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President Trump on April 26th, just before his “100 days” in office, unveiled his highly-anticipated tax reform outline –the “2017 Tax Reform for Economic Growth and American Jobs.” The outline calls for dramatic tax cuts and simplification: lower individual tax rates under a three-bracket structure, doubling the standard deduction, and more than halving the corporate tax rate; along with changing the tax treatment of pass-through businesses, expanding child and dependent incentives, and more. Both the alternative minimum tax and the federal estate tax would be eliminated. The White House proposal does not include spending and tax incentives for infrastructure; nor a controversial “border tax.”


The Treasury Department is to undertake a review and re-evaluation of tax regulations issued by the IRS since January 1, 2016. President Trump signed an Executive Order 13789 (“Identifying and Reducing Tax Regulatory Burdens”) ordering this action on April 21. Following its review and re-evaluation, the Treasury Department will make recommendations.


The IRS processed more than 128 million returns and issued some 97 million refunds without hitting any major roadblocks by the end of the filing season. As in past years, the vast majority of returns were filed electronically. Likewise, most refunds were deposited electronically. Although the filing season has ended for most individuals, millions are on extensions.


Audit coverage rates are at low levels, the IRS has reported. According to the IRS, the audit coverage rate for individuals fell 16 percent from FY 2015 to FY 2016. The 0.7 percent audit coverage rate for individuals was the lowest coverage rate in more than a decade, the agency added.


Although the employee may end up with the same amount whether something is designated a tip or a service charge, the IRS reporting requirements for the employer do differ. Basically, any amount required to be paid by a customer rather than at the customer’s discretion is considered a service charge by the IRS.


As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of May 2017.


If you have completed your tax return and you owe more money that you can afford to pay in full, do not worry, you have many options. While it is in your best interest to pay off as much of your tax liability as you can, there are many payment options you can utilize to help pay off your outstanding debt to Uncle Sam. This article discusses a few of your payment options.

If you did not receive a full economic stimulus check in 2008 or your circumstances changed in such a way that you now qualify for the full payment, you may be entitled to receive a Recovery Rebate Credit (RRC). The RRC is a one-time tax credit allowed to be taken by qualifying individuals who received only a partial stimulus payment last year or no payment at all. The RRC is calculated in the same way as the 2008 economic stimulus payment except that your 2008 income tax information (as opposed to your 2007 tax information) is used to determine the amount of the RRC.

The American Recovery and Reinvestment Tax Act of 2009 (ARRTA) provides more than $75 billion worth of tax benefits for business for 2009 and 2010, in addition to numerous individual tax breaks. This article highlights some of the valuable tax breaks for businesses in the new law.

The American Recovery and Reinvestment Tax Act of 2009 (ARRTA) is loaded with various tax incentives for individuals for 2009 and 2010. Among the individual tax breaks in the new law are incentives for homeownership, help for the unemployed and employed, as well as education assistance and tax breaks for taxpayers with children. This article provides an overview of the major individual tax incentives provided by the ARRTA.

Even though gas prices have gone down from their record highs six-months ago, many people are looking for ways to save on their energy costs. The Tax Code provides a number of energy tax incentives to encourage individuals and businesses to invest in energy-efficient property and also in alternative sources of energy. One of those incentives is the Code Sec. 25C residential energy property tax credit for individuals.

The term "luxury auto" for federal tax purposes is somewhat of a misnomer. The IRS's definition of "luxury auto" is likely not the same as your definition.

If you are finally ready to part with those old gold coins, baseball cards, artwork, or jewelry your grandmother gave you, and want to sell the item, you may be wondering what the tax consequences will be on the disposition of the item (or items). This article explains some of the basic tax consequences of the sale of a collectible, such as that antique vase or gold coin collection.

With the economic downturn taking its toll on almost all facets of everyday living, from employment to personal and business expenditures, your business may be losing money as well. As a result, your business may have a net operating loss (NOL). Although no business wants to suffer losses, there are tax benefits to having an NOL for tax purposes. Moreover, the American Recovery and Reinvestment Act of 2009 temporarily enhances certain NOL carryback rules.

You have carefully considered the multitude of complex tax and financial factors, run the numbers, meet the eligibility requirements, and are ready to convert your traditional IRA to a Roth IRA. The question now remains, however, how do you convert your IRA?

It is a common decision you may make every tax season: whether to take the standard deduction or itemize deductions. Most taxpayers have the choice of itemizing deductions or taking the applicable standard deduction amount, the choice resting on which figure will result in a higher deduction. Once you have determined the standard deduction amount that applies to you, the next step is calculating the amount of your allowable itemized deductions; not always a simple task.

