April 2011 Newsletter
John Rodgers, President
The society annual meeting is scheduled for May 12-13th at Alyeska Resort. Take advantage of the early registration (before May 1st) and SAVE! Another deadline to consider is early registration for CPE and Season Pass sign up! The CPE committee has put together a great selection of classes this year. Register online at www.akcpa.org.
Season Pass Deadline Extended to May 16th.
The Season Pass offered for $1,300 gives you up to six (6) eight hour seminars for a total of 48 continuing professional education hours. Joint members of both the AKCPA and the AICPA are entitled to a discount of $100 on the price of the Season Pass. Register online at www.akcpa.org.
2011 is a licensing renewal year and you will need to complete 4 hours of Alaska specific ethics for relicensure by December 31, 2011. In case you missed it in last months newsletter, the Alaska Ethics course will be offered twice in Anchorage this year and once in Fairbanks. The first date is May 12th at Alyeska Resort in conjunction with the Annual Meeting of the Society. The next offerings will be July 26th in Fairbanks and July 28th in Anchorage. Larry Stein has developed the course with input from the Alaska State Board of Accountancy to meet the 4 hour Alaska specific ethics requirement.
Don't wait until the last minute to get it on your calendar! Register on line at www.akcpa.org.
It’s not too late to sign up for an AKCPA Committee. Share your skills and talents. Grow your experience and develop relationships that last a life time. For more information about specific committees or task force activities please contact the Society at akcpa@ak.net or you can download an application from the website at www.akcpa.org under the ABOUT Tab (Committees).
Dues renewal notices will be emailed out this week. You can renew on line and update your profile. Your prompt payment is appreciated. If you have any problems with login please contact the society office at akcpa@ak.net.
IRS Updates and News Releases
Announcing a Change of Mailing Address for FOIA Requests
The Internal Revenue Service has almost completed modernizing Freedom of Information Act (FOIA) and Privacy Act case processing with the implementation of AFOIA, Automated Freedom of Information Act.
Due to the volume of correspondence and payments we receive, we changed the FOIA mailing address. Effective April 1, 2011, please send all FOIA correspondence and payments to:
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Internal Revenue Service
Disclosure Scanning Operation – Stop 93A
Post Office Box 621506
Atlanta, GA 30362-3006
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Substantiating Documents Required to Claim Adoption Credit
Starting with 2010 tax returns, taxpayers must submit documentation with their tax return to claim the adoption credit. Copies of adoption-related documents must be attached to the tax return and mailed to the IRS for processing. A recent IRS Tax Tip describes Seven Facts about the Expanded Adoption Credit.
2011 Form 941 Now Available Online
The 2011 Form 941, Employer’s Quarterly Federal Tax Return and instructions are now available on IRS.gov. Form 941 contains a new, line 5e Section 3121(q) Notice and Demand – Tax due on unreported tips.
This line will be used if the employer receives notice and demand from the IRS regarding unreported tips as described in Headliner 298. This headliner is titled New IRS Program Uses Data from Employees' Forms 4137 to Determine the Social Security and Medicare Taxes Owed by the Employers of Tipped Employees.
PTIN Update and Reminder
Over 690,000 federal tax return preparers have registered with the IRS and obtained a Preparer Tax Identification Number (PTIN) since September 2010. Have you? Starting on Jan. 1, 2011, all paid preparers must have a new PTIN before preparing returns. Register for an upcoming Webinar (IRS Live Presents Requirements for Federal Tax Return Preparers) on March 30. For more see the PTIN registration page on IRS.gov.
Revised Collection Notices
The newest release of redesigned taxpayer notices includes 12 tax collection notices featuring the Service’s new design and plain language standards. The redesigned tax delinquent account (TDA) notices present a clear, clean line and use best practices to aid in comprehension and readability. Redesigned TDA notices include CPs 501, 503, 504, 504B, 521, 523, 601, 603, 604, 604B, 621 and 623. More information about notices and view samples of these and other notices is available on line.
IRS Announces New Effort to Help Struggling Taxpayers Get a Fresh Start
In its latest effort to help struggling taxpayers, the IRS announced a series of new steps to help people get a fresh start with their tax liabilities. The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. See IR-2011-20 for more.
Introducing the IRS Calendar Connector for Small Businesses
The IRS has a new online tool to make it easier to remember important tax and deposit deadlines. Download the free IRS Calendar Connector and keep it on your computer desktop to check important tax dates on a daily, weekly or monthly basis.
Business Tax Forms Update
There is new information available about filing Business Forms Affected By the Extender Provisions is available on the IRS.gov.
Retirement News for Small Businesses
The 2011 winter edition of Retirement News for Employers has information on pre-approved retirement plans, fixing common plan mistakes and more.
Ten Facts for Mortgage Debt Forgiveness
If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.
- Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
- The limit is $1 million for a married person filing a separate return.
- You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
- To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
- Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
- Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
- If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
- Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.
- If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
- Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. Taxpayers may obtain a copy of this publication and Form 982 either by downloading them from IRS.gov or by calling 800-TAX-FORM (800-829-3676).
