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November 16, 2018
NewsThe IRS has announced the tax year 2019 inflation adjustments for some 60 tax provisions. That includes the tax rate brackets, the standard deduction, the estate tax exclusion, tax penalties, the dollar amounts for the limitations on medicial savings accounts, the thresholds for maximum capital gains tax rates, and eligible long-term care premiums. For a copy of the revenue procedure, go to Revenue Procedure 2018-57.
The IRS has updated the notice related to the California wildfires that began on November 8, 2018. For additional information go to Tax relief for victims of November 8 wildfires in California. The IRS has also updated the notice for victims of Hurricane Florence. Go to Help for Victims of Hurricane Florence.
Rebates taxable? . . . It all depends. If you purchase a car solely for personal use and receive a rebate from the dealer or manufacturer, the amount isn't taxable. The same would be true for a rebate on your electric bill. On the other hand, if you got a tax benefit for the original payment, the rebate is probably taxable. For example, you deducted your real estate taxes on your 2018 individual tax return and got a full benefit for the deduction. In mid-2019 you received a rebate of $276. That amount is taxable income on your 2019 return. If you receive the rebate in the same year you pay the tax, the general rule is to simply offset the two amounts. If you took the standard deduction in 2018, the rebate would not be income in 2019 (you got no tax benefit). There are some situations that can be trickier. The same rules apply to medical expenses and similar items. IRS Publication 525 has more information.
November 15, 2018
NewsSubstantiation is often the deciding factor in whether a taxpayer is able to claim a deduction for an expense. In Max Sutherland and Eric P. Decker (T.C. Memo. 2018-186) the taxpayers failed that test with respect to unreimbursed employee business expenses, job search expenses, and medical expenses. The Court allowed a deduction with respect to some job search expenses were the Court found a relationship between the expenses and his job search. However, the Court found no such relationship with respect to other expenses including meals, travel, and entertainment. Rather, the Court found many of the expenses were personal in nature. The Court found that the taxpayer could have been reimbursed for his employee business expenses. Finally, the Court noted that the taxpayer kept no trvel log or diary of the trips to the doctor or pharmacy and disallowed those medical expenses.
In Craig Douglas Hoglund and Christine Joan Hoglund (T.C. Memo. 2018-185) the Tax Court held that the Appeals Officer did not abuse her discretion when she sustained the proposed levy. The taxpayers did not participate in the hearing and did not challenge their tax liability. In addition, the taxpayers provided no collection alternatives and failed to provide the requested financial information. At the Collection Due Process hearing they did raise their purported claim for damages under Section 7433 articulated in their administrative claim letter.
Tip of the DayNonresident partners or shareholders . . . Does your S corporation or partnership (or LLC) have nonresident partners? In the past, that shareholder or partner would have to file a nonresident income tax return in that state. Often, the individual failed to do so. Many states have changed their rules requiring the S corporation or partnership to file a composite return, essentially paying the tax for the owner, or the S corporation or partnership could be required to withhold and remit estimated taxes equal to the amount for which the individual would be liable. About half the states have such a requirement. Make sure you're compliant.
November 14, 2018
NewsVictims of Wildfires that took place beginning on Nov. 8, 2018 in California may qualify for tax relief from the IRS. The President has declared that a major disaster exists in the State of California. Following the recent major disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in certain counties will receive tax relief. Individuals who reside or have a business in Butte, Los Angeles and Ventura 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 Nov. 8, 2018 and before April 30, 2019, are granted additional time to file through April 30, 2019. This includes 2018 individual income tax returns and payments normally due on April 15, 2019. It also includes the quarterly estimated income tax payments due on Jan. 15, 2019 and April 15, 2019 and the quarterly payroll and excise tax returns normally due on Jan. 31, 2019. It also includes tax-exempt organizations that operate on a calendar-year basis and had an automatic extension due to run out on Nov. 15, 2018. In addition, penalties on payroll and excise tax deposits due on or after Nov. 8, 2018, and before Nov. 23, 2018, will be abated as long as the deposits are made by Nov. 23, 2018. For additional information go to Tax relief for victims of November 8 wildfires in California.
Tip of the DayYear-end charitable contributions . . . With the new limits on deducting state and local taxes and the elimination of most miscellaneous itemized deductions, there are fewer options left for year year-end planning with respect to itemized deductions. In fact, even some higher income taxpayers will be claiming the standard deduction. You can still bunch deductions into one year by making a large charitable contribution in, say 2018, and none in 2019. But you may not have time to research a charity or plan the contribution. By making a contribution to a donor-advised fund you can cut the check this year and decide in the future how to spend the funds. The money or securities are contributed to a sponsoring organization and doled out to the individual charities. Talk to your tax or financial advisor. In most cases there's a minimum contribution. While the funds may not go to their ultimate destination immediately, once you send the check, the contribution is irrevocable.
November 13, 2018
NewsThe IRS is reminding taxpayers, including those in disaster areas, who want to file a 2017 tax return electronically to do so by Saturday, Nov. 17, 2018. Filing of paper tax returns will remain available after that date. IRS Modernized e-file, the system that processes electronically-filed individual returns, will shut down after Nov. 17, enabling the IRS to perform annual maintenance and to reprogram the system for the upcoming 2019 tax-filing season.
The IRS has released the 2018-2019 Priority Guidance Plan. The plan continues to prioritize implementation of the Tax Cuts and Jobs Act enacted on December 22, 2017.
The IRS has issued proposed amendments to the regulations (REG-107813-18; NPRM REG-107813-18) relating to hardship distributions from Section 401(k) plans. The amendments reflect statutory changes affecting section 401(k) plans, including recent changes made by the Bipartisan Budget Act of 2018. These regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of plans that contain cash or deferred arrangements or provide for employee or matching contributions. The proposed regulations clarify that new Sec. 165(h)(5) limit does not affect the definition of casualty loss for hardship withdrawals for a principal residence and add a safe harbor for damage incurred in a federally declared disaster area.
Tip of the DayGetting a divorce? . . . If you're in the middle of a divorce and the tax break of alimony can save you significant tax dollars, you should speed things up. The alimony deduction (and the corresponding income to the recipient) ends on December 31, 2018. You might consider agreeing to some concessions to get it done before the deadline. If you haven't started or just started the process, it's almost assuredly too late to meet the deadline. Discuss the issue with your divorce attorney or tax advisor.
