Basics and Beyond Income Tax Seminars

IRS PROVIDES A NEW WAY TO LOOK UP ECONOMIC RECOVERY PAYMENTS (March 2010) SUMMARY: The IRS has now provided taxpayers with a simplified method for determining whether they received an economic recovery payment in 2009.

IRS: SOME TAXPAYERS FILE PAPER RETURNS AT NEW CENTERS THIS YEAR (February 2010) SUMMARY: The IRS announced that taxpayers in nine state and the Disctrict of Columbia will file paper returns at new service centers this year.

IRS ANSWERS QUESTIONS ABOUT TAX RETURN PREPARER REGISTRATION AND TESTING (February 2010) SUMMARY: In January, the IRS announced that it intends to require individuals who are required to sign a federal tax return as paid return preparer to register with the IRS and pay a user fee. Since the announcement, the IRS has received and answered a number of questions regarding the registration and testing proposal.

IRS PROPOSES TO REQUIRE DISCLOSURE OF UNCERTAIN TAX POSITIONS (January 2010) SUMMARY: On Tuesday, January 26, 2010, the IRS announced a proposal that, if effective, would require many companies to disclose uncertain tax positions in their annual income tax return filings.

HAITI DISASTER CONTRIBUTIONS DEDUCTIBLE IN 2009 (January 2010) SUMMARY: President Obama signed into law a bill that allows donors to accelerate the income tax benefits of charitable cash contributions for the relief of victims of the earthquake in Haiti.

OBTAINING INFORMATION ABOUT ARRA'S $250 ERP PAYMENT (January 2010) SUMMARY: The IRS will not be providing information as to whether a taxpayer received the 2008 $250 Economic Recovery Pament.

IRS PLANS NEW PAID TAX PREPARER REQUIREMENTS (January 2010) SUMMARY: The IRS has issued a recommendation as to a number of steps that it plans to implement for future filing seasons that are intended to better leverage the tax return preparer community, fostering higher compliance with the law by taxpayers and better service to taxpayers through higher standards of conduct by paid return preparers.

IRS RELEASES 2009 HOMEBUYER CREDIT FORM 5405 (Janury 2010) SUMMARY: The long-awaited final version of the 2009 New Homebuyer Credit Form 5405 was released on January 15th. This form must be used whenever a credit is claimed for a home purchased after November 6, 2009.

COBRA SUBSIDY EXTENDED (December 2009) SUMMARY: The the Department of Defense Appropriations Act of 2010 incuded a house amendment that, among other things, extended the Cobra Subsidy peiord for an additional six months.

HOUSE PASSES FINANCIAL REFORM ACT (December 2009) SUMMARY: The U.S. House of Representatives on December 11 adopted a sweeping financial re-regulation bill, “The Wall Street Reform and Consumer Protection Act of 2009,” by a vote of 223 to 202.

DES MOINES SEMINAR MATERIALS SHIPPED (December 2009) SUMMARY: In the hope that it will help those who registered for Des Moines seminar, could not attend due to the blizzard and couldn't transfer to any of our other seminars, we're including a free self-study examination along with your Year-end Update Seminar materials.

WORKER, HOMEOWNERSHIP & BUSINESS ASSISTANCE ACT IS NOW LAW (November 2009) SUMMARY: On November 6, 2009 President Obama signed H.R. 3548, the ''Worker, Homeownership, and Business Assistance Act of 2009'' (the Act). For individuals, the act extends and liberalizes the first time homebuyer tax credit (FTHTC). Changes for businesses include modifications to return filing and penalties, an unemployment benefit extension, plus liberalized rules for net operating losses and toughened penalties for partnerships and S corporations.

CFP BOARD CHANGES ETHICS ACCREDITATION RULES (October 2009) SUMMARY: We have just been notified by the CFP Board that it no longer accredits any ethics credit request submission that does not deal exclusively with the CFP Board's Code of Ethics and Professional Standards.

IRS HAS FORM 941 PROCESSING PROBLEMS (October 2009) SUMMARY: During the last two quarters, the IRS sent CP 207 notices to taxpayers that asked them to submit Form 941, Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, even though they had submitted the form with their paper filed return.

FEDERAL "CASH FOR CLUNKERS" VOUCHERS PASSES CONGERSS (June 2009) SUMMARY: Congress included in the appropriations a program whereby consumers will get a voucher of $3,500 or $4,500 depending on the type of vehicle traded in and the fuel efficiency of the vehicle purchased.

PRESIDENT SIGNS RECOVERY ACT ON TUESDAY (February 2009) SUMMARY: This weekend Congress passed the American Recovery and Reinvestment Act of 2009 (the Recovery Act), a stimulus bill that includes tax breaks for businesses and individuals. The President is scheduled to sign the Act into law on Tuesday February 17th.

IRS CHANGES TAXPAY PAYMENT CENTERS IMMEDIATELY (January 2009) SUMMARY: On January 1, 2009, the Internal Revenue Service will discontinue operations at the Dallas, Texas lockbox facility. The changes affect five states for individual taxpayers and 23 states for business taxpayers.

