IRS e-News for Tax Professionals-2010-04

In a News Release the Internal Revenue Service today announced the designation of the earthquake in Haiti in January 2010 as a qualified disaster for federal tax purposes. The agency also issued guidance allowing recipients of qualified disaster relief payments to exclude those payments from income on their tax returns. Also, the guidance allows employer-sponsored private foundations to assist victims in areas affected by the January 2010 earthquake in Haiti without affecting their tax-exempt status.

2.The Health Coverage Tax Credit and the COBRA Subsidy

Some people who are eligible for the COBRA subsidy, which has been extended through Feburary also qualify for the health coverage tax credit (HCTC) and may want to choose this more generous benefit, instead. The HCTC pays 80 percent of health insurance premiums for those who qualify. Eligible individuals must be receiving Trade Adjustment Assistance benefits or be over the age of 55 and receiving pension payments from the Pension Benefit Guaranty Corporation. Individuals must also be enrolled in a qualified health plan.

3. The IRS Reminds Tax-Exempt Organizations to File on Time to Preserve Their Tax Exempt Status

The Internal Revenue Service is reminding tax-exempt organizations to make sure they file their annual information form on time. In 2010 the tax-exempt status of any non-profit that has not filed the required form in the last three years will be revoked.

4. Paid Income Tax Return Preparer Strategy

This month IRS began taking action to step up oversight of tax preparers by sending out more than 10,000 letters to preparers who have filed large volumes of specific tax returns where the IRS typically sees frequent errors. The letters remind these tax return preparers of their obligation to prepare accurate tax returns.

Later this month IRS agents will visit thousands of the preparers who receive the letters.

Complete information is available on a new IRS.gov page, including Frequently Asked Questions about the upcoming visits.

5. 2010 Annual SB/SE Customer Base Survey to Begin

The IRS will begin conducting its annual telephone survey of small business and self-employed taxpayers starting January 18, 2010 and running through mid-April, 2010. This survey is for small business and self-employed taxpayers who file certain income tax forms, including: 1120, 1120S, 1065 and 1040 with schedules C, E or F.

Completing the survey is strictly voluntary, and all individual responses will remain anonymous to the IRS. The interviewers from PMR will not ask for any personal or financial information, including Social Security or Employer Identification Numbers, or banking, or credit card information.

6. Talking Tax Forms

The Internal Revenue Service has federal tax form formats which are available to individuals who are sight impaired. More than 700 talking federal income tax forms are available on its web site. The speech friendly forms are easy to use with Microsoft Active Accessibility compliant screen readers and Dragon Naturally Speaking Voice Recognition Software. Braille and large-print forms and publications are also available on-line.

7. Technical Guidance

Notice 2010-15 provides guidance in the form of questions and answers with respect to certain provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008 (“HEART Act”).

Revenue Ruling 2010-06 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by section 1274.

Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington DC 20535 · 800-439-1420