November 9, 2018
NewsThe area where the IRS is providing relief for Hurricane Michael victims has been extended to income the counties of Geneva, Henry, Houston, and Mobile in Alabama. The relief includes the extension of deadlines, either original or extended, that occurred on or after October 9, 2018 and before February 28, 2019. Taxpayers who live or have a business in the area may qualify for relief. For more information go to Help for Victims of Hurricane Michael.
The IRS is advising taxpayers with expiring Individual Taxpayer Identification Numbers (ITIN) should submit their renewal applications as soon as possible. Failing to renew them by the end of this year will cause refund and processing delays in 2019. ITINs that expire at the end of this year have middle digits 73, 74, 75, 76, 77, 81, and 82--for example, 9NN-73-NNNN. For more information, go to Taxpayers who have an ITIN set to expire should renew it ASAP.
The IRS has issued final regulations (T.D. 9840) concerning religious exemptions and accommodations regarding coverage of certain preventive services issued in the Federal Register on October 13, 2017. These rules expand exemptions to protect religious beliefs for certain entities and individuals whose health plans are subject to a mandate of contraceptive coverage through guidance issued pursuant to the Patient Protection and Affordable Care Act. The IRS has also issued final regulations (T.D. 9841) regarding moral exemptions and accommodations regarding coverage of certain preventive services. These rules finalize expanded exemptions to protect moral beliefs for certain entities and individuals whose health plans are subject to a mandate of contraceptive coverage pursuant to the PPACA. These rules do not alter the discretion of the Health Resources and Services Administration, a component of the U.S. Department of Health and Human Services, to maintain the guidelines requiring contraceptive coverage where no regulatorily recognized objection exists. These rules also leave in place an “accommodation” process as an optional process for certain exempt entities that wish to use it voluntarily. These rules do not alter multiple other federal programs that provide free or subsidized contraceptives for women at risk of unintended pregnancy.
Tip of the DayBuying a business . . . Unless you're just buying assets, you need professional accounting and/or financial help to review the target company's books. And you can't just look at the condensed version. Sales may be up, but is the business collecting on their accounts receivable? More than one seller has padded sales by pushing unwanted goods on distributors and customers or selling to accounts with dubious credit just to boost sales. Or is the company cutting back on necessary expenses just to improve the bottom line? Your CPA should be able to provide some insight.
November 8, 2018
NewsOne of the tax disadvantages of a regular corporation is the possibility of a double tax on selling the corporation in an asset deal. In an effort to mitigate the effects the corporation in Trust U/W/O BH and MW Namm F/B/O Andrew I. Namm, Andrew I. Nammand James Doran, Trustees, Transferee, et al. (T.C. Memo. 2018-182) the petitioners engaged in a "Midco" transaction (a strategy in which the shareholders sell their stock to a transient intermediary company, which would plan to offset the built-in gain with a prepackaged tax shelter, often a Son-of-BOSS scheme. Unfortunately, the IRS didn't agree with the petitioners' reading of the facts and the tax law and assessed a tax deficiency. But the company had already been liquidated. The IRS sought transferee liability against the shareholders. The Court agreed, finding that the statute of limitations had not run on the assessment of the tax against the transferees.
If the transactions sound too complicated, you should beware. In Sugarloaf Fund, LLC, Jetstream Business Limited, Tax Matters Partner, et al. (T.C. Memo. 2018-181) the taxpayers entered into a number of transactions intended to secure tax benefits from the purchase of distressed debt. The Court found that there was no intent to collect on the distressed debt, the purported rollups never occurred, and the LLC lacked economic substance. In addition, amounts paid to the LLC by investors constituted income to the LLC.
Tip of the DayBusiness directory scam . . . The scams that worked well when phone and regular mail was the most used method of communication work even better in the digital age. The FTC has reported on a scam where you'll get a phone call about an listing in a phone directory. Whether you order the ad or not you'll receive an invoice for the purported ad. Deny you ordered the ad? The scammers will say they have proof you ordered it over the phone. Just don't pay. You should check out all invoices to make sure the item or service was both ordered and delivered. You may set a low threshold on researching the item. For example, invoices under $10 don't require checking. The dollar amount you set will depend on the size of your business and how many invoices you get each day. Make sure your employees don't routinely pay invoices without checking. Talk to your accountant about a system to protect yourself.
November 7, 2018
NewsThe IRS has issued final regulations (T.D. 9842) relating to the tax return preparer penalty under Sec. 6695. The final regulations are necessary to implement recent law changes that expand the scope of the tax return preparer due diligence penalty so that it applies to the child tax credit (CTC)/additional child tax credit (ACTC), and the American opportunity tax credit (AOTC) as well as to eligibility to file a return or claim for refund as head of household. The regulations affect tax return preparers.
THe IRS has issued proposed regulations (REG-107163-18; NPRM REG-107163-18) specifying which return to use to pay certain excise taxes and the time for filing the return. The regulations also implement the statutory addition of two excise taxes to the first-tier taxes subject to abatement. These regulations affect applicable tax-exempt organizations and their related organizations, applicable educational institutions, sponsoring organizations that maintain certain donor advised funds, fund managers of such sponsoring organizations, and certain donors, donor advisors and persons related to a donor or donor advisor of a donor advised fund. These regulations affect Secs. 4963, 6011, and 6071.
Tip of the DayReciprocal arrangements may not work . . . It sounds like a good way to be able to deduct some of the expenses on your boat, vacation home, etc. You rent your boat for a month during the summer to your friend and he rents his vacation home on a lake. Neither of you could have rented your properties in a regular transaction. The passive activity rules specifically mention such deals and they generally won't work. There are many other situations where reciprocal arrangements may not be allowed for tax purposes. Check with your tax advisor before committing.