CONGRESS PASSES WORKER, RETIREE & EMPLOYER RECOVERY ACT OF 2008 (December 2008) SUMMARY: In lightening speed, the House and Senate have both passed the “Worker, Retiree, and Employer Recovery Act of 2008” (H.R. 7327) by unanimous consent.

IRS DROPS AUTO REIMBURSEMENT RATES FOR 2009 (November 2008) SUMMARY: The IRS announces new lower automobile reimburse- ment rates for miles driven after 12/31/08.

PRESIDENT SIGNS EMERGENCY BAILOUT ACT INTO LAW (October 2008) SUMMARY: On Friday, October 3, 2008 President Bush signed into law a historic $700 billion bailout of the financial services industry that includes a number of tax provisions and a provision that temporarily increases the amount of federal insurance for bank deposits from $100,000 to $250,000.

NEW LAW LETS STATES GRAB REFUND TO PAY UNEMPLOYMENT DEBT (October 2008) SUMMARY: The recently signed SSI Extension for Elderly and Disabled Refugees Act, amends IRC §6402 to allow the IRS to offset an individual's federal income tax overpayment by any amount owed to a State for a “covered unemployment compensation debt.”

FUNERAL TRUST LIMITS REPEALED (September 2008) SUMMARY: For tax years beginning after Aug. 29, 2008 (the enactment date), the Hubbard Act repeals the Code Sec. 685(c) dollar limit on contributions to a qualified funeral trust. (Act § 9)

CONGRESS PASSES 2008 HOUSING ACT CONTAINING MANY TAX CHANGES (July 2008 ) SUMMARY: In addition to provisions designed to shore up the ailing housing market, tighten lending practices and reform financial institutions associated with that market, the 2008 Housing Act contains 96 pages of tax law changes that include new tax breaks for homeowners and businesses, eased AMT rules, revised REIT rules and a number of other provisions including a variety of provisions designed to pay costs associated with the act.

58 1/2 CENT MILEAGE RATE FOR LAST HALF OF THE YEAR (June 2008 ) SUMMARY: This week the IRS announced an increase in the optional standard mileage rates to 58 1/2 cents per mile for the final six months of 2008.

IOWA EXTENDS FILING FOR TORNADO & FLOOD VICTIMS (June 2008 ) SUMMARY: Taxpayers affected by tornadoes and flooding will have additional time to file Iowa tax returns and pay Iowa tax.

IOWA SALES TAX GOES TO 6% ON JULY 1
(June 2008 ) SUMMARY: During the recently ended legislative session, Iowa increased its sales tax rate from 5% to 6% and eliminated the 1% add-on School Local Option Sales Tax. Hotel and Motel Lodging and short-term auto rentals are exempt from this increase.

2008 HEROS ACT SIGNED INTO LAW (June 2008 )
SUMMARY: The recently enacted “Heroes Earnings Assistance and Relief Tax Act of 2008” (the 2008 Heroes Act) provides targeted tax relief for military members and their families, fully offset with tightened expatriation rules, a new rule requiring U.S. companies working under federal government contract to treat overseas employees as subject to employment taxes, and a higher failure to file penalty.

CONGRESS OVER-RIDES FARM BILL VETO AND PASSES 2008 FARM ACT. (May 2008) SUMMARY: The "Heartland, Habitat, Harves and Horticulture Act of 2008" (the 2008 Farm Act) contains a package of tax changes including specialized tax breaks for the farming industry (along with a crackdown on farm losses) and new and modified credits related to the production of certain fuels, among other things.

IRS PROVIDES MORE DETAILS ABOUT HOW REBATES WILL WORK
(February 2008 ) SUMMARY: During a February 22nd press conference, IRS Acting Commis- sioner Linda Stiff provided details about how the 2008 rebate will be paid.

FARMERS & FISHERMEN WHO EFILE WITH FORM 4136 ATTACHED HAVE UNTIL MARCH 10th TO FILE & PAY (February 2008 ) SUMMARY: Due to a recent revision of Form 4136, farmers and fishermen who efile their income tax reutnrs with a Form 4136 get extra time to efile and pay.

IRS TELLS HOW TO GET REBATE IF YOU DON'T NEED TO FILE A 2007 RETURN (February 2008 ) SUMMARY: The IRS explaines procedure for taxpayers who do not need to file 2007 tax returns can get a rebate.

PRESIDENT SIGNS STIMULUS BILL (February 2008 ) SUMMARY: President Bush signed the Economic Stimulus Act of 2008 on February 13, 2008. The act includes rebates for most tax filers.

