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​ IRS guidance on expensing property and depreciation deductions

The IRS issued a revenue procedure clarifying certain taxpayer-friendly PATH Act provisions enacted at the end of 2016.

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$500M Hit from a Tax Provision Misstatement

Williams Cos., an interstate gas-pipeline asset-holder, has become the latest poster child for what can go wrong if a company is not focused on its tax provision. Failure to properly account for deferred tax liabilities from its investment in a limited partnership due to material weakness in internal controls resulted in the public company restating its 2011 financial results.

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'Extenders' Package a Done Deal

'Extenders' package signed in law.

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'Patent box' tax break gaining some support in U.S. Congress

A proposed corporate tax break on profits derived from research and development done in the United States is winning some bipartisan support in Congress, with the promise that it could spur jobs and innovation. A "patent box" tax break is in the policy mix as lawmakers target full-scale tax reform in 2013.

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[Resources] Business owners eager to avoid unpleasant tax surprises

Another great year presenting to engaged and energetic business owners and entrepreneurs at Denver Startup Week! If you weren't one of the 18,885 people who attended this year, here's the resources you missed.

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[Testimony] Reviving the economic engine of American entrepreneurship

Scott Hodge, president of the Tax Foundation, advocated on behalf of startups and small businesses before the Joint Economic Committee for tax reform, calling for measures that help revive the economic engine of American entrepreneurship.

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[White Paper] Caterpillar’s Congressional Testimony Highlights Transfer Pricing Risks

Sharpen your transfer pricing compliance knowledge with our latest white paper, a series of FAQs on many hard-to-crack issues related to transfer pricing by Stu Myhill, leader of TaxOps' International Tax Practice.

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1099 Repeal is Signed into Law

On April 14, President Barack Obama sealed the fate of 1099 requirements. Taxpayers say good riddance to what was generally seen an over-burdensome reporting requirements.

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1099 Repeal Marching Along

Earlier this month, the House of Representatives pushed 1099 repeal forward by passing the chamber's version of a bill that would eliminate information reporting requirements mandated by last year's health care legislation.

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1099-K Forms in the Mail This Month

Many small businesses that accept credit cards as payment or accept payment from a third-party settlement organization, such as PayPal, may be receiving 1099-Ks this month. The 1099-K is new as of Jan. 1, 2012. Payment settlement entities (PSE) and third-party PSEs are sending out 1099-K forms to companies that receive payments from credit cards or third-party settlement agencies; a similar report is sent to the IRS.

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5 reasons separating audit from tax services drives better tax outcomes

Regulators tend to frown on accounting firms doing taxes for companies they audit, according to a 2016 study published in The Accounting Review. When are businesses best served by separating audit and tax?

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8 significant tax regulations singled out for modification under Executive Order

The Treasury Department review is complete. Now Treasury is asking for your opinion on the eight regulations they have singled out for modification or elimination.

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Absence of Partnership Liability Precludes Partner Increase in Basis

U.S. Tax Court holds that a partner’s personal guaranty of a lease entered into by his wholly-owned corporation does not increase the partner’s partnership tax basis.

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Accrual Accounting Proposal Gets Attention of U.S. Senators

The U.S. Senate is fired up about preserving the cash method of accounting.

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Act Fast on Bonus Depreciation for 2014

Accelerate write-offs with these bonus depreciation limits in 2014.

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Application Form for the Therapeutic Discovery Project Tax Credit has just been Released!

Qualified personal service corporations cannot use these graduated tax rates...

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Avoid Restatements and Material Weaknesses Related to ASC 740

Learn the keys to ASC 740 compliance with TaxOps Insights and practical solutions.

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Bottom-dollar Guarantees Still Available Despite Proposed Changes

The IRS is still weighing whether to eliminate the tax advantages of bottom-dollar guarantees in partnership arrangements, leaving taxpayers free to continue using the practical tax planning strategy.

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Burger King and Buffett Shed Light on Need for U.S. Tax Reform

Inversions a symptom of the larger problem in the U.S. tax code.

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Bush era tax cut extensions central to election year debates

President Barack Obama and Republican challenger Mitt Romney's views on the extension of Bush-era tax cuts differ along predictable party lines. While Obama pushes for a narrower tax cut extension for all but the wealthy, Romney would extend the Bush-era tax cuts to all income earners.

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Business Standard Mileage Rate Unchanged for 2012

The IRS recently issued standard mileage rates for 2012. These optional rates are for taxpayers to use when calculating deductible automobile costs for business use, for medical or moving purposes, and for service to charitable organizations.

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Businesses aren't treated equally under GOP tax reform proposal

What would the Republican framework for corporate tax reform do for you?

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Businesses to Benefit from “Fiscal Cliff” Legislation Extensions

President Barack Obama signed into law a bill passed by Congress to avert the “fiscal cliff” of tax increases and spending cuts. The legislation extends tax cuts for incomes below $400,000 per individual or $450,000 per family.

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Business-issue Cell Phones No Longer an Employee Fringe Benefit

The IRS has taken employer-issued cell phones off its list of employee fringe benefits with tax implications. Prior to the IRS guidance issued earlier this week, the IRS classified employer-issued cell phones as a taxable benefit.

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Certain FATCA Deadlines Put Off Again

More time allowed for certain provisions under temporary regulations.

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CFOs Hate the Corporate Rate

On Capitol Hill and in a new CFO survey, finance chiefs say they want a lower overall corporate tax rate and a simpler tax code.

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CFOs losing sleep over financial reporting

Manual checks and balances, excel spreadsheets, and more upset the slumber of CFOs.

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Claim Significant Deductions and Credits Before They Run Out

Take advantage of tax savings before it is too late.

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Clarity for Electing Certain Start-Up Deductions Issued in Final Regulations

The IRS has issued final regulations on the election to deduct startup expenses (Code Sec. 195), corporate organization expenses (Code Sec. 248), or partnership organization expenses (Code Sec. 709). The regulations reflect changes made to these provisions by the American Jobs Creation Act of 2004 (P.L. 108-357), and increases to allowable deductions found in the Tax and Pension Provisions of the Small Business Jobs Act of 2010 (P.L. 111-240, 9/27/2010).

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Companies Spend More on R&D When Credits are Available, According to a Penn Wharton Brief

Wharton School of Business brief confirms that R&D expenditures vary based on tax subsidy rate.

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Companies Taxed with 270 Changes in Q2

Accounting Today editor-in-chief Michael Cohn highlighted the hefty burden of tax change in an article dated August 8, 2011. Based on the ONESOURCE Indirect Tax Report from Thomson Reuters, multinational tax functions had a particularly busy second quarter 2011 dealing with 270 domestic and international tax changes.

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Competing Carried Interest Proposals Lead to Different Tax Rates for Partners

A rundown of three of the latest carried interest proposals and their impact on partnership tax treatment.

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Congress Enacts Returning Heroes and Wounded Warrior Tax Credits

On November 21, 2011, the President signed into law two new tax credits. The Returning Heroes Tax Credit is a new hire tax credit.

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Congress Not Behind President's Tax Proposals: Are You?

President Obama's recent tax proposals are unlikely to be approved by Congress in 2011 or 2012, Peter M. Kravitz, director of Congressional and Political Affairs, American Institute of Certified Public Accountants (AICPA) said on September 23. Kravitz, speaking during a webcast sponsored by the AICPA, added that the fate of many soon-to-expire tax extenders is also up in the air.

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Convergence likely to push lease accounting onto the balance sheet

Accounting for lease contracts is undergoing an overhaul as part of ongoing convergence projects being conducted by FASB and IASB. In the process, the Boards are addressing some of the criticisms of the current treatment, one of which has operating leases accounted for as off-balance sheet transactions.

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Corporate Income Tax Rates around the World, 2017

The Tax Foundation updates worldwide tax rates, highlighting just how out of sync the U.S. is with other industrialized and developing countries.

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Corporate rates for small businesses

At a time when legislators are considering tax reform that includes a drop in corporate rates, news that more "small businesses" may fall under corporate tax rates formerly reserved for C corps could mean an effective tax hike for all but the smallest businesses.

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Corporate Tax Reform Should Extend to Small Businesses

If small businesses are truly the engine for growth, any effort by Congress at corporate tax reform must specifically factor in tax breaks for small businesses to keep the economic recovery on track. Congress' prior efforts at corporate tax reform, and efforts to help small businesses specifically, have often fallen short because they do not extend to non-corporate entities.

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Cost Segregation Deductions Make Ownership More Affordable

Cost segregation may make ownership more affordable than long-term leasing.

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Countdown to October 15 Filing Deadline is (Still) On

The October 15 deadline is still in force despite the federal government shutdown.

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Country-by-country reporting goes online

IRS launches country-by-country reporting pages on IRS.gov.

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CRS report examines profit shifting by U.S. multinational corporations

A recent Congressional Research Service (CRS) report, “An Analysis of Where American Companies Report Profits: Indications of Profit Shifting” (R42927, Jan. 18, 2013), suggests that U.S. multinationals are shifting profits to relatively lower tax havens to lower jurisdictional tax obligations.