In a period of declining stock prices, tax benefits may not be foremost in your mind. Nevertheless, you may be able to salvage some benefits from the drop in values. Not only can you reduce your taxable income, but you may be able to move out of unfavorable investments and shift your portfolio to investments that you are more comfortable with.

The high cost of energy has nearly everyone looking for ways to conserve and save money, especially with colder weather coming to many parts of the country. One surprising place to find help is in the financial markets rescue package (the Emergency Economic Stabilization Act of 2008) recently passed by Congress. Overshadowed by the financial provisions are some very important energy tax incentives that could save you money at home and in your business.

Nonbusiness creditors may deduct bad debts when they become totally worthless (i.e. there is no chance of its repayment). The proper year for the deduction can generally be established by showing that an insolvent debtor has not timely serviced a debt and has either refused to pay any part of the debt in the future, gone through bankruptcy, or disappeared. Thus, if you have loaned money to a friend or family member that you are unable to collect, you may have a bad debt that is deductible on your personal income tax return.

With the U.S. and world financial markets in turmoil, many individual investors may be watching the value of their stock seesaw, or have seen it plummet in value. If the value of your shares are trading at very low prices, or have no value at all, you may be wondering if you can claim a worthless securities deduction for the stock on your 2008 tax return.

When you receive cash other than the like-kind property in a like-kind exchange, the cash is treated as "boot." Boot does not render the transaction ineligible for non-recognition treatment but it does require you to recognize gain to the extent of the cash received. The same is true for other non-like-kind property. In other words, anything you receive in addition to the like-kind property, such as relief from debt from a mortgage or additional property that is not like-kind will force you to recognize the gain realized.

The new Tax Increase Prevention and Reconciliation Act (TIPRA), signed into law in May, makes some important changes to offers-in-compromise (OIC). The new rules now require taxpayers to make nonrefundable partial payments with a submission of any OIC made on or after July 16, 2006. Taxpayers should be aware of the new requirements as the IRS is known for granting few OICs. Not complying with the new rules will likely increase the chances that the IRS will reject your offer.

Three years ago, Congress enhanced small business expensing to encourage businesses to purchase equipment and other assets and help lift the economy out of a slow-down. This valuable tax break was set to expire after 2007. Congress has now extended it two more years as part of the recently enacted Tax Increase Prevention and Reconciliation Act. Taxpayers who fully qualify for the expensing deduction get what amounts to a significant up-front reduction in the out-of-pocket cost of business equipment.

Starting in 2010, the $100,000 adjusted gross income cap for converting a traditional IRA into a Roth IRA is eliminated. All other rules continue to apply, which means that the amount converted to a Roth IRA still will be taxed as income at the individual's marginal tax rate. One exception for 2010 only: you will have a choice of recognizing the conversion income in 2010 or averaging it over 2011 and 2012.

No. Generally, payments that qualify as alimony are included in the recipient's gross income and are deducted from the payor's gross income. However, not all payments between spouses qualify as alimony.

Ordinarily, you can deduct the fair market value (FMV) of property contributed to charity. The FMV is the price in an arm's-length transaction between a willing buyer and seller. If the property's value is less than the price you paid for it, your deduction is limited to FMV. In some cases, you must submit an appraisal with your tax return.

Taxpayers who do not meet the requirements for the home sale exclusion may still qualify for a partial home sale exclusion if they are able to prove that the sale was a result of an unforeseen circumstance. Recent rulings indicate that the IRS is flexible in qualifying occurrences as unforeseen events and allowing a partial home sale exclusion.

The actual date a business asset is placed in service is important because it affects when depreciation may be claimed for tax purposes. Depreciation begins in the tax year that an asset is placed in service. The placed-in-service date is especially important in the case of end-of-tax year acquisitions.

More small businesses get into trouble with the IRS over payroll taxes than any other type of tax. Payroll taxes are a huge source of government revenue and the IRS takes them very seriously. It is actively looking for businesses that have fallen behind in their payroll taxes or aren't depositing them. When the IRS finds a noncompliant business, it hits hard with penalties.

No, parking tickets are not deductible. Internal Revenue Code Sec. 162 (a) provides that no deduction is allowed for fines or penalties paid to a government (U.S. or foreign, federal or local).

The AMT is difficult to apply and the exact computation is very complex. If you owed AMT last year and no unusual deduction or windfall had come your way that year, you're sufficiently at risk this year to apply a detailed set of computations to any AMT assessment. Ballpark estimates just won't work

You've waited until the last minute to fill out your income tax return. Instead of owing more taxes to the IRS, as you feared, you discover that you're entitled to a big refund. You breathe a sigh of relief.

Q. A promising investment opportunity proved too good to be true and I have incurred some stock losses. I still have faith in the company and don't want to abandon it but can I use some of these losses to offset gains from other stocks? If I sell these shares at a loss and immediately buy them back, what would the tax consequences be?

