Some Tax Exempt Organizations Given Extra Time By IRS

According to a posting on the IRS website, the IRS postponed the filing date until February 1, 2013 for some small tax exempt organizations, allowing the organizations to possibly take advantage of transitional relief after Hurricane Sandy as they seek to reverse the revocation of their tax exempt status. The press release states that this is in an effort to “bring all available resources to bear to support state and local partners impacted by Hurricane Sandy.”

Organizations that did not a required information return or electronic notice for taxable years 2007, 2008, and 2009 automatically lose their tax-exempt status. In order to be reinstated, they must apply.

In order to be deemed eligible for the extension, either the primary location of the organization or the required documents to meet the qualifications must be located within the designated disaster zone.

If an organization that meets the IRS eligibility requirements files before February 1, 2013, it will be treated as though it filed on December 31, 2012, the original due date. Organizations that are applying for transitional relief that are not located within  designated disaster area must file by December 31, 2012. If an organization is beyond the area but thinks it qualifies for the relief, the only way to be considered is to contact the IRS directly.

All applications and phone numbers are available on the IRS website at irs.gov.

 

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Beverly Hills, CA 90212
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IRS Releases Information on New Tax under Healthcare Law

According to a Reuters article, the IRS released new rules today that addressed a portion of the healthcare law that has already been met with controversy. Under the bill, a tax would be placed on such medical devices like medical sutures and knee replacement implants.

The 2.3-percent tax will go into effect after December 31. The tax, which will be on gross sales of the companies that make the devices, is anticipated to generate $29 billion in revenue for the Federal government in the next 10 years.

The rules were released, though the fate of the tax remains unclear. While a repeal bill was passed in June in the House of Representatives (controlled by the Republicans), it has not yet come to a vote in the Senate, now controlled by Democrats. Large companies that produce the devices, such as Boston Scientific Corp and 3M Co are pushing for the repeal.

In regards to what is exempt from the tax, the IRS stated eyeglasses, contacts, hearing aids, and prosthetics are on the exemption list. On the other hand, medical devices that are implanted by medical professionals are the devices to which the tax will apply if the repeal bill does not pass in the Senate. Those who hope that devices being used for humanitarian purposes will be exempt are out of luck, as they fall under the category of taxable under the law.

Many in the medical device business hope that the tax will be delayed as a resolution to the “fiscal cliff” is reached.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

A Tax Attorneys Perspective on Challenges the New IRS Commissioner Will Face

In a recent article in Forbes, a tax attorney of many years, Stephen J. Dunn, discussed several challenges that the new IRS Commissioner will face in the coming term. The list, which he states is from a practioner’s perspective, gives insight into the difficulties both tax attorney and taxpayer face when dealing with the U.S. Tax System.

The first issue on Mr. Dunn’s list was a functioning online transcript delivery system. As a tax attorney, Mr. Dunn is acutely aware of the impact the transcript system has on a tax law practice, even going so far as to declare it the core of a tax practice.

The next challenge the new commissioner will face is coming up with ways to stop the scam artists that prey upon unsuspecting taxpayers, particularly those that offer quick and easy tax resolution services. Operators of these seedy services, with no actual tax resolution knowledge or credentials, target those with federal tax liens. Once the scam artists have obtained a large retainer—often $5,000-$10,000—and fled, the taxpayer will be left with an even greater debt and an increasingly expensive tax issue.

As Mr. Dunn stated in the last challenge listed, the new IRS commissioner will have to find new ways to “protect the public fisc.” The U.S. Treasury has paid out tens of millions of dollars to undeserving taxpayers involved in tax schemes. The scheme that has been circulating the country in recent years involves filing fraudulent Forms 1099-OID. Promoters involved in this scheme sell the scheme to taxpayers, preparing fraudulent 1099-OID.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999