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CRS Report Identifies Devices Subject to Medical Device Excise Tax

A recent Congressional Research Service report summarizes some medical device excise tax rules and explains which devices are subject to the tax.

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CRS Report Informs Congressional International Corporate Tax Debate

CRS publishes further data to inform the corporate tax base erosion and profit shifting debate as Congress considers what, if any, action to take to curb profit shifting.

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Current Status on the Research Credit

President Obama announced an agreement on December 6th with GOP lawmakers to extend the Bush-era tax breaks to all Americans. As part of this framework, the Research Credit was specifically identified and slated to have a two year extension (1/1/2010 - 12/31/2011).

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Deadline approaching to inform employees about the Earned Income Credit

The IRS has issued a December 2011 version of Notice 1015, Have You Told Your Employees About the Earned Income Credit (EIC)? The EIC is a refundable tax credit for certain low-income workers. The credit is intended to offset living expenses and Social Security taxes paid. Eligible employees claim the credit on their personal income tax returns.

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Discarded Discovery Test Benefits Corporate Taxpayers

Eight months after an appellate court ruled against the IRS, the decision of the appeals court to keep research activities defined broadly still stands. In the case of the United States vs. McFerrin, the appeals court found that the district court erred by using an unlawful "discovery test" to determine the threshold of innovation basis for R&D credit.

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Disclosure of Payments by Mining Companies, Energy Producers Approved

The SEC approved long-awaited rules requiring oil, gas and mining companies to disclose payments made to governments to commercially develop resources as mandated by the Dodd-Frank Act (Sec. 1504 of PL111-203).

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DOL’s overtime rule lands in limbo — for now

Uncertainty over the DOL overtime rule may cause planning problems for employers. Learn why.

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Double-taxation Implications in Choosing and Changing Form of Business

Key tax matters factoring into the selection of a legal form of business.

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Education and Jobs Act Signed into Law

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.

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Effective date of tangible property regulations delayed

The Internal Revenue Service has amended the temporary regulations governing tangible property expenses to delay their effective date.

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Efforts to Repeal Medical Device Excise Tax Rekindled

Medical device excise tax still on the books despite bipartisan support for repeal.

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Electronic delivery of Schedules K-1s

The IRS issued Rev. Proc. 2012-17 outlining when and how a partnership may use electronic media as the sole mechanism for delivering K-1s to its partners. The new rules apply to Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc., that are provided to partners in electronic format on or after February 13, 2012.

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E-mail Scam Targets Tax Professionals

On July 8, 2011, the IRS has issued a phishing scam alert to taxpayers regarding schemes that use the agency's name, logo or website clone to gain access to individuals' financial information for purposes of identify or asset theft. The latest scam involves a malicious e-mail, which claims to come from the IRS Tax Forums, that requests recipients register for an event for tax professionals by using an attached registration form.

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Employee or contractor, what you should know before you start paying someone

It seems like every year we have the discussion with one or two of our clients whether someone is an employee or independent contractor. I also see court cases each year where someone was not categorized properly by the taxpayer (usually treating them as a contractor rather than an employee).

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Examination Guidance on Domestic Production Activity Deduction Definition

An IRS directive to examiners clarifies activities that meet the "manufactured, produced, grown, or extracted" definition.

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Executive pay high on IRS audit list

The Internal Revenue Service is eying executive pay in their ever expanding efforts to raise more revenue from corporate taxpayers. Experts warn that areas such as deferred compensation, restricted stock, and severance packages are expected to come under closer IRS scrutiny.

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Expanded NOL carryback provisions

Recently enacted legislation allows all U.S. companies to carry back net operating losses incurred in either 2008 or 2009 to the previous five years. The carryback can offset 50% of the taxable income in the fifth carryback year, and 100% of taxable income in the first four carryback years.

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Expanded R&D Tax Credit Extender Clears Senate Finance

A number of key tax extenders are making their way through Congress.

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Expanding abroad, now what?

Slash international tax bills and improve the success of overseas ventures with International Tax Specialist Stu Myhill's insightful tips for managing taxes around the world.

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Expense or Capitalize? Accounting for Repairs and Improvements

See beyond the complexity of new tangible property rules to the tax-saving benefits available now.

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Expenses Deductions: Reasonable Compensation of Closely Held Company Management

A June 2010 Tax Court decision, Multi-Pak Corporation v. Commissioner, reaffirmed the factors used in determining whether compensation paid to a shareholder-employee is reasonable and therefore deductible. The significance in properly determining what qualifies as reasonable compensation is important for compensation planning.

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Extension of Research Tax Credit Expected

Congress routinely has renewed the federal research and development tax credit in the past and is expected to do so again following the credit's expiration at the end of 2013. Companies that typically claim the credit can expect some disruption to their research credit practices during the expiration period.

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Fact Sheet summarizes FBAR and Foreign Financial Assets Filing Requirements and Penalties

The IRS has released a fact sheet that summarizes information about federal income tax return and Report of Foreign Bank and Financial Accounts (FBAR) filing requirements, how to file a federal income tax return or FBAR, and potential penalties for failing file or pay tax. The filing requirement for foreign financial assets is also clarified.

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FAQ describes level of detail required in reporting R&D costs on Form 1120 Schedule M-3

IRS has posted a Frequently Asked Question (FAQ) on its Large Business & International (LB&I) M-3 webpage. The FAQ addresses the level of detail required on the attachment to the 2010 Schedule M-3 for Research and Development (R&D) costs.

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FASB narrows vision of a “business”

FASB’s efforts to simplify accounting used in a business combination is expected to reduce the number of entities characterized as a “business.”

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FASB Simplification for Private Companies With Intangible Assets

A FASB update for business combinations exempts private companies from having to determine the value of certain intangible assets when they buy or merge with another company.

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FATCA Audits, FAQS and Final Rules

Transparency and reporting obligations ratchet up in 2015 for multinational subject to the U.S. provisions for FATCA.

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FATCA Delay Provides Relief

The IRS has modified the timelines for withholding agents and foreign banks to comply with the due diligence requirements under the Foreign Account Tax Compliance Act, thereby providing taxpayers and preparers with a window of relief.

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FATCA enforcement ahead

Efforts to repeal the so-called 1099 provision buried in the health care reform act are well underway. The provision was designed to help finance the expansion of health insurance coverage by identifying vendors that are underreporting their income and not paying taxes that are due to the federal government.

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FATCA final regulations address phased-in due diligence and compliance

The U.S. Treasury Department and the IRS have released final regulations on the Foreign Account Tax Compliance Act (“FATCA”). Beginning in January 2013, FATCA requires U.S. and Foreign Financial Institutions (FFIs) to annually identify and report their U.S. account holders.

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FATCA implementation underway at the IRS

The Internal Revenue Service has taken some initial steps to implement the Foreign Account Tax Compliance Act, but it still has a long way to go, according to a new government report. Part of the HIRE Act of 2010, FATCA was enacted to improve tax compliance and bring in tax revenue from Americans with previously unreported foreign bank accounts and other assets.

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FATCA on Fast Track Now

The implementation of the Foreign Account Tax Compliance Act is well underway with several new developments.

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FATCA tax development planning

The IRS issued proposed FATCA regulations February 8, 2012 with respect to the new 30% withholding regime on certain payments made to Foreign Financial Institutions (“FFIs”) and Non-Foreign Financial Institutions (“NFFEs”) that do not enter into an agreement with the IRS.

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FATCA Withholding Requirements Delayed Six Months

Further FATCA delays give companies more time to figure out or get help with compliance for the offshore tax rule.

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FBAR Deadlines Looming for Some; Others Receive Filing Reprieve

Despite recent guidance that carves out limited exceptions, many Report of Foreign Bank and Financial Accounts (FBARs), Form TD F 90-22.1, for calendar year 2010 are still due by June 30, 2011. FBARs must be received by the Department of the Treasury in Detroit by June 30, 2011 in order to be considered timely filed.

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FBAR Filing Deadline Extended for Certain Financial Professionals

The IRS and the Financial Crimes Enforcement Network (FinCEN) have issued an extension for individuals with only signature authority that are required to file the Report of Foreign Bank and Financial Accounts (FBARs). These individuals will receive a one-year extension beyond the upcoming filing date of June 30, 2011.

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FBARs Can Now Be Filed Electronically

Filers of the Report of Foreign Bank and Financial Accounts (known as the "FBAR") now have the option to file Form TD F 90-22.1 electronically, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) announced on July 18. Previously, the FBAR could only be filed on a paper return.

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Federal and State Differences Put Small Businesses at a Disadvantage

A new Tax Foundation report examines how states handle first-year expensing on capital investments differently.

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Federal Bill Would Close Online Sales Tax Loophole

If number of bills is any indication, Congressional will for federal sales tax legislation is alive and well. On November 9, 2011, the third of three federal bills that would authorize states to require remote retailers to collect sales taxes on sales to in-state customers was introduced in Congress.

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FedEx R&D Credit Settlement Has Broad Ramifications for IT Investment

Businesses investing in IT development may benefit from a recent IRS research tax credit settlement with Federal Express.

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Fewer corporate tax audits a welcome cutback

The Internal Revenue Service is expecting to reduce audits of large business in the current fiscal year.