USE NEW FORM 982 FOR MORTGAGE WORKOUTS (February 2008 ) SUMMARY: This IRS has released new Form 982 for use by homeowners whose mortgage debt was partly or entirely forgiven during 2007 who are elegible to claim tax relief under the Mortgage Forgiveness Debt Relief Act of 2007 (Mortgage Relief Act, P.L. 110-142)

IRS MOVES QUICKLY ON AMT PATCH, BUT SOME RETURNS WILL BE DELAYED (January 2008 )
SUMMARY: The IRS announced that it will begin processing most income tax returns in mid-Jamuary including returns that include Form 6251, AMT-Individuals. However taxpayers whose returns include five other schedules will not be able to file until mid-February.

PRESIDENT SIGNS ONE YEAR AMT PATCH INTO LAW (Decemebr 2007)
SUMMARY: On December 26, 2007, the president signed the Tax Increase Prevention Act into law. As a result, the 2007 AMT exemption amount is will increase to $66,250 for joint filers and $44,350 for individuals.

2007 MORTGAGE RELIEF ACT ON WAY TO PRESIDENT (Decemebr 2007)
SUMMARY: Among several tax changes contained in the 2007 Mortgage Relief Act is a provision effective for indebtedness discharged on or after Jan. 1, 2007 and before Jan. 1, 2010, that states taxpayers generally may exclude from income up to $2 million of mortgage debt forgiveness on their principal residence.

IRS EASES DEPENDENCY REQUIREMENTS FOR QUALIFIYING RELATIVE (Decemebr 2007)
SUMMARY: The IRS has provided an administrative exception to Code Sec. 152(d)(1)(D), which provides that an individual is not a qualifying relative of the taxpayer if the individual is a qualifying child of any other taxpayer.

IRS: 2% S CORPORATION SHAREHOLDERS GET ABOVE-THE-LINE COMPANY-PAID HEALTH INSURANCE DEDUCTION (Decemebr 2007)
SUMMARY: Without affirmatively saying so, Notice 2008-1 effectively repudiates last year's guidance on the IRS web site warning that an S corporation's sole shareholder-employee could not buy health insurance in his own name and get the above-the-line deduction for the premium expense.

CLARIFICATION RE: $3000 "CATCH-UP" IRA CONTRIBUTION FOR SOME PARTICIPANTS IN A BANKRUPT EMPLOYER 401(k) PLAN (Decemebr 2007)
SUMMARY: Some participants in a bankrupt employer- sponsered 401(k) can contribute an extra $3,000 to their IRAs in 2007, 2008 and 2009.

HOW TO COMPUTE NEW ERRONEOUS REFUND CLAIM PENALTY (Decemebr 2007)
SUMMARY: An IRS Internal Legal Memorandum explains how to compute the new penalty on excessive refunds claims where no reasonable basis exists for requesting the excess refund.

50.5¢ BUSINESS STANDARD MILEAGE RATE FOR 2008 —Other Rates Decrease (Novemebr 2007) SUMMARY: The IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) is 50.5¢ per mile for business travel after 2007. The optional mileage rate for medical and moving drops to 19¢.

IRS ISSUES PROPOSED REGS THAT TOUGHEN RETURN PREPARATION STANDARDS (September 2007)
SUMMARY: IRS has issued proposed regs that would modify the Circular 230 tax return preparation standards to reflect the preparer penalty changes made under the Small Business and Work Opportunity Act of 2007. These changes would be effective when the regs are finalized, but not earlier than Jan. 1, 2008.

IRS CLARIFIES LIMITS ON 2007 SEC. 179 EXPENSING (September 2007)
SUMMARY: In response to changes in the 2007 Tax Act, the IRS has modified its previous position as to the maximum amounts that can be expensed under Code Section 179.

"DEFENDERS OF FREEDOM TAX RELIEF ACT OF 2007 INTRODUCED" (June 2007)
SUMMARY: Senate leadership introduced a new tax act with new tax benefits for those who serve in our armed forces.

NEW CFP ETHICS RULES ADOPTED (June 2007)
SUMMARY: The CFP Board of Directors recently adopted a revised version of its Standards of Professional Conduct, which set forth the ethical standards for CERTIFIED FINANCIAL PLANNER™ professionals. The revised standards become effective July 1, 2008.

IOWA ADDS SEVERAL NEW LOCAL OPTION SALES TAX JURSIDCTIONS (June 2007)
SUMMARY: On July 1st Iowa adds 44 new local option sales tax jurisdictions and in Johnson and Linn counties a school local option tax.

IOWA TAX AMNESTY WILL RUN FROM SEPTEMBER 4th THROUGH OCTOBER 31st (June 2007)
SUMMARY: Governer Culver signed into law an amnesty bill that for taxpayers who meet its requirements will eliminate penalties and half the interest due on many delinquent Iowa tax obligations.

PRESIDENT SIGNS BILL WITH TAX RELIEF AND MINIMUM WAGE INCREASES (May 2007)
SUMMARY: Congress passed and on May 25th, the president signed a revised Iraq spending bill that containes both minimum wage increases and $4.8 Billion of small business tax incentives.