IRS Issues Information on 2011 Offshore Voluntary Disclosure Initiative in Eight Foreign Languages
The IRS today announced that it has made available information in eight foreign languages about the 2011 Offshore Voluntary Disclosure Initiative (OVDI) for those taxpayers with undisclosed offshore accounts. The agency took this step to reach taxpayers whose primary language may not be English. The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative to get current on their tax returns. The 2011 OVDI will be available only through Aug. 31, 2011. The news release, announcing the agency’s terms for its offshore voluntary disclosure initiative was translated into Chinese ( Traditional and Simplified), Farsi, German, Hindi, Korean, Russian, Spanish and Vietnamese.
The agency has taken this step to get information about the initiative to people that need it in response to requests made by taxpayers and tax professionals. A similar effort took place in 2009, when the IRS translated material on its special provisions for undisclosed offshore accounts into several languages. The 2011 initiative has a higher penalty rate than the previous voluntary disclosure program, which ended on Oct. 15, 2009, but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection and possible criminal prosecution.
Taxpayers participating in the new initiative must file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties by the Aug. 31 deadline. The IRS recently launched a new section on www.IRS.gov that includes the full terms and conditions on the 2011 Offshore Voluntary Disclosure Initiative, including an extensive set of questions and answers to help taxpayers and tax professionals. The web site also includes details on how people can make a voluntary disclosure.
IRS Releases 2010 Data Book
The Internal Revenue Service today announced the release of the 2010 IRS Data Bood an annual snapshot of agency activities for the fiscal year.
The report describes activities conducted by the IRS from Oct. 1, 2009, to Sept. 30, 2010, and includes information about returns filed, tax collections, enforcement and taxpayer assistance, as well as the IRS budget and workforce.
IRS Updates the Allowable Living Expense Standards for 2011
The Internal Revenue Service released the 2011 update to the Allowable Living Expense Standards on March 1. The ALE standards are used to reduce subjectivity in determining what a taxpayer may claim as basic living expenses necessary to avoid undue hardship when the taxpayer must delay full payment of a delinquent tax. The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas.
EA Renewal Period Delay Continues
The renewal period under Circular 230 Section 10.6(d) for those Enrolled Agents with SSN ending 4, 5, and 6 continues to be delayed. The regulations relating to the new user fee have not been finalized.
The new renewal application (Form 8554) is not yet available and as a result, you will not be able to renew your enrollment at this time. Your enrollment will remain in active status until the 2011-2014 renewal process has been completed. Once the final regulations have been approved, and the application has been released, you will be provided ample time to renew. Please continue to check the Latest News from the Office of Professional Responsibility for on IRS.gov for updates. We regret any inconvenience.
Technical Guidance
Revenue Procedure 2011-21 provides the depreciation deduction limitations for owners of passenger automobiles (including trucks and vans) first placed in service during calendar year 2011 and the amount to be included in income by lessees of passenger automobiles first leased during calendar year 2011. These depreciation deduction limitations and income inclusion amounts are updated annually pursuant to section 280F to reflect the automobile price inflation adjustments. Rev. Proc. 2011-21 also modifies Rev. Proc. 2010-18, to increase the depreciation limitations and lessee inclusion amounts for passenger automobiles first placed in service or leased in 2010 by taxpayers claiming the section 168(k) additional first year depreciation deduction pursuant to the Small Business Jobs Act of 2010.
Notice 2011-22 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.
Notice 2011-14 providing guidance on the federal tax consequences of payments made to or on behalf of financially distressed homeowners under programs established pursuant to the Treasury Department’s Housing Finance Agency Innovative Fund for the Hardest-Hit Housing Markets and the Department of Housing and Urban Development’s Emergency Homeowners’ Loan Program. This notice also provides guidance on the information reporting requirements for these payments.
Revenue Procedure 2011-20 provides information to any individual who failed to meet the eligibility requirements of section 911(d)(1) of the Internal Revenue Code because adverse conditions in a foreign country precluded the individual from meeting those requirements for taxable year 2010. This revenue procedure lists the countries for which the eligibility requirements of section 911(d)(1) are waived for taxable year 2010.
Internal and External Exposure Drafts
FASB
Issue date -- 1/31/11 Supplementary Document, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities: Impairment
Comment deadline -- 4/1/11
Issue date -- 1/28/11 Proposed Accounting Standards Update, Balance Sheet (Topic 210): Offsetting
Comment deadline -- 4/28/11
Other (AICPA)
Issue date -- 1/31/11 Proposed Revisions to the AICPA Standards for Performing and Reporting on Peer Reviews—Performing and Reporting on Peer Reviews of Compilations Performed Under SSARS 19
Comment deadline -- 4/29/11
IFAC
Issue date -- 1/13/11 Proposed International Standard on Review Engagements, ISRE 2400 (Revised), Engagements to Review Historical Financial Statements
Comment deadline -- 5/20/11
Issue date -- 1/11/11 Proposed International Standard on Assurance Engagements, ISAE 3410, Assurance Engagements on Greenhouse Gas Statements
Comment deadline -- 6/10/11
