Thomson Reuters has released an updated special report on the tax changes in the Affordable Care Act, which have become more relevant now that the health insurance exchanges have opened for business in many states, despite the technical glitches on the federal site.

The special report, Tax Changes in Health Care Reform Legislation, is designed to help tax practitioners understand the tax provisions of health care reform that are taking effect.

“2014 will be a critical year for practitioners advising their business and individual clients on the impact of health care reform,” said Thomas Long, a senior tax analyst at Thomson Reuters who authored the report. “Thousands of pages of complex regulations have already been published; and more regulations are on the way to fully implement the law.”

The report, which is available for download at no cost, covers topics such as the increase in the employee’s share of FICA contributions for income over $250,000, the surtax on unearned income of higher-income individuals and the higher threshold for deducting medical expenses. The report also covers the dollar cap on contributions to health flexible spending accounts, information reporting on health coverage by insurers and employers, the individual penalty for not carrying health insurance, and the penalty for larger employers who don’t offer affordable, minimum-value health insurance coverage. Also in the report is information on the refundable tax credit for low- and moderate-income families who buy health insurance, and the excise taxes on health insurance providers, medical device manufacturers and high-end employer-provided health insurance plans.

Besides the special report, Thomson Reuters offers additional guidance on the health care reform law, including the ACA Decision Support Tool, PPC’s Guide to Health Care Reform, and EBIA Health Care Reform for Employers and Advisors. The company also offers online training in Understanding Health Care Reform – How the New Laws Impact Employers and Individual Taxpayers, Affordable Care Act: Understanding the New Medicare Taxes, and Net Investment Income Tax. A complete list of resources is available in the special report.

The Internal Revenue Service announced on Tuesday that it will delay the start of the 2014 tax filing season by as much as two weeks due to delays caused by the recent closure of the federal government.

Citing the need for “adequate time to program and test tax processing systems,” the service announced that it expected a one- to two-week delay in the start of tax season, and that it would start accepting and processing 2013 individual tax returns no earlier than Jan. 28, 2014, and no later than February 4. Tax season had been expected to start on January 21.

Acting Commissioner Danny Werfel said in the statement that the service was exploring options to shorten the expected delay, but also noted, “Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right. The adjustment to the start of the filing season provides us the necessary time to program, test and validate our systems so that we can provide a smooth filing and refund process for the nation’s taxpayers.”

The 16-day government shutdown came during the peak period for preparing IRS systems for the upcoming tax season, which involves programming, testing and deployment of more than 50 systems.

About 90 percent of IRS operations were closed during the shutdown, with some major workstreams closed entirely, and the IRS noted that it is also facing extra demands due to the need for systems to prevent refund fraud and ID theft — and that it is still dealing with a backlog of over 1.4 million pieces of correspondence that piled up during the shutdown.

The official start date will be announced in December.

The Internal Revenue Service said Friday that farmers and ranchers who previously were forced to sell livestock due to drought conditions currently affecting much of the nation will now have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales.

Details on the relief, which affects 38 states, are available in Notice 2013-62, posted Friday on IRS.gov. Details on reporting drought sales and other farm-related tax issues can be found in Publication 225, Farmer’s Tax Guide, also available online.

The IRS noted that farmers and ranchers who, due to drought, sell more livestock than they normally would are able to defer tax on the extra gains from those sales. To qualify, the livestock generally must be replaced within a four-year period. The IRS is authorized to extend this period if the drought continues.

The one-year extension of the replacement period announced by the IRS on Friday generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes due to drought. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, and poultry are not eligible.

The IRS said it is providing this relief to any farm located in a county, parish, city, borough, census area or district, listed as suffering exceptional, extreme or severe drought conditions by theNationalDroughtMitigationCenter, during any weekly period between Sept. 1, 2012, and Aug. 31, 2013. All or part of the 38 states is listed. Any county contiguous to a county listed by the NDMC also qualifies for this relief.

As a result, farmers and ranchers in these areas whose drought sale replacement period was scheduled to expire at the end of this tax year, Dec. 31, 2013, in most cases, will now have until the end of their next tax year. Because the normal drought sale replacement period is four years, this extension immediately impacts drought sales that occurred during 2009. But because of previous drought-related extensions affecting some of these localities, the replacement periods for some drought sales before 2009 are also affected. Additional extensions will be granted if severe drought conditions persist.

 Late this past Wednesday, Congress voted to reopen the government through January 15 of next year.

Despite the shutdown, the statutory deadline of 90 days for filing a petition in the Tax Court cannot be extended.  Yet during the shutdown, the Tax Court was not accepting hand delivery and very likely was not opening its mail.

