Taxpayer Received $862,000 From IRS

After Tripping Over a Phone Cord During Tax Audit

 A taxpayer undergoing an audit at an Internal Revenue Service office on Long Island successfully sued the IRS for $862,000 after he was injured by tripping over a phone cord.

See http://www.accountingtoday.com/news/Taxpayer-Scores-IRS-Tripping-Phone-Cord-69345-1.html?utm_campaign=daily-jan%2022%202014&utm_medium=email&utm_source=newsletter

 

Is severance pay due to a lay off subject to FICA taxes?

In November of 2012 the U.S. Court of Appeals ruled against the IRS by affirming a lower court's decision that severance pay do to a lay off are not subject to FICA taxes. This month we will see if the US Supreme Court will upholds the Appeals court’s ruling. If the Court rules against the IRS, the agency will need to process retroactive refund claims submitted by employers and employees. These claims could reach a total in the billions, and cause the IRS to lose a major source of future revenue.

See http://www.law.cornell.edu/supct/cert/12-1408

Taxpayer Advocate Calls for Taxpayer Bill of Rights

The head of the Taxpayer Advocate Service (TAS), also known as National Taxpayer Advocate, urged the IRS to adopt a comprehensive Taxpayer Bill of Rights in her annual report to Congress. TAS is an independent office within the IRS and reports to congress.  In the report she said “because of sequestration, the IRS’s funding was substantially cut, which translated into a reduction in taxpayer service”.  Also “public trust in its fairness and impartiality was called into question” because of reports the IRS’ apparent political treatment of certain applicants for tax-exempt status.

See http://www.irs.gov/uac/Newsroom/National-Taxpayer-Advocate-Delivers-Annual-Report-to-Congress;-Focuses-on-Taxpayer-Bill-of-Rights-and-IRS-Funding

Beanie Baby Billionaire Seeks to Avoid Jail for Tax Evasion

H. Ty Warner, the billionaire creator of Beanie Baby plush toys, asked a judge to give him probation, not prison, for evading taxes on secret Swiss accounts that held as much as $107 million

See http://www.bloomberg.com/news/2014-01-02/beanie-baby-billionaire-seeks-to-avoid-prison-for-tax-evasion.html

Tips for Fraud Prevention in 2014

With fraud costing as much as 5 percent of revenues worldwide, the Association of Certified Fraud Examiners is recommending a set of steps for businesses to take to protect themselves.

See http://www.cpapracticeadvisor.com/news/11287386/tips-for-fraud-prevention-in-2014

Year-End Tax Tips and Reporting Checklist - Tax Reporting Checklist

One of the most important ways you can lower accounting and tax fees is being proactive in providing year end information to your CPA.  The following is a checklist of important year end items:

Has this information been reported?

•    All in-house payroll
•    Voided checks
•    Employee pension information
•    Group term life adjustments
•    Tax deposits made for an amount other than the amount on the deposit notice
•    Tip allocations for TEFRA
•    Compensation adjustments paid to employees that need to be included on employee Form W-2 (i.e., charitable contributions, union dues)
•    Other amounts in Form W-2, Box 14
•    Any premiums for health and accident insurance paid by an S corporation on behalf of 2 percent shareholders/employees
•    Taxable cash and non-cash fringe benefits (i.e., personal use of a company car)
•    Third-party sick pay insurance benefits
•    Educational assistance reimbursements
•    Any dependent care services provided to employees under an employer-sponsored program
•    Identification numbers for every tax agency

Has this information been verified?

•    Employees’ names and addresses
•    Employees’ social security numbers (SSNs)
•    1099 payees’ SSNs or taxpayer ID numbers
•    Identification numbers for state and local agencies on each return

The items in these lists may seem basic, but year after year, we see that not reporting or providing inaccurate information for one or more of these items results in some of the most commonly made mistakes and creates time consuming work for the CPA; which can be avoided

 

Year-End Tax Tips and Reporting Checklist - Retirement Plans

If you are considering starting a retirement plan for your employees, doing so before the end of the year will enable you to write off some of the setup expenses, as well as enjoy the tax advantages of any plan contributions. However you do not have to start contributing until next year.

http://retireplan.about.com/od/howtobegin/a/start.htm