Nexus is no longer what we've become used to over the years. When thinking of income tax nexus, tax preparers so often asked themselves the questions: "Do I have property or payroll in the jurisdiction?"
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On September 27, 2010, the President signed into law H.R. 5297, the Small Business Lending Jobs Act of 2010 (the Act, P.L. 111-240), which includes a number of important tax provisions for businesses large and small, and changes for individuals as well. The vast majority of these provisions are effective retroactively and have an immediate impact on the 2010 tax year.
On September 24, 2010, the IRS released the final version of Schedule UTP - the form taxpayers must use to report their uncertain tax positions - and related instructions.
In anticipation of a future possible IRS Examination, many taxpayers will ask "should our company make an aggressive or higher claim than what is proper?" Many think that when the IRS examines the claim, they will decrease the refund or increase the tax, regardless of the situation, in order to complete the audit.
Proposed regulations (NPRM REG-153340-09) eliminate the rules for making federal tax deposits by paper coupons for businesses of any kind that make payments to the IRS. Instead, most taxpayers or taxpaying businesses will use the Electronic Federal Tax Payment System (EFTPS).
On August 10, 2010, the Education and Jobs Act (Act) was signed into law by the president. The act contains provision for foreign tax credits, individual credits, pension funding, disclosure of tax return information, excise taxes and other miscellaneous provisions.
With the release of Announcement 2010-30, the IRS made it pretty clear they're serious about requiring certain corporations to include in their tax returns a schedule reporting all their uncertain tax positions ("UTPs"). The announcement included Instructions to the Schedule UTP and a draft Schedule UTP, which is required to be filed beginning with the 2010 tax year (i.e. 2011 filing season).
Many times companies will simply include all the wages, supplies and contract expenses of their designated R&D Department(s) into their R&D Credit calculation and "be done" with it. And though this might be a good way to estimate or guess the credit possibility from a high-level perspective, it is not a good way to make an accurate claim.