Under these circumstances, the mailbox rule may provide the only means for a taxpayer to satisfy the physical delivery requirement for timely filing petitions, according to Robin Greenhouse, a partner at McDermott Will & Emery.

“Without a timely filed petition, the Tax Court lacks jurisdiction over the taxpayer’s case and the taxpayer loses the Tax Court as a forum in which to litigate,” she said. “The remaining litigation forums require the taxpayer to pay the disputed tax, penalties and interest and sue for a refund.”

Since some taxpayers have already been faced with the issue, and the fact that history may repeat itself after January 15, it is time for a look at the rules.

The statutory postmark rule, enacted as Section 7502 of the Tax Code, allows the physical delivery requirement to be satisfied by the date of theUnited Statespostmark stamped on the cover in which the document is mailed. But if the mailed document is lost or the postmarked envelope is not retained, then Section 7502 provides that proof of registered mail or certified mail constitutes evidence that the document was received, according to Greenhouse.

“The date of registration or the postmark on the certified receipt constitutes the postmark date and also the delivery date,” she said.

The common law rule allows extrinsic evidence, such as testimony, but relying on this can be risky, Greenhouse indicated.

The federal appeals courts are currently split as to whether extrinsic evidence, such as testimony, may be presented to establish proof of a timely mailing. “The U.S. Courts of Appeal for the Eighth, Ninth and Tenth Circuits have adopted rules that allow the taxpayer to introduce extrinsic evidence that it in fact timely mailed the petition,” she said. “The Second and Sixth Circuits have held that if the taxpayer cannot show an actual postmark, the court cannot accept testimony or other evidence as proof of actual date of mailing,” Greenhouse said.

“In 2011 the IRS issued final regulations that provide that only the receipt from certified or registered mail or a private delivery service will satisfy proof of delivery,” she said. “The regs were meant to dispense with the common law rule, but they haven’t been specifically addressed by the Tax Court.”

“The Tax Court will apply the rule of the court of appeals to which the case is appealable, so it is particularly important for taxpayers and practitioners to understand the rule in their circuit,” Greenhouse added. “But the best way to avoid the circuit split evidentiary issues is to retain the receipt for certified or registered mail, or from an approved private delivery service.”

Each year, millions of taxpayers receive letters and notices from the Internal Revenue Service for a variety of reasons. Listed below are several things to know about IRS notices, in case one shows up in your mailbox.

1. Don’t panic. Most letters can be handled simply and painlessly.

2. There are a number of reasons why taxpayers receive notices from the IRS. Notices may request payment of taxes, notify taxpayers of changes in their account, or request additional information. Generally, a notice will cover a very specific issue and tax year about a taxpayer’s account or tax return.

3.  Each letter and notice will provide specific instructions to the taxpayer, such as pay an amount by a certain deadline or send additional information.

4.  If a correction notice is received, taxpayers should compare it with the information on the related tax return. McAtee and Associates can help explain any differences.

5.  If a taxpayer agrees with the correction, then usually no reply is necessary unless a payment is due or the notice directs otherwise.

6.  If the taxpayer does not agree with the correction the IRS made, it is important that a response is made as requested by the notice. The tax professionals at McAtee and Associates can help prepare a written explanation as to why the taxpayer disagrees and include any information and documents necessary for the IRS to consider. It generally takes the IRS about 30 days to respond.

7.  It is important that taxpayers keep copies of all notices and return correspondence to the IRS with their tax records.

As tax professionals, McAtee & Associates can help both individual and business taxpayers with all their tax matters. Contact us for assistance in all of your financial and tax matters.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

In recent years, electronic filing and payment options have increased the timeliness and accuracy of tax returns and reduced the burden on taxpayers.  However, the law provides that the IRS  can assess a penalty on taxpayers who fail to file on time,  fail to pay on time or both.  Below are some important points about the two different penalties.

1.  If a tax return is not filed by the due date ( or extended due date) a failure to file penalty will be assessed.  If the amount due is not paid by the due date, a failure to pay penalty will be assessed.

2.  The failure to file penalty is generally more than the failure to pay penalty.  So,  if a taxpayer cannot pay all the tax owed, a return should still be filled along with any partial payment.  A taxpayer can then consider other payment options.

3.  The penalty for filing late is usually five percent of the unpaid balance for each month or part month the return is late.  The penalty will not exceed 25 percent of the unpaid tax balance.

4.  If a return is filed more than 60 days after the due date or extended due date, the minimum penalty is the lessor of $135 or 100 percent of the unpaid tax.