November 6, 2018
NewsThe IRS has announced (IR-2018-213) an agreement with the Free File Alliance that will strengthen and expand taxpayer options for people choosing to use the free online software program during the 2019 filing season. The agreement updates several areas designed to make the Free File program more taxpayer friendly while strengthening consumer protections in several key areas. The IRS and the Free File Alliance agreed to revisit key components of the program to strengthen consumer protections and parts of the program. The changes extend the existing memorandum of understanding by one year to Oct. 31, 2021. The agreement is being announced now to allow the software community time to implement the changes for the start of the upcoming filing season. One of the changes is that follow-up emails to taxpayers who used Free File the previous year will welcome them back to Free File service. This change will strengthen rules for members sending follow up emails to prior year taxpayers/customers, reminding them of the availability of Free File. To help increase program participation, Free File members will email prior year participants about the continuing availability of Free File prior to the start of the filing season. The email cannot contain information about any non-Free File service or product or any marketing or soliciting, except for free or paid state tax preparation offers.
You've got to have adequate documentation if you want to claim losses as a result of a theft or worthless securities. If you make an investment on your own, such as putting money in your friend's company, you should be prepared to have canceled checks and/or other bank records, a stock certificate or note, etc. In Michael A. Giunta and Julia A. Giunta (T.C. Memo. 2018-180) the taxpayers had made a number of wire transfers to five friends to bail them out of an investment. The taxpayers were to have bought out their interests in a company. But there were no documents to indicate what the payments were for and no one informed the company of the change in ownership. The taxpayer took no action to recover money from the company and for several years did not even check on his investment. The Court found the taxpayer had not shown a theft loss occurred under state law. The Court denied a loss for a worthless security because he did not adequately that he owned a security, his basis in the security, and that the security became worthless during the year. All three factors are required to claim a loss on worthless securities.
Tip of the DayHoliday season approaching . . . Most indicators point to a good jump in holiday sales this year. With unemployment at its lowest point in years, retailers could find getting those extra seasonal workers difficult. You may have to offer higher pay or some other incentives to hire and keep them through the season.
November 5, 2018
NewsThere were more than 693,000 employer-sponsored retirement plans with reported assets of more than $8 trillion in Plan Year 2015. During Fiscal Years 2015 and 2016, the Tax Exempt and Government Entities (TE/GE) Division reported that its Employee Plans (EP) function completed nearly 17,000 examinations of employer-sponsored retirement plans. The Treasury Inspector General for Tax Administration (TIGTA) performed an audit to assess how the TE/GE Division selects EP function examination cases for quality review, documents results, and provides feedback to employees performing examinations. TIGTA found that during Fiscal Years 2015 and 2016, the TE/GE Division met its statistical sampling goals by selecting and quality reviewing more than 700 EP function examinations. Detailed results of these quality reviews were documented for more than 30 quality review questions for five quality standards. As a result, the TE/GE Division was able to compute an overall examination quality rate of approximately 80 percent for each fiscal year and provide continual feedback to IRS executives on the quality of EP function examinations. The TE/GE Division also provided indirect feedback to examiners through quarterly newsletters, lunch and learn sessions, and other methods. However, the TE/GE Division generally did not provide direct feedback to responsible individual examiners and group managers on the results of quality reviews. TIGTA believes additional feedback is needed. In addition, serious quality issues were identified that were not detected during managerial reviews. As such, the TE/GE Division is not providing effective and timely feedback, which is key to improving employee performance. Quality review processes were primarily designed to compile aggregate results on the quality of examinations and to ensure that the examination program is meeting performance goals. As a result, individual examiners are unaware of quality issues identified on examinations they conducted and examination quality may not improve. To see the complete report go to https://www.treasury.gov/tigta/auditreports/2019reports/201910001fr.pdf.
Tip of the DayBuying stocks for the dividend . . . Investment approaches vary widely among investors. Some have virtually no understanding of the market and let their broker make the decisions; some invest only in mutual funds; some in stocks; some in more exotic choices. If you want to own individual stocks, have a long-term outlook, and want to minimize risk, investing in dividend paying stocks often makes sense. If the market plunges, these stocks often hold up because they pay a dividend. You want a stock that has growth potential that will result in dividend increases over the years. Often you can buy and hold these stocks for many years. But you've still got to watch them. You should be able to read a financial statement and check it quarterly along with any news to see if a company's fortunes are turning. Just because the company's paid a dividend for 50 years doesn't mean it will continue to do so. And it doesn't mean the dividend won't be cut.
November 2, 2018
NewsThe IRS has announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019. The IRS today issued technical guidance detailing these items in Notice 2018-83. The contribution limit for 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan increased from $18,500 to $19,000. The IRA contribution limit has gone from $5,500 to $6,000. (Catch-up contributions for those age 50 or older is not adjusted and remains at $1,000.) Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) The phase-out ranges for 2019 are:
The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. The limitation for SIMPLE plan increases from $12,500 to $13,000.
The IRS has again updated the list of counties in Florida and Georgia where taxpayers who reside or have their business in qualify for relief as a result of Hurricane Michael. For additional information, go to Help for Victims of Hurricane Michael.
While the federal estate tax threshold is now high enough for many, but not all, taxpayers to avoid any liability. Once the tax becomes applicable, the applicable marginal rate is 40 percent. In Estate of Frank D. Streightoff, Deceased, Elizabeth Doan Streightoff, Executor (T.C. Memo. 2018-178) the Court found that the decedent transferred to the revocable trust a limited partnership interest and not an assignee interest. The Court said the economic realities underlying the transfer of decedent's interest also supported its conclusion that the transferred interest should be treated as a limited partnership interest for Federal estate tax purposes. Regardless of whether an assignee or a limited partnership interest had been transferred, there would have been no substantial difference before and after the transfer to the revocable trust. The partnership held cash, marketable equity, municipal bonds, and corporate bonds. The Court acknowledged that the value of the partnership should be reduced by 18 percent for a lack of marketability, but held the interest was not entitled to a lack of control discount.
Tip of the DayDelinquent taxpayers listed . . . Some states have a published list of taxpayers who have not paid their assessed state taxes. Usually it's the top 100 or 500 by dollar amount and typically doesn't include those who have made an agreement with the state such as an offer-in-compromise, installment agreement, or in negotiation. That could be embarassing if you're a public figure, have a well known business, etc. Local governments also publish a list of properties in default on property taxes. That's been in existence for some time and has generally been published in a newspaper of record.
