Posts Tagged ‘tax return’

IRS Annouces Delays in Processing for Itemizers & Other Taxpayers

Thursday, January 6th, 2011

Because the con­gress passed cer­tain exten­ders very late last year, the IRS has to play catch up. The IRS has asked tax pre­par­ers NOT to e-file cer­tain kinds of tax returns until they give the go-ahead, some time in mid-to-late Feb­ru­ary, 2011. 

What does this mean?  Among the affected tax­pay­ers are those that 

  • item­ize,
  • take the tuition and fees deduction 
  • take edu­ca­tor expenses deduction 
  • take the DC First Time Home­buyer credit (Form 8859)
  • expe­ri­ence deductible casu­alty and theft loss (Form 4684)
  • use Form 3800, Gen­eral Busi­ness Credit
  • use Form 5405, First-Time Home­buyer Credit and Repay­ment of the Credit
  • use Form 6478, Alco­hol and Cel­lu­losic Bio­fuel Fuels Credit
  • use 8834, Qual­i­fied Plug-In Elec­tric and Elec­tric Vehi­cle Credit
  • use Form 8910, Alter­na­tive Motor Vehi­cle Credit
  • uses Form 8936, Qual­i­fied Plug-In Elec­tric Drive Motor Vehi­cle Credit

There will be a delay in pro­cess­ing these tax returns.  Whether the tax­payer e-files or sends in a paper tax return, it will NOT be processed until the IRS deems they are ready to receive that tax return. Although e-file usu­ally results in the quick­est payment,  refunds will not be paid out until the tax return is processed so there will also be a cor­re­spond­ing delay in refunds for these kinds of tax returns. 

If you are not an affected tax­payer, by all means, efile. If you ARE an affected tax­payer, you can paper file your taxes, but under­stand noth­ing your tax pre­parer does will pre­vent your tax return from being shelved until the IRS is ready to deal with it.  If a paper return is filed, it will be processed after sim­i­lar e-filed tax returns received after the go-ahead from the IRS. For affected tax­pay­ers it is advis­able to wait until the IRS gives the green light, then e-file; this method is the speed­i­est way to receive a tax refund. 

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client. 

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, cer­ti­fied finan­cial plan­ner or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to anyone else.

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Posted in Business Taxes, Individual Taxes | 1 Comment »

IRS One-Time Relief For Orgs About To Lose Tax-Exempt Status

Sunday, August 1st, 2010

Its not just peo­ple and busi­ness­men who have prob­lems get­ting their taxes done.  Tax-exempt orga­ni­za­tions, espe­cially small ones that rely heav­ily on vol­un­teers are very much at risk of for­get­ing to file their infor­ma­tion returns. Some­times the exist­ing staff is com­pletely unaware they have this obligation.

On July 28, 2010 the IRS announced a pro­gram designed to help cer­tain tax-exempt orga­ni­za­tions retain their tax-exempt sta­tus.  Tax-exempt orga­ni­za­tions that do not file their infor­ma­tion returns (Form 990-N, Form 990-EZ etal) for 3-years will auto­mat­i­cally lose their tax-exempt status.  The IRS is pro­vid­ing one-time relief for such orga­ni­za­tions that have fil­ing due dates on or after May 17 and before Octo­ber 15, 2010.

There are links to pdfs (and excel files) which list the orga­ni­za­tions at risk of los­ing their sta­tus listed alpha­bet­i­cally, state by state on the IRS web­site.  The list includes orga­ni­za­tions for which the IRS does not have a record of a required annual fil­ing for 2007 and 2008, and whose 2009 return, due on or after May 17 and before Octo­ber 15, 2010, has not yet been received.  The list, which was gen­er­ated on June 30, 2010, includes only orga­ni­za­tions with an annual fil­ing require­ment. Cer­tain exempt orga­ni­za­tions are exempt from this require­ment.  Note: Click­ing on the link takes you to the IRS.gov web­site; ABC LLC is not affli­ated with IRS.gov-you will be sub­ject to their poli­cies, not ours, and we do not know what those poli­cies are. 

Accord­ing to the IRS, their list may be incom­plete, as cer­tain orga­ni­za­tions may be at risk of auto­matic revo­ca­tion even if their names do not appear on these lists:

  • Sub­or­di­nates in group rul­ings for which the par­ent has not filed a required group return;
  • Very small sec­tion 501©(3) pub­lic char­i­ties not required to file an appli­ca­tion for exemption;
  • Other sec­tion 501© orga­ni­za­tions not required to file an appli­ca­tion for exemption

These orga­ni­za­tions should check their records and deter­mine whether they are at risk of auto­matic revo­ca­tion because they have not sat­is­fied annual fil­ing requirements.