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Filing Electronic K-1s Comes with To-do List for Partnerships

The IRS issued Rev. Proc. 2012-17 a year ago in February 2012 providing procedures for furnishing substitute Schedules K-1 in electronic format. A partnership may furnish Schedules K-1 electronically rather than on paper if certain requirements are met:

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Final and Proposed Regulations on Partnership "Varying Interest" Regulations

The IRS issued final regulations determining a partner's distributive share when a partner's interest varies and modifying partnership tax year requirements. The IRS contemporaneously issued related proposed regulations.

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Final controlled group regulations clarify deferred loss recognition

The Treasury Department and IRS have issued final regulations providing guidance on the deferral of losses on the sale or exchange of property between members of a controlled group. The final regulations retain the rules set out in the proposed regulations issued in April of last year, with some with small clarifying changes.

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Final Regulations Address Substantial Business Activities Test for Corporate Inversions

Final regulations retain the bright-line rule for an EAG's substantial business activities as well as guidance on determining corporations that are members of an EAG.

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Final Regulations Alter Section 382 Segregation Rules for Small Shareholders

Certain small shareholders of public groups fall under new Section 382 segregation rules.

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Final Regulations Clarify 50% Limit on Meal and Entertainment Expenses

The IRS issues final regulations clarifying which party is subject to the 50 percent limit on deductible meal and entertainment expenses under Sec. 274.

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Final regulations revise election to avoid taking intercompany item after liquidation

IRS has issued final regulations under Code Sec. 1502 modifying the election under which a consolidated group can avoid immediately taking into account an intercompany item after the liquidation of a target corporation. The final regulations implement changes that were necessary as a result of regulations under Code Sec. 368 that were issued to address transfers of assets or stock following a reorganization.

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Finance Panel Approves Tax Extenders Bill

The Senate Finance Committee on August 2 approved, by a bipartisan vote of 19 to 5, a $205-billion package of expiring tax breaks, but the measure faces an uncertain future on the Senate floor and in the Republican-controlled House. The modified Family and Business Tax Cut Certainty Bill of 2012 would protect taxpayers from the alternative minimum tax (AMT) for two years, and extend the research and development credit for the same period of time.

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FinCEN announces further extension of time for certain FBAR filings

The Financial Crimes Enforcement Network (FinCEN) announced a further extension of time for certain Report of Foreign Bank and Financial Accounts (FBAR) filings in light of ongoing consideration of questions regarding the filing requirement and its application to individuals with signature authority over but no financial interest in certain types of accounts.

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Fiscal Cliff and AMT Patch – What does the Shorthand Mean Anyway?

As Congress and the Administration attempt to address pressing issues before year-end, two ley terms are being bandied about in the press – fiscal cliff and AMT patch.

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Five Business Tax Issues to Tackle by Year-end 2014

Tax savings come to those who plan. The time is now to make sure your company is acting on available tax-saving measures.

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Five ideas to simplify the individual tax code

Tax reform ideas lawmakers can use to give time back to taxpayers from the Tax Foundation.

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Foreign subsidiary tax filings (Form 5471): avoid the $10,000 penalty

Effective January 1, 2009, the IRS has started to automatically assess a $10,000 penalty for each late filed Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The penalty has been on the books for years, but has rarely been enforced. Now, in order to encourage greater compliance, the IRS is automatically assessing a $10,000 penalty for each Form 5471 that is filed late.

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Gain on Qualified Small Business Stock Eligible for 100% Exclusion

On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010. The Act contains a number of significant tax provisions that are intended to benefit small businesses.

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GAO finds duplication in foreign account reporting impacts taxpayers

The Government Accountability Office (GAO) found that the Internal Revenue Service's (IRS) Form 8938 and the Report of Foreign Bank and Financial Accounts, or FBAR, are "duplicative," often asking for the same or similar information. The two forms ask for similar information about the individual filer, foreign financial accounts, and financial institutions where accounts are held.

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GAO report sheds light on value of corporate tax incentives

Corporations paid about as much in taxes in 2011 as they received in tax breaks, according to a new report from the Government Accountability Office. The GAO analysis found that corporations reduced their tax bill by roughly $181.4 billion in 2011 – mostly through the use of accelerated depreciation of machinery and equipment and deferral of income from controlled foreign corporations.

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Get Going with Tax Planning Before Going Public

Facebook’s post-IPO drop in stock price sheds light on the need for smart tax planning in advance of a public debut.

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Get the Answers for Taming Transfer Pricing Risk

Avoid the many pitfalls of noncompliance by proactively managing your transfer pricing policy to rein in risk. Learn more here.

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Getting the Most Out of Net Operating Loss Limitations

Proactively manage net operating loss and tax credit carryforwards following changes in ownership to get the most out of Section 382 limitations.

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Good News for S Corporations

During the past year, several tax law and administrative changes have affected S corporations and their shareholders. According to a report published by Stewart Karlinsky and Hughlene Burton (October 1, 2011), these changes include:

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GOP’s proposed tax reform plan significantly changes the rules for businesses and individuals

Tax reform framework offers an outline; details to be fleshed out in congressional committees.

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Got Nexus? Learn to be SALT Compliant

Tap into expert insight with these Frequently Asked Questions on SALT compliance.

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Growing U.S. Manufacturing Sector Benefits from Tax Incentive

The U.S. manufacturing industry is expected to expand this year, according to a recent survey released by manufacturing analysts MFG.com.

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Has pending sunset of tax benefits affected your business?

Further extending the Bush era tax breaks would come at the high price tag of $2.84 trillion over ten years, according to estimates by the Congressional Budget Office. Mandatory federal spending reductions and budgetary restraints complicate the chances of further extensions, while election year politics add even greater uncertainty.

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Headlines reporting U.S. as a “low-tax” nation are misleading

Scott Hodge at The Tax Foundation responds to the OECD revenue statistics identifying the U.S. as a low-tax nation with an analysis of how a single statistic only tells part of the story.

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Historic Supreme Court decision has biting tax implications for businesses

On June 28, the U.S. Supreme Court issued its long-awaited landmark decision on the Patient Protection and Affordable Care Act (PPACA) and its companion law, the Health Care and Education Reconciliation Act (HCERA). In a 5 to 4 decision, the nation's highest court upheld the law - except for one Medicaid provision involving state funding.

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House and Senate tax bills head to reconciliation

The Tax Cuts and Jobs Act takes another step toward becoming law.

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House Vote is Big Movement Toward a Permanent R&D Credit

A permanent R&D credit would accelerate investment in U.S. research activities.

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House Votes To Repeal Medical Device Tax

Bipartisan support in the House is strong for repealing the 2.3 percent tax on medical device makers.

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House Votes to Retroactively Renew Research Credit and Other “Tax Extenders”

Research credit extension passes House; awaiting Senate action.

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How much does a lap dance really cost?

Provisional certificate of money at strip clubs is subject to sales tax. Who knew?

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HP gross receipts include non-sales income for R&D tax credit

In a ruling dated September 24, 2012, the Tax Court held that Hewlett-Packard (HP) must include non-sales income, such as dividends, interest and rent, when calculating gross receipts for purposes of the R&D credit.

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Identity theft tops IRS’s “Dirty Dozen” tax scams

The IRS issued its annual “Dirty Dozen” Tax Scams for 2013 highlighting the most egregious tax fraud schemes.

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Infographic: 10-Steps to ASC-740 Compliance

Subject matter expert John Monahan breaks down the complex rules to 10 quick-start steps to achieving ASC-740 compliance.

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Infographic: Tangible Property Regulations ~ Compliance and Tax Savings 2014

Every business that owns or rents property is subject to tangible property regulations, regardless of size or entity type. Avoid missteps by properly accounting for repairs and improvements.

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Interest Is Not Preliminary Activity For Bonus Depreciation Safe Harbor

In a recently-released private letter ruling, the IRS has determined that capitalized interest is not a preliminary activity for purposes of a safe harbor under bonus depreciation.

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International Tax Strategies for Cross-border Expansion

The international tax landscape is complex. Help cut tax obligations and keep your business compliant with these tax strategies from industry-leading expert Stu Myhill.

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IRS abandons tiered issue process

The Internal Revenue Service has announced the end of its tiered issue process, under which issues of high strategic importance or those that represented significant compliance risks were prioritized as Tier I, II, or III and handled in a coordinated way by the IRS's Large Business and International Division.

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IRS Announces 2-year FATCA Enforcement Transition Period

Lighter FATCA enforcement expected during 2014 and 2015.

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IRS announces new examination process for large and mid-size business taxpayers

In a new publication on its website, "Publication 4837 - Achieving Quality Examinations through Effective Planning, Execution and Resolution," IRS has announced the implementation of the Quality Examination Process (QEP) - "a systematic approach for engaging and involving Large and Mid-Size Business (LMSB) taxpayers in the tax examination process, from the earliest planning stages through resolution of all issues."

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IRS Changes Filing Requirements for Large Corporations and Partnerships

The IRS announced that it is making changes to the filing requirements for corporate and partnership taxpayers with assets of between $10 million and $50 million in an effort to simplify and reduce filing burden.