November 1, 2018
NewsThe IRS has issued proposed regulations (REG-114540-18) reducing the amount determined under Code Section 956 for certain domestic corporations that own (or are treated as owning) stock in controlled foreign corporations (CFCs).
The IRS has released a new publication, Tax Reform Basics for Individuals and Families that provides an easy to understand, short explanation of the changes of the new tax law affecting your 2018 tax return.
You may be able to avoid joint liability on a return with a spouse but you've got to meet certain requirements to get innocent spouse relief. In Christopher Schorse, Petitioner, and Cynthia Palabrica, Intervenor (T.C. Memo. 2018-176) the Court noted that to qualify for relief, a requesting spouse cannot have had actual knowledge or a reason to know of the understatement at the time he or she signed the joint return. Generally, a requesting spouse has reason to know of the understatement if he has reason to know of the transaction that gave rise to the understatement. A spouse knew or had reason to know of an understatement if a reasonably prudent person in his position would have known that the return contained an understatement when he signed it. In applying the reasonably prudent person standard, the Courts considers four factors and weighs them. Here the Court noted that while the petitioner did not have a degree in accounting or business, he did have his own business, understood the K-1 and was active in the family finances. In addition, there was nothing to indicate the intervenor (his wife) tried to hide anything from the petitioner. The Court held that although many of the factors for equitable relief either favored the petitioner or were neutral, his actual knowledge of the losses deducted on the joint returns, his involvement in preparing those returns, and the significant benefit he received from the understatements weigh too heavily against him to allow relief. Weighing all the facts and circumstances, the Court found that petitioner was not entitled to relief from joint and several liability for the two years at issue.
Tip of the DayFarmers and ranchers . . . Because their operations are at the vagaries of weather, pests, disease, etc. the tax code provides some different rules for farmers and ranchers. IRS Tax Tip 2018-169 discusses the changes under the new tax law including the change in the NOL to a 2-year carryback, the 80 percent limitation of income, and the removal of the 20-year restriction on carrying the losses forward. Other changes of interest include the qualified business income deductions and the ability to use the cash method of accounting where average annual gross receipts do not exceed $25 million.
October 31, 2018
NewsIRS records show that, in Tax Year 2014, an estimated 53 million taxpayers contributed almost $255 billion to tax-qualified deferred compensation plans. A popular form of deferred compensation plans, known as 401(k) plans, permits employees to save for retirement on a tax-favored basis. However, there are rules that limit the amount individuals can contribute to a 401(k) plan each tax year. The Treasury Inspector General for Tax Administration (TIGTA) performed an audit to determine whether IRS processes sufficiently identify and address excess contributions to 401(k) plans. TIGTA analysis of IRS records showed that the vast majority of taxpayers are complying with tax laws designed to limit the annual amount of compensation that can be contributed to 401(k) retirement plans. Nonetheless, TIGTA identified two areas in which compliance could be improved: 1) some 401(k) plans did not prevent taxpayers from exceeding the annual limit and 2) some taxpayers exceed annual limits when contributing to multiple 401(k) plans. TIGTA selected a statistical sample of taxpayers who may have exceeded annual limits when contributing to 401(k) plans in Tax Year 2014. Based on the sample, TIGTA estimates that approximately 1,400 taxpayers appeared to have exceeded the statutory limit when contributing to one 401(k) plan and, as a result, would owe additional taxes of about $8 million if found to be noncompliant. In these instances, 401(k) plan administrators did not appear to have controls in place to ensure that taxpayers contributing to their 401(k) plans did not exceed annual limits. TIGTA also determined through review of the statistical sample that some taxpayers may have exceeded annual limits when contributing to multiple 401(k) plans. TIGTA estimates approximately 13,200 taxpayers who contributed to multiple 401(k) plans had potentially exceeded the annual limit and, as a result, would owe additional taxes of about $33 million if found to be noncompliant. To see the full report, go to www.treasury.gov/tigta/auditreports/2019reports/201910002fr.pdf
One area where the IRS gives little ground when assessing penalties is that of employment taxes. Employee withholding for income, FICA and medicare taxes and the employer's portion of FICA and medicare taxes can quickly add up to a sizable amount and easily dwarf the company's liability for taxes on the business income. In Deaton Oil Company, LLC (U.S. Court of Appeals, Eighth Circuit) the company became delinquent on its payroll deposits as a result of an untrustworthy employee. The company owner was the employee's supervision of the company's owner. The company blamed the employee for the failure to pay the taxes on time and asked for a refund of the penalties and interest. The company also argued that the company's CPA assured the owner the taxes were paid, but did not verify that in any way. The Court noted that advice from a professional may be reasonable cause for errors based on tax law, but not as an excuse when it comes to filing a return. The Court noted that the taxpayer bears the heavy burden of proving both (1) that the failure did not result from willful neglect, and (2) that the failure was due to reasonable cause. The Court also noted that the filing of a return is a non-delegable duty, and an agent's failure to act as expected does not absolve the principal of that duty. The Court sided with the District Court in denying the taxpayer relief.
Tip of the DaySpoofing Social Security Administration . . . Spoofing is a technique scammers use to display a phony caller ID on your phone. In recent years the scammers have aggressively been "spoofing" the IRS phone number in Washington along with the IRS name. The IRS has warned taxpayers many times not to accept such phone calls and it could be it's working. Scammers are now "spoofing" the Social Security Administration's (SSA) number. Calling and either threatening to cut off benefits or to increase them. All they need is your social security number and certain other information. Unfortunately you can't identify a scammer from the phone number, because that's the true number for the SSA. Couple of points. First, like the IRS, your first contact with SSA is not going to be by phone, unless you initiate the call. That's pretty much the same rule as the IRS. Second, you should never give personal information to someone who calls you unsolicited. The SSA will ask for information if you call them. For more information, go to Hang up on spoofed SSA calls on the Federal Trade Commission website.
October 30, 2018
NewsThe president has signed legislation expanding a religious exemption on the Affordable Care Act (ACA) individual mandate. This provision is effective for taxable years beginning after December 31, 2018.