PRESIDENT VETOES WAR SPENDING BILL (May 2007)
SUMMARY: On May 1, the president vetoed a war spending bill that contained billions in small business tax relief.

NO PENALITES FOR APRIL 16 STORM-DELAYED RETURNS FILED BY APRIL 26 (April 2007)
SUMMARY: IRS will not impose late payment or late filing penalties on returns impacted by April 16 storm if returns are filed by April 26.

CONFEREES APPROVE 2007 APPROPRIATIONS BILL CONTAINING SMALL BUSINESS TAX RELIEF (April 2007)
SUMMARY: On April 23rd, House and Senate conferees reached agreement on the supplemental appropriations bill that included a $4.84 billion package of small business tax incentives.

PAYMENT & FILING DATE EXTENDED FOR THOSE IMPACTED BY VIRGINIA TECH SLAYINGS (April 2007)
SUMMARY: The due date for filing and paying tax is October 15th for those impacted by slayings at Virginia Tech.

IOWA EXTENDS FARM TAX RETURN DUE DATE TO MARCH 15 (March 2007)
SUMMARY: The due date for filing Iowa farm income tax returns has been changed to March 15, 2007.

IRS TO WAIVE SOME LATE FARM ESTIMATED TAX PAYMENTS (March 2007)
SUMMARY: On request, the Internal Revenue Service will waive penalties on late estimated farm income tax payments.

SENATE PASSED WAGE BILL HAS TAX CHANGES (February 2007)
SUMMARY: The Senate's minimum wage bill (the "Fair Minimum Wage Act of 2007"), passed by a 94 to 3 vote in its favor on Thursday Feb. 1, contains business tax breaks and deferred compensation changes that makes it questionable as to when or if the House will take up the measure.

APRIL 17 IS DUE DATE FOR FEDERAL CALENDAR 2006 RETURNS (January 2007)
SUMMARY: The IRS announced today that because April 15 falls on Sunday and April 16 is a holdiay in the District of Columbia, Calendar 2006 and many other returns will be due on Tuesday, April 17th .

IRS PLANS FEB 3 START FOR PROCESSING EXTENDER RETURNS (January 2007)
SUMMARY: The Internal Revenue Service plans a February 3 start date for processing tax returns that claim key tax provisions enacted in December.

AICPA ASKS IRS TO MODIFY S-CORP SHAREHOLDER ABOVE THE LINE HEALTH CARE DEDUCTION RULING (January 2007)
SUMMARY: The AICPA has sent a proposed revenue ruling to the IRS to help provide clarifying guidance regarding the deductibility of health insurance premiums covering S corporation shareholders.

IRS EXPLAINS HOW TO HANDLE TRAHCA-EXTENDED DEDUCTIONS AND WARNS OF PROCESSING DELAYS (December 2006)
SUMMARY: The IRS recently issued guidance as to how to handle several of the most popular of the deductions extended by the recently passed Tax Relief and Health Care Act of 2006 (TRAHCA). At the same time, the Service warned that the processing of some 930,000 forms received in January will be delayed until early February while its software is updated.

PRESIDENT SIGNS TAX RELIEF AND HEALTH CARE ACT OF 2006 (December 2006)
SUMMARY: On December 20, the president signed a bill that extends and/or modifies many important tax provisions, including key tax breaks that expired at the end of 2005.

IOWA 2006 INDIVIDUAL TAX UPDATE FROM IA DEPT. OF REVENUE (December 2006)
SUMMARY: The Iowa Department of Revenue recently released an overview of Iowa Individual Income Tax changes for 2006.

IRS CLARIFIES WHEN NEW CONTRIBUTION RULES TAKE EFFECT. (December 2006)
SUMMARY: New cash contibution rules do not take effect until 2007 for most taxpayers, but new rules apply to contributions of clothing and household goods made after 8/17/06.

CONGRESS SENDS INNOCENT SPOUSE BILL TO PRESIDENT
(December 2006)
SUMMARY: Congress passed and is sending the president a bill allowing the Tax Court to review claims for equitable innocent spouse relief, and is suspending the running of the limitations period while such claims are pending.

FORM 1098-T IS NOT ACCEPTABLE DOCUMENTATION FOR EDUCATION EXPENSES
(November 2006)
SUMMARY: The IRS reminds preparers that FORM 1098-T is not acceptable support for education expense deductions or credits.

SOCIAL SECURITY ANNOUNCES 2007 COLA-ADJUSTED EARNINGS LIMITS AND BENEFITS
(October 2006)
SUMMARY: Maximum social security taxable income will climb to $97,500 in 2007, an increase of $3,300 from 2006's $94,200. Article contains a link to the Social Security Administration's other 2007 wage limit changes and the related 3.3% cost of living adjusted benefits that will become effective January 1, 2007.

ELECTRONIC TRANSCRIPTS AVAILABLE ONLINE (October 2006)
SUMMARY: The IRS announced that electronic delivery of IRS transcripts and records is now avaliable in two business days upon submission of IRS Form 4506-T, Request for Transcript of Tax Return.