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IRS Changes Standard Mileage Rates Slightly in 2015

Notice 2014-79 sets 2015 optional standard mileage rates and basis reduction amounts.

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IRS Clarifies Cancellation of Debt Income for Partnerships and S Corporations

The IRS issued final regulations providing guidance on the elective deferral of cancellations of debt income and on original issue discount deductions by a partnership or an S corporation that reacquired applicable debt instruments in 2009 and 2010 under Sec. 108(I).

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IRS clarifies who is subject to 50% limit on meal deductions

The Internal Revenue Service issued proposed regulations to clarify which party is subject to the 50% limit on deductions for meals when an employee or independent contractor is reimbursed under an expense allowance arrangement (Reg-101812-07). The proposed regulations note that only one party is intended to be subject to the limitation and will permit taxpayers in multiparty arrangements to agree who will be subject to the limitation.

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IRS Closing the Underpayment Gap with Schedule UTP

In September of 2006, pharmaceutical giant GlaxoSmithKline agreed with the IRS that it had underpaid taxes for prior years totaling approximately $3.4 billion in taxes and interest. While the scale of this particular example may be unusual, underpayments of tax in the millions of dollars are common occurrences when talking about large corporations, trusts, partnerships, and wealthy individuals.

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IRS delays global tax evasion FATCA deadlines

The IRS is delaying various Foreign Account Tax Compliance Act (FATCA ) deadlines because it has received feedback that complying with the original deadlines and other requirements is proving to be impractical for some taxpayers (Announcement 2012-42).

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IRS eliminates Form 5500 proposed notices for untimely filed or incomplete filings

Beginning Jan. 1, 2013, the IRS stopped sending certain proposed penalty notices based on an employer’s late or incomplete filing of Form 5500, Annual Return/Report of Employee Benefit Plan.

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IRS eyes small and mid-size businesses for audits

IRS is focusing greater resources on small- and mid-size businesses ($10 million to $250 million in assets). Pre-filing agreements with large business taxpayers account for some of the shift. According to Forbes Contributor Dean Zerbe:

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IRS FAQs explain employers' withholding obligations for post-2012 additional Medicare tax

IRS has released new guidance, in question and answer (Q&A) format, on the 0.9% additional Medicare tax scheduled to go into effect in 2013.

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IRS final regulations issued on reporting employment tax liability

IRS has issued final regulations giving qualifying employers the option of filing an annual (instead of a quarterly) return reporting their employment tax liability (Social Security, Medicare, and withheld federal income tax). The final regulations permit certain employers to annually file a Form 944, Employer's Annual Federal Tax Return, rather than quarterly filing Form 941, Employer's Quarterly Federal Tax Return.

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IRS final regulations on treatment of overall foreign and domestic losses

IRS has issued final regulations relating to the recapture of overall domestic losses under Code Sec. 904(g), enacted as part of the American Jobs Creation Act of 2004 ( P.L. 108-357). The regulations also provide updated guidance with respect to overall foreign losses and separate limitation losses and can impact the amount of a taxpayers' foreign source income.

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IRS Finalizes Simplified Credit Calculation for Controlled Group Members

The final rule makes the research tax credit easier to calculate and claim on the controlled group members' tax returns.

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IRS Flooded with 12,000 Voluntary Offshore Account Disclosures

The Internal Revenue Service push to end offshore tax evasion is netting tax offenders of their own free will. On September 15, the IRS announced receipt of a total of 12,000 new applications under its 2011 voluntary disclosure program of offshore bank accounts.

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IRS Foreign Asset Reporting Guidelines for this Filing Season

The Internal Revenue Service has issued temporary and proposed regulations for individuals required to disclose on their tax return information on foreign financial assets in which they have an interest. While effective for tax years ending after Dec. 19, 2011, taxpayers can apply them to earlier years.

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IRS guidance on the election of grants over energy credits

Companies seeking to offset energy costs have choices. In new guidance, the IRS explains the benefits of electing a grant over energy credit. Known as a Section 1603 payments, the grant is an elective cash reimbursement from the Treasury department for costs of certain qualifying renewable energy projects.

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IRS issues 2011 Federal Unemployment Tax Return

The IRS has posted 2011 Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, and the following two supporting schedules on its website: (1) Schedule A (Form 940), Multi-State Employer and Credit Reduction Information. (2) Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers.

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IRS issues 2012 automobile depreciation limitations

The Internal Revenue Service released the 2012 inflation-adjusted depreciation limits and lease income inclusion amounts for passenger automobiles, trucks and vans. The 2012 tables include amounts for vehicles placed in service in 2012 for which bonus depreciation applies and does not apply.

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IRS issues 2012 Form W-4

The IRS has released the 2012 version of Form W-4, Employee's Withholding Allowance Certificate.

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IRS Issues Additional Guidance on Codified Economic Substance Doctrine

Taxpayer transactions are subject to the codified economic substance doctrine and related penalties.

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IRS Issues Guidance for Accounting Method Changes Under Repair Regs

New guidance provides for automatic IRS consent for accounting method changes relating to the final tangible property regulations.

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IRS Issues Guidance for FFIs with FATCA Agreements

The IRS issued further guidance in preparation for the implementation of the Foreign Account Tax Compliance Act (FATCA) reporting and withholding requirements.

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IRS issues interim guidance and regulations on medical device excise tax

Beginning Jan. 1, 2013, a 2.3 percent excise tax was imposed on sales of “taxable medical devices” by manufacturers and importers.

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IRS issues revised withholding guidelines

The Internal Revenue Service has issued revised withholding tables for employers to start using by Feb. 15. Employers also must start withholding 6.2% from paychecks for Social Security taxes, an increase from 4.2%. Read more at the Wall Street Journal.

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IRS modified accounting method rules for corporate reorganizations or tax-free liquidations

The IRS has modified rules applicable to a taxpayer that engages in a corporate reorganization or tax-free liquidation described in Code Sec. 381(a) that occurs on or after August 31, 2011.

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IRS Offshore Efforts Top $5B Mark

The Internal Revenue Service announced that its offshore voluntary disclosure programs have exceeded the $5 billion mark and released new details regarding the voluntary disclosure program announced in January, including tightening the eligibility requirements. The $5 billion collection is the result of back taxes, interest and penalty payments from 33,000 voluntary disclosures made under the first two programs.

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IRS Offshore Programs Bank $4.4 Billion to Date for Nation's Taxpayers; Offshore Voluntary Disclosure Program Reopens

The Internal Revenue Service reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs. The offshore program will be open for an indefinite period, and there is no set deadline for people to apply.

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IRS posts FAQs on uncertain tax position reporting

The Internal Revenue Service has posted a series of questions and answers (FAQs) about the new requirement for large corporations to report their uncertain tax positions.

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IRS proposes employer mandate rules for health coverage

The Internal Revenue Service has issued proposed regulations on the shared responsibility for large employers to provide health care coverage under the Affordable Care Act.

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IRS Provides 70% Safe Harbor for Deducting Specific Success Fees

On Apr. 8, 2011, the IRS adopted a safe-harbor election (Revenue Procedure 2011-29) that allows taxpayers to deduct 70% of the success-based fees (success fees) incurred in connection with certain capital restructurings and acquisitions or reorganizations. The remaining 30% is treated as going to activities that facilitate the transaction and must be capitalized.

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IRS Recognizes Bitcoin as “Property” Subject to Taxation

Bitcoin and other virtual currencies now fall under IRS purview and penalties for noncompliance with tax laws.

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IRS releases revised Form 8952 to apply for misclassified worker settlement program

IRS has released a revised Form 8952, Application for Voluntary Classification Settlement Program (VCSP), in accord with recent guidance. The form no longer requires the taxpayer to agree to extend the statute of limitations on assessment as a condition of entering the VCSP agreement.

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IRS repair regulations continue to evolve: Timeline of key changes

Virtually every company should be aware of the Internal Revenue Services' current capitalization policies and methods to determine compliance to current tangible property rules, commonly known as Repair Regulations. As the rules evolve, changes in regulatory interpretation, deadlines, and details could have implications on a company's financial statements, accounting methods, and fixed asset accounting systems.

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IRS retroactively removes de minimis partner rule from regulations

Due to the possibility of unintended tax consequences, the IRS has retroactively removed a de minimis rule that had allowed partnerships to ignore the tax attributes of de minimis partners when determining whether special allocations have substantial economic effect.

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IRS Revises Rules for the Offshore Voluntary Disclosure Program

Changes to the offshore tax compliance program are clarified in two new sets of frequently asked questions.

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IRS Says No Foreign Withholding, No Allowable Refund

The Treasury Department and the IRS intend to issue regulations addressing claims for refund or credit against amounts withheld from foreign taxpayers that are limited by the actual amount withheld.

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IRS Says UTP Descriptions of Some Tax Positions are Too "Concise"

During its review of Schedule UTP (Uncertain Tax Position Statement) filed by taxpayers for the 2010 year, the Internal Revenue Service discovered that descriptions of some disclosed tax positions were more "concise" than they should have been. A new page on its website provides specific examples of acceptable and unacceptable descriptions.

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IRS Simplifies Late S Corp Elections

The IRS provides procedural relief to companies that make late elections to become S corporations.