In addi­tion, the list may include orga­ni­za­tions that were required to file Form 990 or Form 990-PF. These orga­ni­za­tions are NOT eli­gi­ble to take advan­tage of this one-time IRS fil­ing relief to bring them into compliance.

Note: If you donate to one of these orga­ni­za­tions you can rely on an orga­ni­za­tions deter­mi­na­tion let­ter or list­ing in IRS Pub­li­ca­tion 78 to deduct con­tri­bu­tions until the IRS pub­lishes notice on IRS.gov that the orga­ni­za­tions exempt sta­tus has been revoked. 

As you browse the lists you will see it con­tains every­thing from Amer­i­can Legion posts, artist guilds, orga­ni­za­tions that help ani­mals, orga­ni­za­tions that help chil­dren, postal work­ers unions, fra­ter­ni­ties, soror­i­ties, etc.  If you see one of your pet char­i­ties on these lists urge them to take advan­tage of this pro­gram so they can con­tinue to do their good work. Spread the word. 

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, finan­cial plan advi­sor or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.

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Posted in Other Information | 3 Comments »

Late Filing Fee For Partnership & S-Corporation Returns Soar

Tuesday, January 26th, 2010

Start­ing in 2010 the late fil­ing fee for Part­ner­ship returns (Form 1065) and for S-corporation returns (Form 1120S) is increas­ing.  The pre­vi­ous monthly penalty was $89 per month (or part of a month) per share­holder or part­ner; it is now more than dou­bled to $195 per month per part­ner or share­holder.  The penalty can be charged for up to 12 months, which is a pretty hefty price tag for not fil­ing a tax return.

The penalty may be abated it the part­ner­ship or S-corporation can show the fail­ure to file time was due to a rea­son­able cause.  There are pro­ce­dures to address these penal­ties assum­ing the entity is domes­tic, has a small num­ber of part­ners or share­hold­ers, and the indi­vid­u­als in ques­tion are nat­ural per­sons who have reported all their income from the busi­ness with timely filed tax returns and this fail­ure to file timely is not an ongo­ing prob­lem.  If the part­ner­ship or S-corporation has made a habit of fail­ing to file, do not expect penalty abatement.

Really, the eas­i­est way to han­dle this issue is not to file late in the first place. For many S-corporations and Part­ner­ships no tax is due; these forms are infor­ma­tion returns that tell the indi­vid­ual part­ners and share­hold­ers their dis­trib­u­tive share of income and expenses.

  • Part­ner­ship tax returns are due April 15 for calendar-year partnerships
  • OR the 15 of the fourth month after the close of the fis­cal year for fiscal-year partnerships,
  • S-corporation tax returns for calendar-year S-corporations are due March 15
  • OR the 15th of the third month after the close of the fis­cal year for fiscal-year S-corporations.
  • If the 15th falls on a week­end or bank hol­i­day the due date is the next busi­ness day, there­fore in 2010 the S-Corporation tax return is due March 15, 2010 for calendar-year S-corporations.

Like other tax returns a tax­payer can file a form to extend the time to file, but all taxes are due on the day the tax return is ini­tially due, which means the part­ners or share­hold­ers will have to esti­mate their tax lia­bil­ity includ­ing income from the S-corporation or Part­ner­ship with­out falling short in order to avoid the fail­ure to pay penalty along with inter­est.  Form 7004 can be to file for the exten­sion to file Form 1065 or Form 1120S. The Form 7004 must be filed on or before the orig­i­nal due date or the Form 1065 or Forms 1120S.

Form 7004 will give an auto­matic 6-month exten­sion to file Form 1120S (S-corporation) returns, but will only grant a 5-month exten­sion to file Form 1065 (Part­ner­ship) returns.  In 2010 all Forms 1065, and Forms 1120S for which an exten­sion (Form 7004) was filed will be due Sep­tem­ber 15, 2010.

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help com­plet­ing your part­ner­ship tax return or S-corporation tax return or need help attempt­ing to get your penalty abated, Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice.  Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.

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Posted in Business Taxes, Other Information | 4 Comments »