PER DIEM RATES ISSUED FOR YEAR BEGINNING IN OCTOBER 2006 (August 2006)
SUMMARY: The GSA has issued the new federal domestic per diem rate table for fiscal year 2007. The maximum standard per diem rate for locations not listed in the table remains at $99 (maximum lodging rate of $60 and maximum meal and incidental expense rate of $39).

PRESIDENT SIGNS PENSION ACT OF 2006 ON AUGUST 17th (August 2006)
SUMMARY: On August 17th, the President signed the Pension Protection Act of 2006, a massive tax bill that (1) overhauls the funding and disclosure rules for defined benefit pension plans, (2) changes the rules for conversions of pension plans to cash balance plans, and (3) makes many other changes relating to pension plans and their beneficiaries. It also revises some charitable giving rules and makes exempt-organization reforms.

FEDERAL LAW LIMITS STATE TAXES ON NONRESIDENT RETIREMENT BENEFITS (August 2006)
SUMMARY: On Aug. 3, the President signed into law H.R.4019, which clarifies the treatment of self-employment for purposes of the limitation on State taxation of retirement income. (P.L. 109-284) Under the new law, retirement income of all retirees, whether they were employees or partners before retirement, will be treated in the same manner for state tax purposes.

TOUGH NEW OFFER IN COMPROMISE RULES TAKE EFFECT JULY 16 (July 2006)
SUMMARY: Among several new requirements in the new rules: taxpayers submitting lump-sum offers must make a 20% nonrefundable, up-front payment to IRS. Similarly, taxpayers submitting a periodic payment OIC must make a nonrefundable, up-front payment of the first proposed payments, while IRS evaluates the offer.

IRS RELEASES NEW FORM 8453-T FOR CERTAIN CORPORATIONS REQUIRED TO EFILE (June 2006)
SUMMARY: The IRS has released a new transmittal form for ccorporations that are required to file Form 1120 or Form 1120S electronically and that are also required to file at least 25 of the international forms listed on the Form 8453-T.

TIPRA RETROACTIVELY INCREASES TAX ON AMERICANS LIVING ABROAD (June 2006)
SUMMARY: Retroactive changes for tax years beginning after 2005 as to how the foreign earned income and housing cost exclusions are computed under provisions of the Tax Increase Prevention and Reconciliation Act can drastically increase the tax bills of Americans working abroad.

"TAX INCREASE PROTECTION AND RECONCILIATION ACT" IS SIGNED INTO LAW (May 2006)
SUMMARY: On May 17, 2006, the President signed into law the "Tax Increase Prevention and Reconciliation Act" or TIPRA (the measure that had been formerly referred to as the tax reconciliation bill). Highlights of the act are outlined in this article.

LEGISLATION INTRODUCED TO CLARIFY WHEN OUT-OF-STATE BUSINESS IS REQUIRED TO PAY TAX (May 2006)
SUMMARY: Legislation has been introduced in Congress that would establish a physical presence test to determine when an out-of-state business would be required to pay taxes to a jurisdiction. The Business Activity Tax Simplification Act (H.R. 1956, S2721) is designed to bring predictability to what is seen as an unpredictable sales tax environment .

INSTRUCTIONS PROVIDE NEW GUIDANCE ON DOMESTIC PRODUCTION ACTIVITIES DEDUCTION (March 2006)
SUMMARY: New Form 8903 (Domestic Production Activities Deduction) instructions, along with revised instructions to Form 1120S (U.S. Income Tax Return for an S Corporation) and Form 1065 (U.S. Partnership Return of Income) carry additional guidance on some, but not all, aspects of the new-for-tax-year 2005 Code Sec. 199 deduction.

IRS ISSUES PROPOSED CIRCULAR 230 REGS (February 2006)
SUMMARY: IRS has issued proposed regs on the rules governing practice before IRS, which are commonly known as Treasury Department Circular 230. The changes would include: the definition of practice, eligibility for enrollment, limited practice, contingent fees, conflicts of interest, and standards with respect to tax returns and documents. The proposed regs would be effective when published as final regs.

DELAYED FEDERAL FORMS CAN BE E-FILED STARTING Feb. 1 (February 2006)
SUMMARY: The thirteen delayed Federal forms that were not available for e-filing are to be enabled for electronic filing, starting February 1, 2006.

REGISTER WITH IRS FOR NEW "QUICK ALERTS". (February 2006)
SUMMARY: As a professional tax preparer, if you have not already signed up for the new free IRS QuickAlerts service, we recommend that you do so.