When trying to maximize retirement savings contributions, you may find you have contributed too much to your IRA. Typically, you either have too much income to qualify for a certain IRA or you can't recall what contributions you made until they are added up at tax time and you discover they were too much. There are steps you can take to correct an excess contribution.

Starting for tax year 2005, businesses have been able to take a new deduction based on income from manufacturing and certain services. Congress defined manufacturing broadly, so many businesses -just not those with brick and mortar manufacturing plants-- will be able to claim the deduction. The deduction is 3 percent of net income from domestic production for 2005 and 2006. This percentage rises to 6 percent and then 9 percent in subsequent years.

Small businesses are getting a break from filing quarterly employment tax returns. The IRS will permit some small employers to file their employment tax returns annually instead of quarterly. The IRS is sending out letters about the new program to small businesses in February. If you receive a letter from the IRS, give our office a call and we'll help answers any questions you have. If you don't receive a letter from the IRS and believe you qualify for the program, we'll get in touch with the IRS for you.

You can now obtain an automatic six-month extension to October 15 to file your income tax return, Form 1040 -- four months if you are out of the country. You no longer need to ask for an additional two-month extension and do not have to give a reason for your extension request. To obtain the automatic extension, you must submit your request by April 15 (the original due date of the return). Be aware that the IRS will not grant an extension beyond six months.

Information returns usually arrive in January or February and consist of either Form 1099 or Form 1098. For some, they seem as ubiquitous as their holiday mail in December. Form 1099s are especially likely to populate your mailbox, being used to report a whole array of income other than wages, salaries and tips. While a Form 1099 is not needed to record every taxable transaction, one Form 1099 can record multiple transactions; for example, from your broker for dividends and stock trades. The payer will send a Form 1099 to you by the end of January and will file the form with the IRS by the end of February. Typical forms are sent out for dividend and interest income, self-employment or independent contractor's income, student loan interest and mortgage interest statements.


Amounts received as an annuity are included in gross income to the extent that they exceed the exclusion ratio, which is determined by taking the original investment in the contract, deducting the value of any refund features, and dividing the result by the expected yield on the contract as of the annuity starting date. In general, the expected return is the product of a single payment and the anticipated number of payments to be received, i.e., the total amount the annuitant can expect to receive. In the case of a life annuity, the number of payments is computed based on actuarial tables provided in IRS Regulation Sec. 1.72-9.

Q: After what period is my federal tax return safe from audit? A: Generally, the time-frame within which the IRS can examine a federal tax return you have filed is three years. To be more specific, Code Sec. 6501 states that the IRS has three years from the later of the deadline for filing the return (usually April 15th for individuals) or the date you actually filed the return. This means that if you file your return on May 10, 2009, the IRS will have until May 10, 2012 to look at it and "assess a deficiency;" not April 17, 2012.

Holiday season - a time for giving to friends and family, but not, you hope, to the IRS. Many, if not most, people are aware that the Tax Code imposes a tax on certain gifts, but not everyone is certain as to how this works. How do you know when you've given the gift that keeps on taking - a taxable gift?

Given a choice between recognizing income now or in a later year, most people want to be paid now and be taxed in a later year. As a practical matter, however, an employee cannot defer compensation after performing services and becoming entitled to payment. Routine compensation earned over a prescribed pay period -- a week, two weeks, or a month, for example - usually is paid or made available in the same year it was earned. Recognition of the income cannot be put off to a later year.

You've just disposed of a collectible item (or your entire collection), such as an old coin, artwork, figurine, or even those old baseball cards you somehow managed to keep away from the spokes of your bike and your mother's desire to clear some space, and got a sum of money for your efforts. Congratulations, you've just had a taxable event. How do you calculate your gain (assuming you actually have one) so that you can pay the taxes? To do this, you need to answer a few more questions.

The tax rules are very liberal for individuals in the armed forces who are serving in a combat zone. The combat zone extension automatically extends the date for paying tax or claiming a refund, as well as for filing. The extension also applies to paying estimated tax.

Generally, mental disability must be permanent. However, you may be able to withdraw a portion up to the amount allowable as a medical expense deduction for the year.

It's back-to-school time and many families are looking for ways to stretch their education dollars. To help, there are some generous tax breaks. Deductions and credits are available and while they won't lower the cost of education, they can lower the tax bill.

The Tax Code encourages charitable donations by businesses and industries. In fact, it is one tax incentive that President Bush has told his tax reform panel that he wants to preserve and strengthen. Taxpayers can make many different types of contributions, including inventory.

One of the easiest ways for a business to limit liability is to use independent contractors instead of employees. Of course, merely calling employees "independent contractors" will not make those individuals independent contractors.