5.  If payment is not made by the due date, a failure to pay penalty will be assessed.  This penalty is on e half of one percent of the unpaid balance per month or part month after the due  date.  The penalty will not exceed 25 percent of the unpaid balance.

6. If an extension is filed by the original tax deadline, and at least 90 percent of the actual tax liability is paid by the original due date, a failure to pay penalty will not be assessed if the remaining balance is paid by the extended due date.

7.  If both the failure to file and failure to pay penalty apply in any month, the five percent failure to file penalty is reduced by the failure to pay penalty.  However, i9f a tax return is filed more than 60 days after the due date or extended due date, the minimum penalty is the lessor of $135 or 100 percent of the unpaid tax.

8.  Either penalty may be reduced or eliminated if a taxpayer can show that the failure to file or pay on time was due to a reasonable cause and willful neglect.

If you have not filed your tax return yet, don’t delay.  Contact us so your returns can be timely filed.  As tax professionals, McAtee & Associates can help both individual and business taxpayers with all their tax matters.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From the office of Carol McAtee & Associates, C.P. A. inSt. Petersburg,FL-The following is an update of the Gov’t Shutdown:

IRS Halts Tax Liens and Levies during Shutdown

WASHINGTON,D.C.(OCTOBER 10, 2013)

The Internal Revenue Service is putting the brakes on tax liens and levies during the federal government shutdown.

The IRS said in a Web page about the shutdown that it is not sending out levies or liens, either those generated systemically or those manually generated by employees. In a previous Web posting last week, the IRS had suggested that it would continue to send out automated notices of various kinds (see IRS Suspends Tax Refunds and Tax Court Closes during Government Shutdown).

In an effort to clarify the previous information, the IRS noted that taxpayers might still receive levy or lien correspondence with October mailing dates, but those notices were printed before IRS shut down operations were fully complete. The IRS explained that it is standard practice for such notices to be printed with a future date to allow for mailing time to reach taxpayers.

In addition, the IRS pointed out that other letters related to liens and levies—such as notifications that a taxpayer could potentially be subject to a lien or a levy at a future date—continue to be automatically generated by IRS systems during the appropriations lapse. “However, the IRS emphasizes that these notices are not actual levies or liens; just a notification of potential future action,” said the IRS. For more information on the IRS collection process, see Publication 594.

The IRS also clarified whether its personnel are continuing to take enforcement actions during this period.

“In non-criminal cases, the only enforcement actions the IRS is taking during the appropriations lapse involve isolated instances where we need to take immediate action to protect the government’s interest,” said the IRS. “So any enforcement action in this category—such as seizures—would be extremely limited. For example, where the expiration of the statute of limitations on collection action is imminent. For criminal issues, most IRS Criminal Investigation employees continue to work during this period, similar to other federal law-enforcement agencies.”

Tax Return Processing
The IRS also clarified its procedures for tax return processing. Last week, it noted that individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. It urged taxpayers to file electronically because most e-filed returns will be processed automatically. Payments accompanying electronic tax returns will be accepted as the IRS receives them, although the IRS said it would be unable to issue refunds during the shutdown.

The processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them, though the IRS will be unable to issue refunds during this time. Paper tax returns will be considered to be timely filed even though the IRS is not processing paper returns, the IRS clarified. Since the U.S. Postal Service is continuing to operate during the shutdown, and they will postmark and deliver mail to the IRS. “Any return postmarked by the due date will be considered timely filed by the IRS even though processing of the return may not occur until after the return due date depending on the length of the lapse in appropriations,” said the IRS.

Tax Transcripts
The IRS also noted that individual taxpayers are able to obtain tax transcripts during the shutdown. “This is an automated process,” said the IRS. “Taxpayers can still use automated tools, including IRS.gov, to request that a transcript of their personal tax records be sent to their address of record; the taxpayer will typically receive transcripts in the mail within five to 10 calendar days.”

However, a third party cannot obtain a tax transcript during the shutdown. The IRS explained that transcript requests from third parties require actions by IRS employees, who are not available due to the current lapse in government appropriations. “During this period, transcript requests by third parties, such as financial institutions, cannot be processed through the Return and Income Verification Services and Income Verification Express Service,” said the IRS. “These processes are not automated. However, individuals requesting their own transcripts can use the automated process, which remains available.” The IRS did not specify whether the transcripts are available to tax practitioners.

   The Internal Revenue Service has temporarily stopped sending out tax refunds, and the Tax Court has suspended operations during the federal government shutdown, as lawmakers in Congress continue their battle over delaying or defunding “Obamacare” for a year.