NEW FEDERAL MAILING ADRESSES FOR CO, DE, KS, MD, MS, NE, NM, OH, SD, VA, and WV (January 2006)
SUMMARY: IRS cautions that some taxpayers will be sending their returns to a different service center than last year. [IR 2006-16]

THIRTEEN FEDERAL FORMS CANNOT BE E-FILED UNTIL LATE JANUARY. (January 2006)
SUMMARY: IRS announces that thirteen 2005 tax forms not available for e-filing until late January due to recent tax legislation [IR 2006-14] and suggests waiting to e-file because paper filing now will likely delay refunds beyond that expected once e-filing of the thirteen forms is available.

CONGRESS PASSES GULF OPPORTUNITY ZONE ACT OF 2005. (December 2005)
SUMMARY: On Dec. 21, President Bush at a White House ceremony signed into law H.R. 4440, the "Gulf Opportunities Zone Act of 2005." Despite its title, the Act is not limited to tax provisions that encourage rebuilding of the areas ravaged by hurricanes Katrina, Rita and Wilma.

IRS RELEASES 2006 MILEAGE RATES . (November 2005)
SUMMARY: IRS has announced that the optional standard mileage rate has decreased 4¢ to 44.5¢ a mile for all business miles driven after 2005, down from 48.5¢ for the last four months of 2005. The rate for computing deductible medical or moving expenses after 2005 is decreased to 18¢ a mile, down from 22¢ for the last four months of 2005.

IRS RELEASES PROPOSED REGS FOR DOMESTIC PRODUCTION ACTIVITY DEDUCTION. (November 2005)
SUMMARY: A taxpayer may claim a deduction from gross income for an applicable percentage of qualified domestic production activities subject to certain limits. The deduction is specifically designed to be economically equivalent to a 3-percentage point reduction in the corporate tax rate for United States based manufacturers.

NEW FICA EARNINGS LIMITS AND RETIREMENT BENEFIT ADJUSTMENT ANNOUNCED. (October 2005)
SUMMARY: On October 14th the Social Security Administration announced the 2006 adjustment amounts related to earnings levels and retirement benefits.

KATRINA EMERGENCY TAX RELIEF ACT SIGNED INTO LAW (September 2005)
SUMMARY: KETRA, the first of two planned legislative initiatives dealing with the aftermath of Katrina and features provisions designed to provide immediate relief to individuals and businesses was signed into law by the President on September 23, 2005.

FEDERAL STANDARD MILEAGE RATE INCREASES ON SEPTEMBER 1, 2005 (September 2005)
SUMMARY: IRS has announced that the optional standard mileage rate has increased 8¢ to 48.5¢ a mile for all business miles driven between Sept. 1 and Dec. 31, 2005, up from 40.5¢ for the first eight months of 2005. The rate for computing deductible medical or moving expenses between Sept. 1 and Dec. 31, 2005 is boosted to 22¢ a mile, up from 15¢ for the first eight months of 2005.

HURRICANE KATRINA: HOW EMPLOYERS MIGHT RESPOND (September 2005)
SUMMARY: In the aftermath of Hurricane Katrina, many employers and coworkers would like to extend additional, immediate assistance to affected individuals. IRS Code Sec. 139(a) and related sections set the rules for how assistance made can be deductible by the employer and tax-free to the recipient.

IRS CLARIFIES DEALING WITH PROBLEMATIC W-4s. (August 2005)
SUMMARY: On its website, IRS has posted 12 questions and answers that provide new details on how employers should handle questionable W-4s. The Q&As follow up on the regs issued in April 2005 (T.D. 9196, 04/13/2005) that, among other changes, dropped the requirement that employers send IRS a copy of each Form W-4 on which an employee claims more than 10 withholding exemptions. In particular, the Q&As provide new details on procedures to follow after IRS issues a "lock in" letter pertaining to a particular employee (i.e. a letter specifying a withholding rate).

TAX INCENTIVES IN NEW ENERGY ACT. (August 2005)
SUMMARY: The Energy Tax Incentives Act of 2005 contains a wide array of tax incentives for the oil, gas, coal, and nuclear industries. Aimed at increasing energy production, the incentives generally consist of cost recovery changes and tax credits.

IOWA LEGILATURE COUPLES WITH IRS CODE THROUGH JANUARY 31, 2005. (April 2005)
SUMMARY: Iowa Revenue Code is now coupled with the Internal Revenue Code through January 31, 2005 except that Iowa continues to decouple with the 30% "bonus depreciation" for assets acquired after September 10, 2001, but before May 6, 2003.

IOWA CHANGES RULES RELATING TO 50% BONUS DEPRECIATION RECOUPLING (February 2005)
SUMMARY: On February 25, 2005 the Iowa Legislature approved a bill that will allow adjustments on a taxpayer's 2004 or 2005 returns for previously undeducted additional 50% first-year depreciation allowance (bonus depreciation) for assets acquired after May 5, 2003, but before January 1, 2005. There are three ways that this can be done.

AICPA CHANGES NON-ATTEST RULES (FEBRUARY 2005)
SUMMARY: The AICPA's Professional Ethics Executive Committee has adopted revisions to Interpretation 101-3 - Performance of Non-attest Services. The changes do not relax or change the meaning of the rule but do provide clarification on the applicability and intent of the rule.