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IRS Simplifies Research Credit Election on Amended Returns

By permitting alternative simplified credit (ASC) elections for a tax year on an amended return, the IRS is permitting taxpayers who have not claimed the credit previously to now consider this option.

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IRS Special per Diem Rates Released for 2013–2014

The Internal Revenue Service released special per diem rates effective for business travel expenses in 2013-2014.

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IRS Standard Mileage Rates to Go Down in 2014

Lower optional standard mileage rates go into effect in 2014 and will be reflected on 2015 returns.

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IRS tax tips for capital gains and losses

The IRS issued a list of 10-items taxpayers should know about capital gains and losses, including definitions, timing of classifications, and various tax rates. This year, a new form, Form 8949, Sales and Other Dispositions of Capital Assets, is to be used to list all capital gain and loss transactions. Capital Gains and Losses.

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IRS Temp Repair Regulations Make Taxpayers Eligible to Recover Expenses

In 2011, the IRS published temporary "Repair Regulations" related to the tax treatment of the acquisition, improvement, and disposition costs of tangible assets. These rules took effect for tax years 2012 and beyond.

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IRS To End Use of Paper Coupons For Federal Tax Deposits After 2010

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).

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IRS Transparency Initiative Part I - It's Proposed

On January 26, 2010, the Internal Revenue Service ("IRS") released Announcement 2010-09. The announcement explains the content of a proposed schedule that certain business taxpayers will be required to file with their annual tax returns.

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IRS Transparency Initiative Part II - It's Revised

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).

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IRS Transparency Initiative Part III - It's Final

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.

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IRS Updates 2015-2016 Per Diem Rates for Lodging and Meals

The IRS released adjusted per diem rates effective on or after Oct. 1, 2015.

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IRS Updates Procedures for Change in Accounting Methods

Updated IRS procedures address automatic consent for a change in an accounting method and advance (non-automatic) consent to change an accounting method.

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IRS Updates Statistics on TaxPayers Reporting Uncertain Tax Positions

The Internal Revenue Service has released statistics on taxpayers filing uncertain tax positions (UTP) for the 2011 tax year. Uncertain tax positions can help smooth out tax liabilities and improve financial statement transparency but the requirements of complying with ASC 740 are complex.

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IRS Warns of Tax Filing Delays if Congressional Inaction Continues

Corporate tax reform and expired corporate tax breaks await U.S. Congress deliberation.

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Is Tax Reform a Red Herring?

Down-to-the-wire negotiations over increasing the debt ceiling. An unprecedented downgrade in the U.S. credit rating. A breathless roller-coaster ride in the financial markets.

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Is your Company Passing Up Potentially Lucrative R&D Credits?

Too few small and midsize companies are taking advantage of federal research credits.

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It's a Landslide! U.S. Senate Passes Tax Cut Deal, 81-19

The Senate overwhelmingly approved a controversial $858 billion tax cut package Wednesday, voting to extend the Bush-era tax reductions despite a series of objections from both the left and the right. The measure now advances to the House of Representatives, due to be taken up Thursday, December 16, 2010.

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January 2014 Not Too Late to Wrap up 2013 Year-end Tax Planning

Businesses still have time to take advantage of numerous tax planning activities that may roll back tax bills for 2013.

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Key FBAR Filing Deadline Approaching

Electronic filing of Form 114 due June 30, 2014.

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LB&I emerging enforcement actions reflect shifting focus

The process, or work streams, by which the IRS examines potential noncompliance in large C corp, S corp, and partnerships are being put into action to achieve compliance objectives.

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Looming tax reform creates year-end business tax planning challenges

Potential tax reform legislation casts a cloud of uncertainty over year-end tax planning for businesses.

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Loss of Renewable Energy Credits Could be Huge Loss to the Nation

The Senate recently voted to kill 30 year-old ethanol subsidies. The energy-related cuts have groups that support wind, solar, and other renewable energy sources concerned that their preferred tax breaks will be eliminated to lower government costs.

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Lower Thresholds Increase Companies Subject to Uncertain Tax Position Filings

The IRS introduced Schedule UTP, Uncertain Tax Position Statement, for certain corporate returns beginning with 2010 tax years.

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Lucrative Business Incentives for 2011 and Beyond

Two primary pieces of legislation passed in 2010 that, in combination, are intended to jump start corporate America and will have lingering benefits for years to come. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 passed in December 2010 followed closely on the heels of another business boosting measure, the Small Business Jobs Act of 2010.

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Mark Your Calendar: Critical Tax Filing Deadlines Changed

New partnership and C corp tax filing deadlines have been signed into law. Get familiar with the changes.

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Medical Device Tax Shell Game Burdens Consumers and Businesses

A Congressional Research Service report on the medical device tax raises questions about the justifiability of the disputed tax.

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Medtronic Merger Latest Large-scale Tax Inversion

Companies are changing their mailing address in hopes of achieving significant tax savings.

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Mid-year FBAR Deadline Approaching; Amnesty Window Closes in August

The Internal Revenue Service is intent on getting its fair share of corporate profits sitting in foreign accounts, and is making reporting of those profits an enforcement priority. In the United States, taxpayers are taxed on worldwide income.

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Misclassification of employees as independent contractors

Let's face it, hiring employees can be expensive; not just the cost of the services provided, but all of the administration that surrounds it, like payroll taxes and unemployment taxes. Now, at least in Colorado, add to that a state assessed fine beginning July 1, 2009 for all situations where the Division of Employment finds that an employer "with willful disregard of the law, misclassified employees" as independent contractors.

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Momentum is Growing for Permanent R&D Credit

Congress is moving closer to strengthening federal research and development incentives by making them a permanent part of the tax code.

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More IRS and Other Enforcement Agents on the Ground

As a starting point for budget negotiations, the White House has proposed putting more agents on the ground to enforce tax collection and financial compliance priorities, despite towering budget deficits. More IRS agents are intended to bridge federal funding gaps by roping in more revenue.

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More IRS Guidance Issued on Tangible Property Regulations

Helping taxpayers account for dispositions of tangible depreciable property.

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Most Corporations Subject to Reporting Actions Affecting Changes in Ownership

The IRS has issued transitional relief from information reporting requirements under Section 6045B for stock reporting organizational actions taken in 2011.

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Multinational tax holiday could create 2.9 million jobs

If U.S. multinationals were allowed to repatriate the estimated $1 trillion in profits overseas at a lower tax rate, the result could be 2.9 million jobs, according to a report by economist Douglas Holtz-Eakin. Released earlier this month by the U.S. Chamber of Commerce, the author argues that a repatriation holiday could pave the way to broader tax reform, and put much needed cash into the hands of investors and consumers.

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Multinationals get more clarity on IRS exam focus

IRS announces the next round of compliance initiatives for identifying instances of noncompliance among multinationals.

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Multinationals on Alert as OECD BEPS Action Plan Takes Shape in 2015

Multinationals prepare for new requirements from Base Erosion and Profit Shifting Project due to be finalized in 2015.

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Multinationals Should Register FFIs in Preparation for FATCA

Big or small, if your company operates globally, you may have the Foreign Account Tax Compliance Act (FATCA) obligations to meet by October 2013.

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Net operating loss audits risky when records aren't available

Keep net operating loss (NOL) supporting documentation on hand a bit longer to reduce audit risk.

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New 1099 Requirements Effective This Year

In April of this year, President Barack Obama repealed a couple 1099 requirements - but not all, leaving some taxpayers subject to new reporting requirements that take effect this year. Specifically, brokers and merchant payment processors must comply with expanded reporting requirements.

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New IRS regulations finalize due dates for certain tax forms

Regulations reflect new statutory due dates and extensions, a number of which went into effect in 2016.

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New IRS webpage for late filers and payers

The IRS has a new page on its website with collection procedures for late filings and late payments. The page provides detailed information on the collection process and taxpayer rights; payment options; and ways a taxpayer can prevent future tax liabilities.

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New regulations on surrogate foreign corps

The Internal Revenue Service issued final, temporary, and proposed regulations intended to stop corporations from moving the corporate parent overseas to low-tax jurisdictions to avoid U.S. taxes. The regulations govern whether foreign corporations have "substantial business activities" in a foreign country and when foreign corporations are "surrogate foreign corporations" for purposes of the Sec. 7874 tax on expatriated entities.

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New Repair Regulations Could Mean Significant Tax Savings

Discover tax-saving opportunities in the new business-friendly repair regulations.

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New York Takes on Tax Reform as U.S. Congress Backs Away

The state of New York enacts major corporate tax reform, sanctioning significant changes for many corporate taxpayers.

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No Small Business Sightings at Today's Tax Overhaul Table

Although revamping the tax code is unlikely in 2011, the process for a major overhaul is now underway. Treasury Secretary Timothy Geithner kicked off the corporate-tax revision talks today, Friday, with more than a dozen major U.S. companies.

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Not a Total Surrender: White House Plans to Scale Back Tax Cut Extension in 2012

When up for renewal in 2012, the newly extended tax cuts will be limited, this according to Vice President Joe Biden. On December 19th, in an interview with "Meet the Press," Biden stated, "The one target for [us] in two years is no longer extending the upper-income tax credit for millionaires and billionaires, and scaling back what we had to do to get the compromise, the estate tax for the very wealthy."