The closely-held corporate form of entity is widely used by family-owned businesses. As its name implies, the owners of the business are typically limited to a small group of shareholders. Many businesses operate for years as closely-held corporations without giving a second thought to a little-known danger: the personal holding company tax.

Many people are surprised to learn that some "luxury" items can be deductible business expenses. Of course, moderation is key. Excessive spending is sure to attract the IRS's attention. As some recent high-profile court cases have shown, the government isn't timid in its crackdown on business owners using company funds for personal travel and entertainment.

Whether a parent who employs his or her child in a family business must withhold FICA and pay FUTA taxes will depend on the age of the teenager, the amount of income the teenager earns and the type of business.

Owning a vacation home is a common dream that many people share...a special place to get away from the weekday routine, relax and maybe, after you retire, a new place to call home.

A remainder interest is the interest you receive in property when a grantor transfers property to a third person for a specified length of time with the provision that you receive full possessory rights at the end of that period. The remainder is "vested" if there are no other requirements you must satisfy in order to receive possession at the end of that period, such as surviving to the end of the term. This intervening period may be for a given number of years, or it may be for the life of the third person. Most often, this situation arises with real estate, although other types of property may be transferred in this fashion as well, such as income-producing property held in trust. The holder of a remainder interest may wish to sell that interest at some point, whether before or after the right to possession has inured.

For U.S. taxpayers, owning assets held in foreign countries may have a variety of benefits, from ease of use for frequent travelers or those employed abroad to diversification of an investment portfolio. There are, however, additional rules and requirements to follow in connection with the payment of taxes. Some of these rules are very different from those for similar types of domestic income, and more than a few are quite complex.

The federal government makes a lot of money from interest people owe on their taxes. Unless you are proactive, interest will accrue and before you know it, your original tax bill will be much higher. You can stop interest from accruing if you act early. Thanks to a new law, the government will also pay you interest in some cases.

If you pay for domestic-type services in your home, you may be considered a "domestic employer" for purposes of employment taxes. As a domestic employer, you in turn may be required to report, withhold, and pay employment taxes on a calendar-year basis. The reporting rules apply to both FICA and FUTA taxes, as well as to income taxes that domestic employees elect to have withheld from their wages. The FICA tax rate, applied separately to the employer's share and the employee's share, is 7.65 percent.

This is a simple question, but the question does not have a simple answer. Generally speaking the answer is no, closing costs are not deductible when refinancing. However, the answer depends on what you mean by "closing costs" and what is done with the money obtained in the refinancing.

With all the different tax breaks for taxpayers with children - from the Earned Income Tax Credit (EITC) to the dependent care and child tax credits - you may be wondering who exactly is a "child" for purposes of these incentives. Is there a uniform definition in the Tax Code, or does the definition of a "child" vary according to each tax break?

The American Jobs Creation Act of 2004 (2004 Jobs Act) changed the rules for start-up expenses in both favorable and unfavorable ways. Start-up expenditures are amounts that would have been deductible as trade or business expenses, had they not been paid or incurred before the business began. Prior to the 2004 Jobs Act, a taxpayer had to file an election to amortize start-up expenditures over a period of not less than 60 months, no later than the due date for the tax year in which the trade or business begins.

No, taxpayers may destroy the original hardcopy of books and records and the original computerized records detailing the expenses of a business if they use an electronic storage system.

The Electronic Federal Tax Payment System (EFTPS) allows individuals and businesses to make tax payments by telephone, personal computer or through the Internet.


Q: What tax deductions am I entitled to as an investor?

A: Certain investment-related expenses are deductible, others are specifically restricted. Still others won't get you a deduction, but you will be able to add them to your tax basis in the underlying investment, or net them from the amount you are otherwise considered to have received on its sale.


New IRS rules substantially simplify the computation of required minimum distributions (RMDs). In addition, Congress has forced the IRS to adopt new life expectancy tables that reflect longer life expectancies, resulting in distributions to be made over a longer time-period and for the RMD to be smaller than would have been required in previous years. You could realize some significant tax savings.

Q: An extension to file my tax return seems such a painless procedure, is there any good reason for me not to postpone my filing deadline to avoid just one more hassle during the busy start of Spring?


It's always nice to have extra cash lying around in your business. Say you've had a good year, but you want to wait awhile before plowing the profits back into the business. Are there any potential tax problems involved if you keep that extra cash in your business' investment account rather than withdrawing it to put in your own personal portfolio? You bet there are ... if you operate your business as a regular taxable corporation.


Q. My husband and I have a housekeeper come in to clean once a week; and someone watches our children for about 10 hours over the course of each week to free up our time for chores. Are there any tax problems here that we are missing?


In 2009, individuals saving for retirement can take advantage of increased contribution limits for various retirement plans. More money can be socked away with tax advantages like tax-deferred growth and possible tax-deductibility.