NEW IOWA WITHHOLDING TABLES ON APRIL 1, 2005 (February 2005)
SUMMARY: Iowa employers will be reducing the amount of Iowa tax deducted from employees' paychecks beginning April 1. The Iowa Department of Revenue will mail the new tax tables and formulas to more than 80,000 withholding agents at the end of February.

CONGRESS APPROVES 2005 TSUNAMI CONTRIBUTION AS 2004 TAX DEDUCTION [January 2005]
SUMMARY: On Jan. 6, both the House and Senate approved H.R. 241, which would extend until January 31, 2005, the period of time in which taxpayers can make charitable contributions to assist victims of the recent tsunami and deduct the contributions on their 2004 returns. President expected to sign the act soon.

IRS SALES TAX TABLES (PUB 600) RELEASED (December 2004)
SUMMARY: Use the link in this article to download IRS has Publication 600 which contains the optional sales tax tables that can be used by those who elect to deduct sales taxes rather than income taxes as an itemized deduction.

IRS ISSUES INSTRUCTIONS FOR NEW FORM M-3 (December 2004)
SUMMARY: The Treasury Department and Internal Revenue Service on December 2, 2004 released the final instructions for the Schedule M-3, Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 million or more.

DAYCARE PROVIDERS: 2004 PUB 587 HAS WRONG MEAL RATES (November 2004)
SUMMARY: The original version of 2004 PUB 587 has a major error regarding the standard meal allowance rate. The rates published in the pre-November 30, 2004 version are the 2003 standard meal allowance rates, not the 2004 rates.

NEW ETHICS REQUIREMENT FOR THOSE WHO OUTSOURCE (November 2004)
SUMMARY: The AICPA has placed new requirements on those members who outsource clients' work to third-party providers, including all independent contractors used by the firm.

NEW FICA EARNINGS LIMITS AND RETIREMENT BENEFIT ADJUSTMENT ANNOUNCED. (October 2004)
SUMMARY: On October 14th the Social Security Administration announced the 2005 adjustment amounts related to earnings levels and retirement benefits.

PRESIDENT SIGNS CORPORATE TAX ACT ON OCTOBER 22ND (October 2004)
SUMMARY: On October 12th, the Senate passed The American Jobs Creation Act of 2004, a $137 billion corporate tax bill that gave something to almost everyone. The House previously passed the bill and it is being sent on to President Bush who is expected to sign it.

CONGRESS PASSES "THE WORKING FAMILY TAX RELIEF ACT OF 2004". (September 2004)
SUMMARY: On September 23, 2004, the House and Senate passed a $146 billion package of tax breaks aimed primarily at middle-income taxpayers and at businesses.

IOWA COUPLES WITH BONUS DEPRECIATION (September 2004)
SUMMARY: In a special session held in September 2004, the Iowa legislature passed legislation to couple with the additional 50% first-year depreciation allowance (bonus depreciation) for assets placed in service after May 5, 2003, but before January 1, 2005.

DOL REVISES OVERTIME PAY RULES (August 2004)
SUMMARY: The U.S. Department of Labor (DOL) issued final regulations to federal overtime pay requirements under the Fair Labor Standards Act (FLSA). The “FairPay Overtime Initiative”, which becomes effective on August 23, 2004, was published in the April 23, 2004 Federal Register.

IOWA TO BEGIN BUSINESS E-FILING IN JANUARY 2005 (August 2004)
SUMMARY: January 2005, the Iowa Department of Revenue will launch Business E-File, allowing employers to file and remit Iowa withholding tax electronically, either online or by touch-tone telephone. Development is now in progress, with a demonstration model scheduled to be available in early December.

NEW E-SERVICES PRODUCTS FOR TAX PROFESSIONALS WHO E-FILE (August 2004)
SUMMARY: Tax professionals can now use two more IRS tools to help them improve service to their clients: Electronic filing of disclosure authorization and powers-of-attorney and Electronic Account Resolution via E-mail.

SENATE POSTPONES ACTION ON 2004 TAX ACT UNTIL SEPTEMBER. (July 2004)
SUMMARY: Election year politics are clouding the prospects for a speedy passage of the 2004 Tax Act. The Senate Finance Committee has decided to postpone consideration of the act until after congress returns from its six-week August recess.

SIX-MONTH "LEARNING PERIOD" FOR IOWA SALES TAX CHANGES (July 2004) J
SUMMARY: In 2003, Iowa law was changed (effective July 1, 2004 ) regarding how the sales tax is sourced or applied. The most significant change affects how sales taxes are collected by businesses shipping or delivering their products by common carrier to customers in several locations.

BILL REGULATING TAX PREPARERS BACK IN SENATE FINANCE COMMITTEE (June 2004)
SUMMARY: On May 19, 2004, the United States Senate passed the Tax Administration Good Government Act (HR 1528). Buried in the legislation is a provision that would regulate the estimated half-million or so non-licensed tax return preparers.