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Not Too Late to Take Advantage of Favorable Extenders Through Year-end

The IRS offers taxpayers some options to take advantage of bonus depreciation and Section 179 deductions.

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Obama Budget Proposes Increased Taxes on U.S. Multinationals

The Obama Administration looks to windfall from closing so-called loopholes in the international tax system.

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Obama Looks to Businesses to Lighten the U.S. Deficit Load

President Barack Obama is looking to businesses and high-income individuals to bring the federal deficit down. In a plan submitted on September 19 to the Joint Select Committee on Deficit Reduction, known as the "supercommittee," the President offered details for a plan to cut the federal deficit by $3.2 trillion (net) over the next decade.

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Offset Sec. 179 Cuts and Accelerate Asset Expensing with Repairs Regulations

A reduction in the generous Section 179 expensing limit and phaseout threshold may be offset with help from recent tangible property regulations.

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Online Retailers Face Another Year of Federal Sales Tax Uncertainty

Federal sales tax guidance remains in limbo after an indecisive 2013.

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Over two dozen Fortune 500 companies use tax break to bypass federal income tax

More than two dozen Fortune 500 companies paid no U.S. federal income taxes in recent years, in part due to accelerated depreciation, according to the Citizens for Tax Justice (Many Fortune 500 Companies Paid No Federal Income Tax Thanks To Popular Tax Break, Reuters, 4/9/12). Accelerated depreciation is a tax provision that allows increased deductions in the early years of the life of an asset.

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Pathway to ASC 740 Compliance

Get the tools you need to adhere to the standard's provisions.

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Paying Delinquent Employment Taxes Late Provides No Protection From the Law

A federal district court has ruled that paying the IRS what is owed late is not enough to avoid a day in court. In the U.S. vs. Quinn, the corporate taxpayer failed to remit withheld taxes at various times between 2003 and 2005.

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Payroll tax cut extended; New Form 941 released

On Feb. 22, President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012, H.R. 3630, which extends the 4.2% rate for the employee portion of Social Security tax through the end of 2012.

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Potential dividend, capital gains and income tax changes force year-end tax planning exercise

Tax changes are upon us. What those tax changes will be are somewhat dependent on election year politics and the vagaries of the leadership that comes out on top.

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Prepare now for proposed partnership audit regime

New proposed rules would significantly change the audit regime for partnerships and LLCs. Here’s what you can expect if finalized beginning in 2018.

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Prepare Now to Leverage the Federal R&D Tax Credit

As support for a federal R&D tax credit extension builds once again, businesses should prepare to leverage this potentially significant investment incentive.

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President signs Small Business Jobs Act of 2010

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.

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President's Jobs Bill Contains Many Tax Proposals

Putting Americans to work is the goal of President Barack Obama's American Jobs Act (Jobs Act) presented to Congress on Monday. In presenting the Jobs Act, President Obama asked the U.S. Congress to approve a $447 billion package of tax cuts and new spending to prop up the ailing economy and spur on greater employment.

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Proposed carried interest change

Carried interest changes were a strong point of contention when last proposed. They are back on the table today as a result of the proposed American Jobs Act.

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Proposed changes to Sec. 382 segregation rules for small shareholders

The Treasury Department and IRS recently released proposed regulations (REG-149625-10) under section 382 concerning application of the segregation rules for certain transactions affecting ownership of a loss corporation. The proposed rules address stopping increases in direct ownership by small shareholders from giving rise to shifts in ownership.

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Proposed regulations clarify corporate transfers that qualify for allocation of E&P

IRS proposed regulations (Reg-141268-11) under Code Sec. 312 clarify that if property is transferred from one corporation to another and no gain or loss is recognized, no allocation of the transferor's earnings and profits (E&P) is made to the transferee unless the transfer is dealing with the carryover of tax attributes in certain corporate acquisitions.

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Proposed regulations clarify FTC's high-tax income and foreign loss recaptures

The Internal Revenue Service issued proposed regulations (Proposed Reg § 1.904-4 and § 1.904(g)-3.) that would provide guidance on coordinating foreign tax credit (FTC) rules for determining high-taxed income with capital gains adjustments as well as the allocation and recapture of overall foreign and domestic losses.

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Proposed Regulations Would Ease Classification of R&D Expenditures

Proposed regulations would make it easier for taxpayers to classify qualified research expenditures and pass the first hurdle to claiming R&D credits.

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Proposed Rules Make Certain Internal-use Software Eligible for Research Credit

Proposed IRS rules cut through controversy to define what aspects of software developed for internal use qualify for the research credit.

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Push for Permanent R&D Tax Credit is On

On September 20, Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member Orrin G. Hatch, R-Utah, made a case for the permanent extension of the federal research and development (R&D) tax credit during a hearing on tax reform and incentives for innovation. The lawmakers called it a necessary incentive for the U.S. industry to remain competitive in the global marketplace.

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R&D Benefits a Bonanza for Business

The R&D tax credit is among the largest and most broadly available federal and state tax credits. State competition to attract jobs has resulted in more attractive R&D credits, creating a veritable benefit bonanza for businesses.

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R&D Credit Determinations are not Created Equal

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.

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R&D credit extended through 2013

One significant result of Congressional efforts to avert the “fiscal cliff” is the retroactive extension of the Research & Development (R&D) credit for two years through 2013. No legislative changes were made to the R&D credit calculation including the actual credit rate for the 2011 year.

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R&D Credit Extension

The R&D or Research Credit - part of the Extenders package - terminated as of 12/31/2009 and has not been extended yet. We are waiting for Congress to reconvene after the elections in mid-November to address the extension of the credit as well as other tax items including individual income tax rate cuts, the federal estate tax, and an alternative minimum tax (AMT) patch.

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R&D Credit Passes the House/Congress

The House passed the Tax Cut bill late last night (Thursday 12/16/10). A two year retroactive extension of the Research Credit is part of this bill (the Credit will be extended through 12/31/11).

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R&D Tax Credits

The Research Credit, the Research and Experimentation (R&E) Credit, the Research and Development (R&D) Credit, and Credit for Increasing Research Activities are all different terms for the same Federal Tax Credit. This Federal Credit is filed on Form 6765 - Credit for Increasing Research Activities.

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R&D Tax Credits Boost Corporate Profits

The extension of the research and development tax credit boosted earnings for dozens of companies in the first quarter, according to an analysis by the Wall Street Journal.

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Random IRS audits to hit 2,000 small businesses annually

Over the next three years, the IRS will be examining a total of 6,000 firms as part of its Employment Tax National Research Project (NRP). Upon announcing the project, the IRS advised that employers should have all of their tax and financial records readily available to expedite the process and that the examinations will be comprehensive in scope.��

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Republicans' international tax reform proposals include lower corporate rate & shift to territorial regime

On October 26, Ways & Means (W&M) Chair Dave Camp (R-MI) released a draft proposal for international tax reform. Two prominent features of the proposal are reducing the maximum corporate tax rate from 35% to 25%, for tax years beginning after Dec. 31, 2012, and shifting the U.S.'s international tax regime from a worldwide system to a territorial-based system.

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Research and Experimentation Credit

The Federal Government provides tax benefits to companies developing new products or methods to produce products. One such benefit is a tax credit available to companies who are spending money on qualifying research expenses related to such innovation.

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Resource Extraction Disclosure Rule Moves Forward

The SEC is moving forward with a rule being challenged in court that requires U.S.-listed oil, gas and mining companies to reveal payments made to foreign governments for commercial development projects.

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Rolling Back the ObamaCare 1099 Documentation Burden

Efforts to repeal the so-called 1099 provision buried in the health care reform act are well underway. The provision was designed to help finance the expansion of health insurance coverage by identifying vendors that are underreporting their income and not paying taxes that are due to the federal government.

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S Corporation Members Not Subject to Controlled Group Limitations

S corporations that are members of a controlled group of corporations are not subject to the IRS rule that limits the controlled group's maximum annual section 179 expense deduction. Treated as separate entities for purposes of that limit, these S corporations can make section 179 elections up to the maximum election amount.

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S Corporations should monitor C corporation tax reform

C corporation-type taxes on built-in gains under Code Sec. 1374 and passive income under Code Sec. 1375 may generally be imposed on S corporations. Taxable income recalculated as though the entity were still a C corporation may come into play resulting in current taxation to the S corporation.

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Safe harbor for employers to determine employee full-time status

The IRS and Treasury Department have provided guidance regarding provisions of the Patient Protection and Affordable Care Act (Affordable Care Act) (P. L. 111-148) for determining which employees are full-time for shared employer responsibility.

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Senate Finance Committee Approves Tax Extenders Through 2016

Proponents of the Senate Finance Committee tax extender legislation say passage would provide some certainty in the tax code for the next two years.

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Senate Follows House in Passing Research Tax Credit and Other Extenders

President expected to sign extenders package into law by end-of-week.

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Severe International Tax Penalties Intensify Need for Vigilance

Multinationals on alert as IRS prioritizes global tax enforcement. The agency's aggressive efforts to tamp down on tax evasion via foreign accounts are leading to severe corporate penalties.