If you go to Tax Court to protest a tax deficiency notice you don't have to pay the assessed amount until the case is settled. There's another option. Paying the tax and claiming a refund. If the refund claim is denied you can challenged the IRS in District Court or Court of Federal Claims. But you must pay the full amount of the tax first. In John Schlabach (U.S. District Court, E.D. Washington) the taxpayer was protesting a frivolous return penalty. The Court held it did not have jurisdiction because the taxpayer failed to pay the full amount of the penalties (he paid only 15 percent) before filing his petition. The Court also noted that he filed his suit before the IRS officially rejected his refund claim.
Tip of the DayNexus for income and franchise tax . . . There has to be some sort of connection (nexus) between your business and a state in order for you to be subject to tax in that state. (Nexus for sales tax can be different.) In the past you needed a physical presence such as employees working in the state, inventory in the state, etc. Many states are becoming more aggressive and finding nexus by simply having a salesman enter the state to visit a customer. In some cases merely having clients you service at a distance in the state can make you subject to income or franchise tax. As can having an ownership interest in software or equipment in the state. Talk to your tax adviser. If you don't file a return and should have, there is no statute of limitations and the state can go back as far as when you were first subject to the tax.
October 29, 2018
NewsOnce taxes have been assessed, the government generally has 10 years to collect. And bankruptcy adds an additional twist. In Larry H. Joel, et al. (U.S. District Court, W.D. Kentucky) the Court held the government’s action for collection of unpaid taxes and fraud penalties, assessed against an individual for three tax years at issue, was well within the limitations period. The government was prohibited from collecting the assessments for seven years as they were subject to the discharge order issued in a bankruptcy proceeding. Consequently, the limitations period was extended to account for the time which the bankruptcy’s court’s discharge order was in place, plus an additional six months. The taxpayer had fraudulently concealed assets in a scheme to use the bankruptcy laws to discharge the taxes that he owed. The fraud penalty assessed against the taxpayer was dischargeable because the tax event which gave rise to the fraud penalty occurred more than three years prior to the filing of the bankruptcy petition.
The IRS has again updated the list of counties where victims of Hurricane Michael can qualify for relief from certain filing deadlines and other tax relief. For that and additional information, go to Help for Victims of Hurricane Michael.
Tip of the DayEducation fringe benefit . . . The new tax law effectively eliminates miscellaneous itemized deductions for individual taxpayers. But employers can help employees with an education break. An employer that sets up a formal written plan can reimburse an employee up to $5,250 a year for education expenses before having to report any of it as income. The plan cannot be discriminatory in favor of highly compensated employees or owner-employees.
October 26, 2018
NewsIn John T. Longino (T.C. Memo. 2018-175) the taxpayer had two opportunities to challenge his liability--once in Tax Court, once in the U.S. Court of Appeals. The Court held he could not relitigate his liability in the collection due process hearing. The taxpayer claimed his liability was settled, but the Court noted a disputed tax liability may be settled by agreement between the taxpayer and the IRS. Even if an IRS employee were thought to have made a settlement offer, no settlement of any kind is binding on the IRS unless it is duly authorized and properly memorialized, e.g., in a closing agreement. The taxpayer declined to request a collection alternative, insisting he had no liability. Under these circumstances the settlement officer did not abused his discretion by not considering collection alternatives.
The income may have been obtained illegally, but it's still taxable income. In Rudy Castaneda and Julie Castaneda (T.C. Memo. 2018-173) the wife worked as a bookkeeper for a nonprofit and made checks out to herself and her husband (who did contract work for the organization) and used the director's personal credit card (which was used for organization purposes) for her own purchases. The Court sided with the IRS in finding fraud after the Court found a number of "badges of fraud" including misstatements to the IRS during the audit, dealing in cash, substantial understatement of income, late filed returns. As a result, the tax deficiency was some #196,000, the penalty for late filing added $49,488 and the fraud penalty (75% of the tax deficiency) added $147,156.
Tip of the DayEmployee fraud . . . It happens, more often than you think. In larger companies you can split jobs to make it more difficult, but that's tough in a small business. Your bookkeeper may be handling accounts payable as well as receivable. There are still steps you can take. If there are company credit cards in use, keep the limit on the cards as small as possible. Make sure someone other than the person making out the checks signs them--and that the signer reviews the check and there's documentation to back up the amount. That's certainly not foolproof, but it may prevent checks written to an unknown vendor or multiple checks written to a vendor in one month. You don't need a CPA to open the mail, run a tape on the checks, and make out the deposit ticket. That can be done by almost anyone--other than the accounts receivable clerk. Talk to your accountant. He or she is sure to have a number of suggestions that should be reasonably easy to implement.
October 25, 2018
NewsThe IRS has released a notice of proposed rulemaking (NPRM REG-136724-17) and proposed amendments of regulations (REG-136724-17) the would expand the flexibility of health reimbursement arrangements (HRAs) and allow integration with individual health coverage. The changes would allow an employer to have employees pay for their health care insurance premiums using an HRA and still satisfy the Affordable Care Act reimbursement requirements. The arrangements would be available to employers of any size.
The IRS is again reminding (IR-2018-207) tax return preparers that they must renew their PTIN number annually and that preparers can renew now with the IRS. The IRS cautions preparers not to wait to the last minute.
You may be entitled to a collection alternative such as an offer-in-compromise or an installment agreement if you can't pay your tax liability in full. But you must meet certain requirements such as having filed all required tax returns and be in compliance with estimated tax requirements. If you have a business you must also be compliant with respect to employment and income tax returns of the business and all required employment tax deposits must have been made. In Richard H. Levin and Linda D. Levin (T.C. Memo. 2018-172) the IRS settlement officer denied an installment agreement both on those grounds and that the taxpayer had the ability to pay more than the offered amount. In addition, the IRS wanted to file a notice of federal tax lien even if an collection alternative were accepted. The Court found the settlement officer did not abuse his discretion by disallowing the installment agreement and the proposing the filing of a federal tax lien.