IRS INTRODUCES E-FILING FOR CORPORATIONS AND EXEMPT ORGANIZATIONS (June 2004)
SUMMARY: Corporations and tax-exempt groups can reduce the time it takes to file their Forms 1120 and 990 simply by filing them electronically.

IOWA SALES TAX HOLIDAY AUGUST 6th AND 7th (May 2004)
SUMMARY: On Friday, August 6th and Saturday, August 7th, no sales tax, including school and "regular" local option sales taxes, will be collected on everyday wearing apparel and typical footwear with a selling price of less than $100 each.

TAXPAYERS (and their accountants) MAY OBTAIN EMPLOYER ID NUMBERS DIRECTLY OFF THE WEB (June 2003)
SUMMARY: The IRS announced that businesses may now obtain identification numbers directly from its Web site. The taxpayer merely has to complete an application form online and the system instantly issues an employer identification number (EIN) that may be used immediately.

CONGRESS PASSES THE JOBS AND GROWTH ACT OF 2003 (June 2003)
SUMMARY: On May 22nd the Conference Committee's proposal for a $350 billion tax cut bill was approved by Congress. The "Jobs and Growth Tax Act of 2003" was sent on to President Bush who signed the bill on May 28, 2003.

IRS ANNOUNCES NEW SERVICE CENTER ADDRESSES FOR FILING INDIVIDUAL INCOME TAX RETURNS DURING 2003 TAX SEASON.
SUMMARY: The IRS has revealed that some taxpayers will be filing their tax returns at different locations from the previous year. August 2002

NEW IOWA LOCAL SALES TAX JURISDICTIONS EFFECTIVE JULY 1, 2001.
SUMMARY: Voters in the following four Iowa counties adopted the 1 percent school local option sales tax effective July 1, 2002: Allamakee County (03), Jackson County (49), Pottawattamie County (78) and Union County (88). In addition, a number of other locations adopted the regular local sales tax option effective July 1, 2002.

NEBRASKA REQUIRES ADD BACK OF 85% of NEW FEDERAL LAW'S BONUS DEPRECIATION.
SUMMARY: Although Nebraska law usually follows Federal law, the recently enacted Nebraska budget bill requires an add back of 85% of bonus depreciation received under the new federal law.

2002 IOWA LEGISLATIVE SESSION PASSES INCOME TAX LEGISLATION.
SUMMARY: The recently ended Iowa Legislative session passed laws that (1) updates Iowa's Tax Code references to the Internal Revenue Code through January 31, 2002; (2) exempts from Iowa income tax any Federal tax rate reduction credit received under the Economic Growth and Tax Relief Reconciliation Act of 2001; (3) repeals an Iowa adjustment relating to certain sales that could not be reported using the Federal installment method; and (4) changes reciprocal tax agreements with other states.

IOWA STATUS ON COUPLING WITH FEDERAL ECONOMIC STIMULUS BILL
SUMMARY: As of March 26, 2002 - House File 2116 recently passed by the Iowa Legislature (and expected to be signed by the Governor) has only updated the references to the Internal Revenue Code as of January 31, 2002. This encompasses the federal tax changes made in 2001, but does not include the changes made in March 2002 relating to the economic stimulus bill.

WEIGHT LOSS PROGRAMS MAY BE DEDUCTIBLE.
SUMMARY: New (March 2002) IRS Ruling ( Rev Rul 2002-19 ) impacts returns now being filed and may generate refunds for returns going as far back as 1998.

THE JOB CREATION AND WORKER ASSISTANCE ACT of 2002 (March 2002)
SUMMARY: Signed into law on March 9, 2002, includes provisions retroactive to September 2001.

IOWA INCOME TAX UPDATE (March 2002) SUMMARY: In this update:
New return for auto rental and hotel/motel tax

Local option form correction
Security and detective services and Iowa taxes
Reducing errors on forms and more!

PRACTITIONER HOTLINES TOLL-FREE NUMBER: 1-866-860-4259

IOWA INCOME TAX UPDATE (December 2001) SUMMARY: In this update:

Rental property capital gain change not in long-form instruction book
E-File information
On-line payment information Miscellaneous updates and reminders

IRS UPDATE (November 2001) SUMMARY: In this update:

The New and Improved Offer-in-Compromise Program
Taxpayers Can Now Pay All Federal Taxes On The Web
Order Your IRS 2001 Federal Tax Products on CD-ROM
Taxpayers Rights & Alternative Dispute Resolution CD-ROM

SAMPLE PRIVACY POLICY NOTIFICATION SUMMARY: An example of a privacy policy notification that is being used by Tax Professionals to advise clients as required by law.

NEW PROCEDURE FOR OBTAINING AN EMPLOYER ID# (January 2002) SUMMARY: It's going to be easier to apply for an Employer ID#. If you are with your client, you can get it over the phone. If not, you can have the ID# faxed immediately.