 2012 2:02 PM | Anonymous

    The Electronic Management System  (EMS) located at the Enterprise Computing Center in Martinsburg, West Virginia will be unavailable from Saturday, October 6, 2012, at 9:00 p.m. Eastern Time through Tuesday, October 9, 2012, at 5:00 a.m. Eastern Time.

    This will affect individual, business, and state returns processed on the EMS located in Martinsburg, West Virginia.

    Due to the Columbus Day holiday, drains will not occur on Monday, October 8, 2012 at Martinsburg or Memphis. Normal processing will resume Tuesday, October 9, 2012 at 5:00 a.m.

    We apologize for any inconvenience this may cause you.
  • 13 Sep 2012 9:19 AM | Anonymous

    This Sept. 26 webinar will cover basic business taxes for the self-employed.

  • 13 Sep 2012 9:18 AM | Anonymous

    Individuals and businesses in Louisiana and Mississippi affected by Hurricane Isaac may qualify for extensions of time to file returns and pay any taxes due.

    IR-2012-70 has more information.

  • 31 Aug 2012 5:30 PM | Anonymous

    IRS YouTube Videos
    Preparing for Disasters:
     English | Spanish | ASL

    How to Request a Copy of Your Tax Return:
     English | Spanish | ASL

    Podcast
    Disaster Assistance:
     English | Spanish

    IR-2012-60, June 11, 2012

    WASHINGTON undefined With the early start of this year’s hurricane season, the Internal Revenue Service encourages individuals and businesses to safeguard themselves against natural disasters by taking a few simple steps.

    Create a Backup Set of Records Electronically

    Taxpayers should keep a set of backup records in a safe place. The backup should be stored away from the original set.

    Keeping a backup set of records –– including, for example, bank statements, tax returns, insurance policies, etc. –– is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original records are provided only on paper, they can be scanned into an electronic format. With documents in electronic form, taxpayers can download them to a backup storage device, like an external hard drive, or burn them to a CD or DVD.

    Document Valuables

    Another step a taxpayer can take to prepare for disaster is to photograph or videotape the contents of his or her home, especially items of higher value. The IRS has a disaster loss workbook,Publication 584, which can help taxpayers compile a room-by-room list of belongings.

    A photographic record can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area.

    Update Emergency Plans

    Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

    Check on Fiduciary Bonds

    Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

    IRS Ready to Help

    If disaster strikes, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

    Back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return.

    Alternatively, transcripts showing most line items on these returns can be ordered on-line, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.    

    Related Items:

  • 31 Aug 2012 4:47 PM | Anonymous

    As you may have noticed, the IRS has made extensive changes to the look and functionality of the IRS.gov website.  These changes aim to improve online services for all stakeholders.

    While the home page looks similar, there are new colors, new headings and a completely new way to navigate the site. The new navigation is one of the most significant changes users will see on IRS.gov.  To maintain a measure of continuity between the old and new, you will find a menu list in the upper right-hand corner called “Information for...” that incorporates virtually all content from the old site under familiar headings such as “Charities and Non-Profits,” Government Entities,” “Retirement Plans” and “Tax Exempt Bonds.”

    If you bookmarked pages in the old website, check the redesigned site and update your bookmarks and favorites.  A new feature on every page gives you the option of clicking a heart graphic to save the page as a bookmark.

  • 31 Aug 2012 4:46 PM | Anonymous

    Registration for the 2:00 p.m. ET session of the Sept. 7 phone forum has reached capacity and is closed. However, IRS has added another session at 11:00 a.m. ET to enable more people to attend. Please don’t register for this new session if you’ve already registered for the 2:00 p.m. ET session.

    Learn how to correct common mistakes in 401(k) plans.

    Avaneesh Bhagat, Voluntary Compliance group manager, and Sherri Morris, Voluntary Compliance tax law specialist, will present this phone forum. Email specific issues you would like the speakers to address to ep.phoneforum@irs.gov.

    Registration Link - after registering, you will receive forum access instructions in an email.

     
    Continuing Education Credits:

    • Enrolled Agents and Enrolled Retirement Plan Agents may earn CE credit for attending the entire phone forum. It‘s also intended to meet the CE requirements for Enrolled Actuaries, but the final decision rests with the Joint Board for the Enrollment of Actuaries. Other professional groups should consult their licensing agencies for acceptability of credit.
      You must register individually and use your own assigned User ID to receive CE credit.
      You must use an individual phone line and attend the entire forum to receive CE credit.
      If you meet the attendance requirement, you will receive a Certificate of Completion via email about a week after the forum.
      If you have any questions, please contact ep.phoneforum@irs.gov.
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