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Simplified per-diem rates flat; some expenses now recoverable

The IRS has issued its annual updates of special per diem rates with a list of "high-low" simplified per-diem rates for post-Sept. 30, 2012 travel (Notice 2012-63, 2012-42 IRB).

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Small Business Administration Seeks Repeal of 1099 Filing Requirements

The head of the U.S. Small Business Administration (SBA) called for the repeal of a vast expansion of 1099 filing requirements scheduled to begin in 2012. In an open letter to small business owners, SBA Administrator Karen Mills repeated President Obama's Nov. 3 statements that the expanded requirement for small businesses to report all transactions greater than $600 is "burdensome," and adds up to "too much paperwork, too much filing."

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Small Taxpayers Able to Avoid Filing Form 3115s for Tangible Property Regulation Compliance

IRS makes it easier for small business owners to comply with tangible property regulations by lessening the requirements for these taxpayers to file a Form 3115.

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Spreadsheets No Deterrent to Valuable Tax Functions

Tax departments focused on efficiency can see major improvements in the accuracy of tax filings and financial reporting.

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Standard mileage rates go up a penny in 2013

The IRS has announced that the optional mileage allowance for owned or leased autos will go up for 2013. For business use of a car, van, pickup truck, or panel truck, the 2013 rate will be 56.5 cents per mile.

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Start Smart in 2015 with a Tax Strategy for Growth

Keep more of what your company makes by managing the tax implications of growth in 2015.

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Starting Jan. 13 Business Tax Filers Can File 2013 Returns

There will be no delay due to the government shutdown in the starting date for business tax filing season.

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Still Plenty of Reason to Consider 1031 Exchanges

A new federal 100% bonus rule may affect how companies use IRS 1031 tax-free exchanges, or like-kind exchanges (LKE), in the short term. Since 1921, companies have relied on LKEs to defer tax bills indefinitely from the sale and purchase of replacement assets.

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Supreme Court affirms 6-year limitation period does not apply to overstated basis

On Wednesday, the U.S. Supreme Court affirmed the Fourth Circuit's decision in Home Concrete & Supply, LLC, which had ruled that the extended six-year statute of limitation under Sec. 6501(e)(1)(A), which applies when a taxpayer "omits from gross income an amount properly includible" in excess of 25% of gross income does not apply when a taxpayer overstates its basis in property it has sold (Home Concrete & Supply, LLC).

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Supreme Court Declines Union Carbide R&D Credit Case; Appeals Decision Upheld

The Supreme Court declined to review the Union Carbide Corporation R&D credit case, thereby allowing the earlier Tax Court ruling against Union Carbide to stand.

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Talking Tax to a Packed Crowd at Denver Startup Week

TaxOps Partners presented "10 Tax Essentials for Growing Businesses" to business owners eager to get tax right.

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Tax Accrual Workpapers Update (Textron)

On August 13, 2009, the U.S. Court of Appeals for the First Circuit ("Court of Appeals") ruled 3-2 to overturn the U.S. District Court for the District of Rhode Island's ("District Court") decision in United States of America vs. Textron, Inc. and Subsidiaries. As a result, Textron's income tax accrual workpapers are subject to an IRS summons.

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Tax Court decision affects active LLC/LLP members

A recent Tax Court decision has ruled that investors in LLC's and LLP's are not limited partners for passive activity loss limitation purposes, thereby allowing an offset of��losses against certain other income. The IRS has long contended that losses incurred by LLCs and LLPs are not deductible by the member, as they are considered passive investors.

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Tax Court Invalidates Cost-sharing Rules for Stock-based Compensation

The U.S. Tax Court struck down a 2003 cost-sharing provision under transfer pricing regulations that requires the sharing of stock-based compensation.

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Tax Election to Treat Subsidiary Stock Disposition as a Sale of Assets

The IRS and U.S. Treasury Department authorized the issuance of regulations under Section 336(e). When implemented, the final rule will permit companies to elect to treat the sale, exchange, or distribution of at least 80% of the voting power and value of the stock of a corporation (target) as a sale of all its underlying assets.

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Tax executives pessimistic about positive tax reform this year

Tax business executives polled in the Tax Policy Forecast Survey predict a smaller agenda for tax reform this year. The survey by Miller & Chevalier Chartered indicates executives see politicos focusing on traditional extenders, such as the R&D credit, the AMT patch and expiring tax provisions, if tax policy reform is considered at all.

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Tax Extenders Bill hung up in Senate

The U.S. Senate recessed for the extended July 4th holiday without acting on H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010 (the extenders bill).

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Tax Fit for Takeover: Create a Corporate Tax “Wellness” Plan to Up Company Value

Creating a wellness plan for your corporate tax profile around tax planning, tax risk management, tax cash flow management, and compliance and reporting helps to ensure that when it comes time to kick off your exit strategy, your company is tax fit for takeover.

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Tax Prep for 2013

As the New Year approaches, a number of tax issues need attention. On January 1, 2013, the following kicks in:

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Tax reform issues to watch

The top five tax rules and regulations to watch, as narrowed down by CCH experts.

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Tax Reform Needed to Spark Rise in America’s Corporate Sector

New study shows America has lost 1 million corporations since 1986 due largely to the non-competitive nature of the U.S. corporate tax code.

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Tax Season Opens As Planned Following Extenders Legislation

Tax season to start on schedule despite last minute tax changes.

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Tax Uncertainty Grows as Congress Defers Change

Congress' failure to act by Thanksgiving leaves many major tax-code issues unaddressed for year-end. Income-tax rates, capital-gains rates, estate-tax exemptions and rates, and the alternative minimum tax issues have been deferred to 2012.

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Tax-cost of Olympic Glory

Kerry Picket reported the tax-cost of Olympic glory in a blog in the Washington Times (Kerry Picket, "Olympics math -- Medal winners to pay up to $9,000 to IRS," Washington Times, July 31, 2012). In the article Picket notes that American athletes who win medals at the 2012 London Olympics will have to pay the IRS when they return to the United States.

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Taxing sales of state tax credits at the federal level

Sales of transferable state tax credits are becoming more common as online marketplaces make it easier for buyers and sellers to connect. Whether selling or purchasing state tax credits, taxpayers should understand the terms and conditions associated with the transfer and the related federal income tax consequences.

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TaxOps welcomes new Partner Rachel Sawyer to Federal Tax practice

Award-winning business tax specialty firm adds federal tax partner to meet growing demand for tax services.

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TaxPayer can't manipulate classes of disregarded entity to allocate tax items and basis

IRS legal counsel concluded that unless the owner elects otherwise under Treasury Regulation § 301.7701-3a wholly owned eligible entity is a disregarded entity for federal tax purposes and as such, could not split the entity interest into separate classes of interests and then allocate basis and income, loss, deduction, and credit items among those classes.

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Taxpayers Benefit from Expanded Use of ASC for Research Credits

Temporary regulations give taxpayers the opportunity to use the ASC calculation for a tax year on an amended return.

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Taxpayers can't avoid 6-year assessment period by filing amended returns

In an e-mailed Chief Counsel Advice (CCA 201118020), the Internal Revenue Service addressed the issue of whether a taxpayer who omits over 25 percent of gross income on an original tax return, but then files an amended return demonstrating addition income within three years (IRS Section 6501(a)) does not preclude the IRS from assessing the income tax liability over a six year statue of limitation period (IRC Section 6501(e)).

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Taxpayers Get Some Answers from IRS on Daunting Repair Regulations

The IRS has issued a set of frequently asked questions to add some clarity in this complicated area of tax law.

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Taxpayers with Foreign Assets have Looming June 30 Filing Deadline

Taxpayers with foreign accounts aggregating $10,000 at any time during 2012 must file Treasury Form TDF 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

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TaxWeek in Review

Temporary and Proposed Regs Address U.S.-Sourced Dividend Equivalents Taxes will be required to be withheld on any payments of "dividend equivalents" to nonresident aliens and foreign corporations as a way to crack down on certain tax avoidance practices, IRS says in temporary (T.D. 9572) and proposed (REG-120282-10) rules.

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TaxWeek in Review

IRS Updates Disclosure Guidance for Understatement Penalties

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TaxWeek in Review

IRS guidance on veterans work opportunity tax credits

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TaxWeek in Review

Partnerships can file Schedule K-1 electronically

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TaxWeek In Review

IRS Extends Tax-Filing Deadline to April 17. The Internal Revenue Service is giving individual taxpayers two extra days to file their 2011 tax returns this year.

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TaxWeek in Review

IRS e-File System open to Business Tax Filers The Internal Revenue Service electronic filing system is now open for business tax returns. The modernized e-File, or MeF, system, can now accept tax year 2011, 2010 and 2009 business-related tax returns.

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TaxWeek: Tax-Cut Bill signed; Obama Eyes Corporate Tax Rate Cuts; E-Verify Self Check worker eligibility system available

President signs payroll tax-cut bill

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Technical termination of a partnerships or LLCs

The regulations pertaining to partnerships and LLC terminations are complex and can be tied to hefty penalties for filing late tax returns.