Tip of the DayCheck your withholding . . . The IRS continues to urge taxpayers to check on their withholding. You may not have a problem if you've been conservative in claiming exemptions on your W-4 and have a only one job and your spouse (if you're married) makes about the same amount and you have no significant sources of other income. But large distributions from mutual fund investments in your own name, a large capital gain, retirement income, etc. where there is no or only a small amount of withholdings can trigger a problem. The IRS has a calculator that can help and has a web page that can help you through the process. Go to Taxpayers can follow these steps for Using the Withholding Calculator.
October 24, 2018
NewsPresident Trump announced a proposed tax cut of some 10 percent aimed at middle-income taxpayers. Despite his prediction of passage before the mid-term elections, that's impossible with Congress out until November 12th. How will the proposal fare after the election? It's probably not a good bet. There's still digesting to do on the original tax cut from last year and the deficit is climbing right now. Even if there's a Republican House and Senate passage would seem very difficult.
The larger the amount involved, the more care you should take. In Richard I. Presley and Martine N. Presley (T.C. Memo. 2018-171) the taxpayers made a substantial charitable contribution of property to a religious organization (to which they were related). The taxpayers lost a charitable contribution deduction for land improvements they made to property that was also contributed to the charity. The Court held that the land improvements could not be deducted as a charitable contribution for several reasons. For one there was no contemporaneous acknowledgment from the charity. As to the land, while the IRS argued that the deduction should be disallowed for several reasons, the Court focused on just one, the lack of a qualified appraisal and the lack of a qualified appraisal summary attached to the return. The Court agreed with the IRS in disallowing the deduction. The Court also allowed the imposition of the accuracy-related penalty, dismissing the taxpayers' argument that they relied on professionals for advice. The Court found that the professionals were not provided with accurate information with respect to the contributions.
Tip of the DayContemporaneous records . . . The IRS and the courts give more value to diary entries, etc. made near the time of the action. For example, a car log entry regular made at the time of the trip has more value than one made at the end of the week and much more value than one made at the end of the month. The IRS and the courts can usually spot a log you made the night before you saw the IRS agent. But the IRS and courts also look at other aspects such as do you regularly keep such records. A single entry in your diary for a six-month period showing the detail of a certain transaction carries less weight than if you made regular entries. Finally, sometimes a well-kept diary or log can substitute for missing receipts. But there are some areas of tax law where strict recordkeeping rules won't allow that, e.g., in the case of travel and entertainment receipts, charitable contributions, etc. The law requires a receipt and the neither the IRS nor the courts can waive that rule.
October 23, 2018
NewsIncome has to be reported and taxed to the person or entity that earned it. Sometimes the error is an accident such as when someone does business as both a sole proprietorship for some work and a corporation for other jobs. Sometimes it's intentional. In the case of Rolnnie J. Smith and Sheila C. Smith (T.C. Memo. 2018-170) the taxpayers were the sole shareholders of an S corporation which reported income from various jobs. However, the taxpayers in their personal capacity were the ones who provided the services. The Court found the S corporation never paid any compensation to the shareholders, despite the corporation's bylaws authorizing such payments. The corporation paid no wages to any other person. The corporation's name was the taxpayers' last name with the addition of Solutions, Inc. The corporation maintained no bank account. Checks the business received were deposited in the taxpayers' personal bank account. In a case such as this the Court noted the relevant test is who controls the income. Here there was no contractual relationship or similar indicium between Smith Solutions and the persons using the respective personal services of the taxpayers that recognized or acknowledged the the corporation controlled them in the performance of those respective duties. The Court found the taxpayers had to report the total income reported by the S corporation as income to them.
Tip of the DayDon't overbuy quality . . . If you're a mechanic, plumber, etc. you've probably got hand tools from your first day on the job. We know homeowners who have hand tools from their parents--over 60 years old. Such quality is harder to come by today, but you may not need it. A top-of-the-line pro chainsaw could be more than twice the cost of a big-box special. If you only use it a couple of times a year, you may be better off with the cheaper version. Spend 10 hours a month cutting wood on your property? Go for the good one. The same rules apply to shop equipment. For technological products there are two considerations--amount of use and changes in technology. In some areas rapid tech changes mean that a product purchased only a few years ago is economically obsolete. It may still work, but there are cheaper and better units on the market. Consider how you're going to use the product, how long you expect it to be relevant, etc. and then consider the price difference.
October 22, 2018
NewsThe IRS has announced that victims of severe storms, tornadoes, straight-line winds, flooding, and landslides that took place beginning on Aug. 17, 2018 in Wisconsin may qualify for tax relief. The President has declared that a major disaster exists in the State of Wisconsin. Following the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in certain counties will receive tax relief. Individuals who reside or have a business in Crawford, Dane, Juneau, La Crosse, Monroe, Richland, Sauk, and Vernon 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 Aug. 17, 2018 and before Dec. 17, 2018, are granted additional time to file through Dec. 17, 2018. This includes taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15, 2018. It also includes the quarterly estimated income tax payments due on Sept. 17, 2018 and the quarterly payroll and excise tax returns normally due on Oct. 31, 2018. It also includes tax-exempt organizations that operate on a calendar-year basis and had an automatic extension due to run out on Nov. 15, 2018. For additional information, go to Tax Relief for Victims of Severe Storms in Wisconsin.
The IRS has once again updated the list of counties affected by Hurricane Florence that are eligible for tax relief. For the updated list go to Help for Victims of Hurricane Florence.
Tip of the DayDo you need a broker? . . . Selling real estate? A boat? Your business? Do you need a broker? It depends on a number of factors. The first, and most important one, is the market. In a slow or normal market a broker can be essential for finding contacts through a number of means. Your house, boat, etc. may sell much faster and command a better price. But there are some markets where putting your own ad on the internet can get a number of good prospects the same day. First time? Best to get a broker. Keep close tabs on what's happening and you may be able to do it yourself the next time. In some cases the broker gets lucky, in others he or she works for every penny they make. Do you have the time to spend on securing a deal? Think it through carefully and get a second opinion before making a decision.
October 19, 2018
NewsFinCEN has announced that Hurricane Michael victims in affected areas of Florida and Georgia have until February 28, 2019, to file their Report of Foreign Bank and Financial Accounts (FBAR) report for the 2017 calendar year. The FBAR for calendar year 2017 would otherwise be due no later than October 15, 2018. FinCEN is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently, this only includes parts of Florida and Georgia. Should FBAR filers in other localities, including other states, affected by Hurricane Michael be deemed eligible for individual or public assistance at a later date, they will automatically receive the same filing relief.