The IRS announced contingency plans for the government shutdown on Monday ahead of the looming shutdown (see IRS Releases Gov’t Shutdown Contingency Plan). On Tuesday, with the House and Senate failing to reach an agreement on a budget resolution to continue funding government operations—and with the impasse continuing over the insistence by Republican lawmakers that the health care reform law should be delayed as a necessary pre-condition for agreeing to a budget deal—the IRS elaborated on the shutdown plans on its Web site, including a temporary stoppage in tax refunds.

“Tax refunds will not be issued until normal government operations resume,” said the IRS. The IRS emphasized, however, that the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

“Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law,” said the IRS. “The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. Taxpayers are urged to file electronically, because most of these returns will be processed automatically.”

In addition, the IRS noted that no live telephone customer service assistance will be available. However, most automated toll-free telephone applications will remain in operation. IRS walk-in taxpayer assistance centers will be closed, though.

While federal government offices are closed, people who have appointments with the IRS related to examinations and audits, as well as tax collection, appeals or Taxpayer Advocate cases should assume their meetings are canceled, the IRS noted. IRS personnel will reschedule the meetings at a later date once the government shutdown ends.

In addition, IRS computer systems will continue to mail out automated notices to taxpayers, but IRS employees will not be sending any paper correspondence during the period when the federal government is shut down. The IRS provided some basic steps to follow during this period:

• Continue to file and pay taxes as normal. Individuals who have requested an extension of time to file should file their returns by Oct. 15, 2013.

• All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.

• Taxpayers can file their tax returns electronically or on paper—although the processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.

• Tax refunds will not be issued until normal government operations resume.

• Tax software companies, tax practitioners and Free File will remain available to assist with taxes.

A number of IRS services will remain available, but in a limited way. For taxpayers and preparers seeking assistance, only the automated applications on the regular (800) 829-1040 telephone line will remain open.

The IRS Web site, www.IRS.gov, will remain available, but some interactive features may not be available. IRS Free File partners—tax software vendors who partner with the IRS to provide free tax prep and processing for taxpayers with incomes up to a certain threshold—will continue to accept and file tax returns. Tax software companies in general will also continue to accept and file tax returns, the IRS noted.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee & Associates, CPA office in St. Petersburg, FL-   Keep copies of all filed tax returns as a part of your tax records.  They can help in the preparation of future tax returns and will be needed if an amended return is to be filed.

All tax filers MUST keep records to support items reported on their income tax return.  Keep basic records that relate to the preparation of the federal tax return for at least three years.  Basic records are documents that prove income and expenses.  This includes income information such as Forms W-2 and 1099.  It also includes information that supports tax credits or deductions claimed.  This might include sales slips, credit card receipts and other proofs of payment, invoices, cancelled checks, bank statements and mileage logs.

If you own a home or investment property, keep records of the purchases and other related records. Typically, the records should be kept; including home improvements, at least three years AFTER the property has been sold.

If you own a business, keep records that show total receipts, proof of purchases,  business expenses and assets.  These may include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices.  Also include credit card receipts, sales slips, cancelled checks, account statements and petty cash slips.  Electronic records can include databases, saved files, emails, instant messages, faxes and voice messages.

If you own a business with employees, keep all employment-related tax records for at least four years after the tax is due, or after tax is paid, whichever is later.

The IRS doesn’t require any special method to keep records, but it’s a good idea to keep them organized and in one place.  This will make it easier to prepare and file a complete and accurate return.  The documentation will also be readily available if there are questions about the tax return after it has been filed.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From our CPA office in St. Petersburg, FL- The Internal Revenue Service has released guidance on issuing tax refunds to same-sex married couples in the wake of the Supreme Court’s decision striking down the Defense of Marriage Act.

The Treasury Department and the Internal Revenue Service have ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.

The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.  The ruling implements the federal tax aspects of the June 26^th Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act and had been long-awaited by tax professionals who wanted more clarity from the IRS.

For More information please click on links provided below:

Notice 2013-61 provides guidance to employers and employees to make claims for refund or adjustments of overpayments of Federal Insurance Contributions Act, or FICA, taxes and federal income tax withholding employment taxes resulting from the Supreme Court’s decision in United States v. Windsor, and the holdings of IRS Revenue Ruling 2013-17 and Internal Revenue Bulletin 2013-38 (see Treasury and IRS Recognize Same-Sex Marriages for Tax Purposes).

WASHINGTON,D.C.(AUGUST 29, 2013)

BY MICHAEL COHN (From Accounting Today)

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.