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Temp Repair Regulations May Require Accounting Method Changes

Frightfully long and complex rules under Section 263(a) address expenditures relating to tangible property, including buildings and other fixed assets. At issue is whether to treat these expenses as deductible repairs or as a capitalized improvement, which can be depreciated over the life of the asset.

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Temporary 5-year NOL carryback approved by Congress

On November 5, 2009, an unemployment insurance extension bill was approved by the House of Representatives that allows businesses with net operating losses (NOLs) for 2008 or 2009 to carry those losses back for up to five years. The bill also extends and modifies the first-time homebuyer credit that was established by the American Recovery and Reinvestment Act of 2009.

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The Senate Finance Committee's Health Reform Bill

We usually defer the dissemination of proposed legislation until passed by Congress and signed by the President. We're getting lots of questions about what Congress is considering in its proposed Health Reform Bill, so here are a few key highlights coming out of the Senate Finance Committee which passed earlier this week:

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The Tax Cut Bill has been Signed into Law !!

President Obama just signed the Bush-era Tax Cut Bill into law (12/17/2010). Included in this legislation which kept the tax rates from going up, is a 2-year R&D Tax Credit extension.

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The uncertain future of the NIIT: What it means for your tax planning

The 3.8% net investment income tax is in flux as Congress debates health care legislation. What would the proposed repeal of the net investment income tax mean to high income taxpayers?

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Three Key Issues for Businesses this Tax Season

Improve tax outcomes with these preparation tips and resources.

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Tired of Being Last? Then its High Time the U.S. Makes the R&D Credit Permanent

Investments in education and infrastructure, these, President Obama said, are going to be "the seeds of economic growth in the 21st century."

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To elect or not to elect 100% bonus depreciation

The 2010 Tax Relief Act included the best terms ever for bonus first-year depreciation, namely a 100% writeoff of qualifying property in the placed-in-service year. IRS guidance contains detailed rules permitting a taxpayer to elect to "step down" from 100% to 50% bonus depreciation for property placed in service in a tax year that includes Sept. 9, 2010.

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Too Few Recognize Their FBAR Filing Requirements as Deadline Approaches

Too many individuals fail to recognize their FBAR filing requirements, potentially exposing themselves to steep penalties.

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Top 10 Indirect Tax Audit Triggers

The top 10 issues that are most likely to trigger an audit of indirect taxes were published in Accounting Today. The list, compiled by the Tax & Accounting business of Thomson Reuters, includes the following.

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Treasury and IRS issue final regulations regarding partnership noncompensatory options

The U.S. Treasury and the Internal Revenue Service have issued final regulations regarding the tax treatment of noncompensatory options, warrants, and convertible debt and equity instruments issued by partnerships.

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Treasury recommends significant changes to 8 tax regulations

How will the Treasury recommendations for modifying or removing 8 tax regulations affect you or your business?

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Treasury releases long-awaited FATCA model agreements; Final regs for offshore account law due in fall

The Treasury Department has released two versions of a model agreement for intergovernmental information sharing under the Foreign Account Tax Compliance Act (FATCA). There is a reciprocal model agreement for countries with which the U.S. has in effect a tax treaty or tax information exchange act, and a largely identical nonreciprocal model agreement.

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Treasury, IRS Propose Action to Rein in Tax Inversion

The Obama administration takes its first step to curb the tide of corporate tax inversion deals with pending regulations.

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Trump administration employer-friendly shift puts spotlight on IRS tax relief program

The IRS Voluntary Classification Settlement Program offers tax relief to employers that have misclassified an employee as an independent contractor.

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Trump orders heavy-handed tax regulations to be lightened up

A recent executive order signed by President Trump puts demanding tax regulations under review.

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Trump's Shareholder-centric Take on Taxes

Trump's tax reform plan is short on details, long on taxpayer promises.

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Trump-ing the tax code

Slashing corporate tax rates, reducing the number of individual marginal income tax brackets, and repealing the estate and alternative minimum taxes – all are features of President Trump’s pitch for 2017 tax reform.

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Two Positive Developments in NOL preservation

Net operating losses (NOLs) are a very valuable asset that can dramatically reduce, or even eliminate, a corporation's tax liability. Two recent developments - the rise of poison pill plans and an IRS private ruling - preserve the ability of companies to take full advantage of their NOLs while simultaneously staving off any unsolicited takeovers.

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U.S. Among Worst in Worldwide Corporate Tax Rate Rankings

For the second year in a row, the U.S. is in the uneviable position of being third from last when it comes to global tax competitiveness, according to the Tax Foundation.

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U.S. companies decide tax incentives aren't worth the trouble

Small and midsize businesses are foregoing millions of dollars in targeted tax breaks because they decided the incentives aren't enough to justify the time, effort and expense to qualify for them. The Internal Revenue Service estimated that only about 20,000 of 1.78 million corporate-tax returns filed in the U.S. claim any of three dozen credits available.

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U.S. Corporate Income Tax Return Changes Defined

The Internal Revenue Service released a final version and instructions for Form 1120, U.S. Corporation Income Tax Return for 2012. The form reflects the following changes, as noted in the instructions.

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U.S. has World’s Third Highest Corporate Income Tax Rate

New Tax Foundation data show a decade of declining global corporate tax rates, highlighting the need for U.S. corporate tax reform.

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U.S. House tax bill has far-reaching business changes

The tax reform focus swings to the Senate after the House passes tax reform legislation.

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U.S. Return of Partnership Income Changes

The Internal Revenue Service has released a final version and instructions for Form 1065, U.S. Return of Partnership Income for 2012. The form reflects the following changes, as noted in the instructions.

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U.S. Treasury approves new government-to-government FATCA model with Japan and Switzerland

The U.S. Treasury signed off on separate joint statements with Japan and Switzerland to improve government-to-government cooperation in combatting international tax evasion by removing legal impediments to compliance with the Foreign Account Tax Compliance Act (FATCA).

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Uncertain Tax Positions Can Trigger IRS Audits

A reduced threshold broadens the base of taxpayers that must report uncertain tax positions, thereby exposing these businesses to an increased risk of an IRS audit.

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Union Carbide a cautionary tale on R&D tax credits

Union Carbide provides a cautionary tale for companies interested in taking advantage of federal Research and Development (R&D) credits.

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Unreported offshore income deadline extended

Have you ever had income from a foreign bank account that wasn't reported on your U.S. income tax return? That income is subject to U.S. tax and the Internal Revenue Service is stepping up enforcement by going directly to the source, foreign banks, to obtain names of U.S. citizens that hold these accounts to cross check the reporting of the income.

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Updated Mileage Rates for 2010

The IRS recently released updated federal mileage rates that will apply to mileage incurred on or after January 1, 2010:

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Various Federal Tax Provisions Set to Expire with the New Year

Are you ready? Take a look at this partial list of tax credits, deductions and provisions set to expire at year-end for any last minute preparations.

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Voluntary Classification Settlement Program for misclassified workers

The IRS launched a new Voluntary Classification Settlement Program (VCSP) for taxpayers that agree to prospectively treat workers as employees. To be eligible, the employer must have consistently treated the workers as nonemployees and have filed all required Forms 1099 for the workers for the previous three years.

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What happened to the extenders bill?

We typically don't comment on new legislation until it's passed, but we've been receiving many questions on the status of the American Jobs and Closing Tax Loopholes Act of 2010 which was passed by the House of Representatives of May 28.

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What might happen if a 15% business tax rate becomes law?

Proposed 15% business tax rate may offer savings opportunity for more than just businesses.

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When to Go to State Law in Determining Whether Debt is Recourse or Nonrecourse

State law determines whether a debt is recourse or nonrecourse when analyzing certain issues under Sections 61/108 and Section 1001. Read on for more clarity.

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Will Tax Repatriation Restore Jobs?

An article by David M. Katz posted on the CFO blog June 21, 2011, acknowledges that the proposed tax holiday would bring foreign earnings home, but questions whether the move would result in the boost in job creation proponents expect.

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Wind Power and Biofuel Production Tax Credits Survive Fiscal Cliff

The American Taxpayer Relief Act of 2012 (Relief Act) extends important federal tax credits for renewable energy projects, including projects that produce wind power, blend biodiesel, and produce cellulosic "second generation" biofuel.

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Wondering how expiration of Bush tax cuts will affect your business?

Go to the U.S. House of Representatives' Committee on Small Business websitelisting of expiring 2001 and 2003 taxes that most affect small business. The website also has a list of expiring tax extenders expected to affect small businesses.

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Working with the IRS - Claiming the right amount

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.

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Worries over fiscal cliff recession build

Without congressional action to avoid a "fiscal cliff," Americans should expect a "significant recession" and the loss of some 2 million jobs, Congressional Budget Office (CBO) director Doug Elmendorf said in presenting the results of the latest CBO report on the U.S. budget.

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Year-end tax planning: accelerate depreciation deductions

The planned year-end expiration of the Bush-era tax cuts has led to a bitter partisan divide that everyone seems to agree is at a stalemate until sometime after the November elections. Although tempting to take a wait-and-see approach, businesses can be proactive with what they can control, such as depreciation deductions.

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