Notice 2018-84 (IRB 2018-45) provides interim guidance clarifying how the suspension of the personal exemption deduction in Sec. 151(d)(5) of the Tax Cuts and Jobs Act applies to certain rules under Secs. 36B and 6011 relating to the premium tax credit, and under Sec. 5000A relating to the individual shared responsibility provision. The notice also announces that the Treasury Department and IRS intend to amend the regulations under Secs. 36B and 6011 to clarify the application of Sec. 151(d)(5), and that until further guidance is issued the guidance in the notice applies.
If you can show that you're a real estate professional, you can deduct losses on rental properties without the usual $25,000 limitation. But you've got to show you spent more than one-half your time in real property trades or businesses and 750 hours in the real property trades or businesses. In Walter J. Antonyshyn and Georgiana L. Antonyshyn (T.C. Memo. 2018-169) the taxpayer maintained a log based on notes made at the time the activity took place. But the Tax Court noted that in order to count an hour of time spent as time in the real estate trades or business the taxpayer had to be engaged in day-to-day management rather than investment activities. Investment activities include studying and reviewing financial statements or reports on the activity, preparing or compiling summaries or analyses of the finances or operation of the activity, and monitoring the finances or operations in a non-managerial capacity. The Court found the taxpayer hired management companies to handle the day-to-day operations of most of the couple's properties. The Tax Court held the taxpayers failed the test to qualify as a real estate professional.
Tip of the Day
October 18, 2018 News
Tip of the DayStructuring cash transactions . . . If you're in business you know the requirement to report cash receipts from a customer that exceed $10,000. Banks have a similar reporting requirement. (Cash includes more than just U.S. and foreign coin and currency.) The law contains a provision to prevent circumvention of the law by making several deposits under $10,000 to avoid the reporting requirements. For example, a customer gives you $12,000 for a construction job. To avoid the requirement you deposit $7,000 in one bank account and the following day put $5,000 in another bank. It's called "structuring" and the penalties can be confiscatory. In one case the taxpayer's activities involved more than 100 transactions over a two-year period in amounts totaling more than $870,000. The court ordered the taxpayer to forfeit the entire amount, and, in addition, the taxpayer was sentenced to 36 months imprisonment. If you're not familiar with the rules, talk to your accountant.
October 18, 2018
NewsThe case of David H. Melasky and Audrey Melasky involves two related full Tax Court cases. In the first one (151 T.C. No. 8) the IRS mailed the taxpayers a notice of determination. They owed significant back taxes dating to the mid-1990s. As payment for their more recent taxes, they hand delivered a check to the IRS and designated it for the 2009 tax year. Four days later, and before cashing the check, the IRS levied on their bank account. The check subsequently bounced when the IRS applied the levy proceeds to an earlier year. The Tax Court held that a challenge to the proper crediting of a payment is not a challenge to the underlying tax liability. It reviewed the taxpayer's dispute as to application of payments only for abuse of discretion.
In the second case of David H. Melasky and Audrey Melasky (151 T.C. No. 9) was a collection due process (CDP) case involving the taxpayers' 2006, 2008, and 2009 income tax liabilities. The taxpayers gave the IRS a check which they asked to have applied against their 2009 income tax liability. Before the check was deposited, the IRS levied on their bank account (against which the check had been drawn) with respect to other tax liabilities they owed. Their check subsequently failed to clear. The IRS applied the proceeds of the levy against their 1995 income tax liability. The taxpayers contended that the proceeds of the levy should be applied against their 2009 income tax liability. The taxpayers also requested a partial payment installment agreement but failed to pay over their equity in certain assets after three deadline extensions over about 4.5 months. The IRS determined that they would be able to rely on distributions from a trust to pay a portion of their necessary expenses and that they could therefore afford a greater monthly payment than they had proposed. For these reasons, the IRS denied the installment agreement the taxpayers had proposed. The Court held that because the taxpayers' check was dishonored, it was not a payment. The levy proceeds were an involuntary payment, and therefore the IRS did not abuse his discretion in applying the levy proceeds against their 1995 income tax liability. The Court also held that the IRS's determination to deny their installment agreement proposal was not an abuse of discretion.
Tip of the DayVacation home market . . . Some vacation home markets are heating up again. Some of them are the same ones that were hot before the housing bust--some aren't. Thinking of jumping in? You're on safer ground if there's something special about the location. Lake front or beach front property seems to almost always be in demand and it's limited in availability. But long-term pricing isn't guaranteed in all cases. Some lakes have shrunk and beach front in some areas has become less attractive because of hurricanes. Property near a theme park, one within a reasonable distance of a major city, those with a great view, will do better than run-of-the-mill properties. While there's a good chance you'll see price appreciation, in many cases you shouldn't consider it an investment. Generate rental income to offset costs? Again, much depends on the property. There are homes in the Hamptons that rent for the season for what it costs to buy a nice house in Ohio; there are other locations where you'll be lucky to do much more than cover a portion of your real estate tax bill. Get good advice before buying. That's doubly important if you'll need any of the rental income to make the mortgage payments.
October 17, 2018
NewsThe IRS extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Michael in the counties of Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Holmes, Jackson, Jefferson, Leon, Liberty, Madison, Suwannee, Taylor, Wakulla and Washington in Florida. The extension applies to deadlines--either an original or extended due date--that occurred on or after Oct. 7, 2018 and before Feb. 28, 2019. Deadlines were also extended for certain taxpayers affected by Hurricane Michael in the Georgia counties of Baker, Bleckley, Burke, Calhoun, Colquitt, Crisp, Decatur, Dodge, Dooly, Dougherty, Early, Emanuel, Grady, Houston, Jefferson, Jenkins, Johnson, Laurens, Lee, Macon, Miller, Mitchell, Pulaski, Seminole, Sumter, Terrell, Thomas, Treutlen, Turner, Wilcox, and Worth. The extension applies to deadlines--either an original or extended due date--that occurred on or after Oct. 9, 2018 and before Feb. 28, 2019. Personal casualty losses attributable to certain 2018 federally declared disasters, including Hurricane Michael, may be claimed as a qualified disaster loss.
The IRS has published an expanded list of counties where victims of Hurricane Florence will receive IRS relief in the form of extended deadlines. The states and counties include:
North Carolina counties: Allegany, Anson, Ashe, Beaufort, Bladen, Brunswick, Cabarrus, Carteret, Chatham, Columbus, Craven, Cumberland, Dare, Duplin, Granville, Greene, Harnett, Hoke, Hyde, Johnston, Jones, Lee, Lenoir, Montgomery, Moore, New Hanover, Onslow, Orange, Pamlico, Pender, Person, Pitt, Randolph, Richmond, Robeson, Sampson, Scotland, Stanly, Union, Wayne, Wilson, and Yancey.
South Carolina counties: Berkeley, Charleston, Chesterfield, Darlington, Dillon, Dorchester, Florence, Georgetown, Horry, Marion, Marlboro, Orangeburg, Sumter, and Williamsburg.
Virginia counties: Henry, King and Queen, Lancaster, Nelson, Patrick, Pittsylvania, and Russell counties and the Independent Cities of Newport News, Richmond, and Williamsburg.
The IRS, in response to shortages of undyed diesel fuel caused by Hurricane Michael, will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in emergency response vehicles in the State of Florida. This relief is effective as of October 12, 2018. Consistent with the Environmental Protection Agency (EPA) limited waiver for Florida regarding use of Non-Road Diesel Locomotive and Marine Fuel for use in emergency response vehicles, this relief will remain in effect through October 26, 2018. For more information, go to IRS announces waiver of dyed fuel penalty in Florida .
The IRS has provided temporary relief from certain requirements of the Code to allow owners and operators of low-income housing projects located anywhere in the United States and its territories to provide temporary emergency housing to individuals who are displaced by a major disaster from their principal residences, regardless of income. This special relief, detailed in Revenue Procedure 2014-49 and Revenue Procedure 2014-50, authorizes owners and operators, in conjunction with agencies and issuers, to disregard the income limits, transience rules and certain other restrictions that normally apply to low-income housing units when providing temporary emergency housing to displaced individuals. For more information, go to Low income housing units may be offered to victims of hurricanes.
Tip of the DayState taxes and the new law . . . Everyone has been talking about the changes in federal tax law. But state taxes can still add up to a significant amount. And, depending on where you live, you may still be concerned with items that are no longer deductible on your personal return. For example, New York and California have been allowing the same deductions as on your federal return, except for the deduction for state and local income taxes. Thus, the $10,000 limit on taxes and the elimination of deductions for unreimbursed business expenses, etc. don't apply in those states. On the other hand, Massachusetts doesn't allow the deductions most individuals take--real estate taxes, mortgage interest, etc. And, if you've got a business, other than a C corporation, more than a few states limit bonus depreciation and the federal deduction limit on the Section 179 expense deduction. Keep abreast of the rules in your state.
October 16, 2018
NewsThe IRS has announced proposed rulemaking proposes to streamline IRS regulations by removing regulations (REG-104872-18; NPRM REG-104872-18) that are no longer necessary after the enactment of recent tax legislation. Specifically, these regulations would remove existing regulations regarding advance payments for goods and long-term contracts. The regulations would affect accrual method taxpayers who receive advance payments for goods, including those for inventoriable goods.
The IRS has issued proposed regulations (REG-118826-16; NPRM REG-118826-16) relating to penalties for failure to file correct information returns or furnish correct payee statements. The proposed regulations contain safe harbor rules that, for penalty purposes, generally treat as correct payee statements or corresponding information returns that contain errors relating to de minimis incorrect dollar amounts. They prescribe the time and manner in which a payee may elect not to have the safe harbor rules apply. They also update penalty amounts and update references to information reporting obligations. Finally, they provide rules relating to the reporting of basis of securities by brokers as this reporting relates to the de minimis error safe harbor rules. The proposed regulations affect persons required to either file information returns or to furnish payee statements (filers), and recipients of payee statements (payees).
The IRS has announced that as of October 15th, e-Services users attempting to enter their accounts will see a pop-up asking that users accept the terms of the updated user agreement. The terms of the user agreement must be accepted to continue accessing e-Services account and tools. The IRS announced this change in September and provided e-Services users with a preview of the changes. Users can find the link on the e-Services landing page, www.irs.gov/eservices.
Tip of the DayContributions to IRAs . . . You can't make contributions to a traditional IRA (deductible or nondeductible) as long as you (or your spouse) have taxable compensation and weren't age 70-1/2 by the end of the tax year. The compensation requirement also applies to a Roth IRA, but the age limit doesn't. Making contributions to a Roth can make sense if you're still working and don't need the cash. There's no deduction for the contribution and an income limit (based on modified adjusted gross income) applies. If you're over 70 you may not get that much "bang for your buck", but the growth will escape taxation and the amounts left to your heirs.
October 15, 2018
NewsThe IRS extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Michael in the counties of Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Jackson, Jefferson, Leon, Liberty, Madison, Suwannee, Taylor, and Wakulla in Florida. The extension applies to deadlines - either an original or extended due date - that occurred on or after Oct. 7, 2018 and before Feb. 28, 2019. Personal casualty losses attributable to certain 2018 federally declared disasters, including Hurricane Michael, may be claimed as a qualified disaster loss.
The IRS has announced that the Return Preparer Office will open PTIN (Preparer Tax Identification Number) renewal season this week. However, some PTIN holders already received an email this week inviting them to renew early. The IRS will be issuing more information on the renewal season. Separately, the Return Preparer Office is encouraging all non-credentialed PTIN holders to consider participating in the Annual Filing Season Program or to become an Enrolled Agent.
Tip of the DayExtended 1040 returns due . . . This is it. Last day to file your 1040. What should you do if you almost everything but you're missing a 1099 from the bank or broker or you're missing a K-1? Talk to your tax adviser, but rather than not file you should use a reasonable approach to estimate the missing amount(s), use that to file and file an amended return later. That's especially true if you still owe money with the return.
Copyright 2018 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536