New Form 1099 draft instructions include FATCA update

New Form 1099 draft instructions include FATCA update
The IRS recently released draft instructions for several 1099 forms, which include a change related to the Foreign Account Tax Compliance Act (FATCA). The update was made for Form 1099-MISC, Miscellaneous Income; Form 1099-DIV, Dividends and Distributions; Form 1099-OID, Original Issue Discount; and Form 1099-INT, Interest Income.

The change is the addition of a checkbox for foreign financial institutions (FFIs). It refers to the FFIs chapter 4 filing requirements.

"Beginning in 2014, an FFI with a chapter 4 requirement to report a US account maintained by the FFI that is held by a specified US person may satisfy this requirement by reporting on Form(s)1099 under the election described in Regulations section 1.1471-4(d)(5)(i)(A)," the instructions read.

The instructions went on to say US payors can fulfill their chapter 4 obligations using the check box.

Bibliography: convey.com, irs.gov

Tax Penalty Abatement Letter Request & Form 843

Tax Penalty Abatement Letter Request & Form 843
Below is a sample penalty abatement letter request to the IRS. It is intended to be used as a guide and is for information purposes only when trying to abate tax penalties.

Date:  September 20, 20xx

To:  IRS (Penalty Abatement)
(address given on notice of tax amount due)

From:  Jane Doe
123 Any Street
Any City, State 99999
SSN: (***-**-****)

Re: Request for Penalty Abatement

Dear Sir:

I am writing to request an abatement of penalty in the amount of $(amount) as assessed in the attached notice that is dated ____/____/____.

The reason why I _________(pick one)

• Paid late 
• Filed late 
• Failed to report income 

was because I ____________ (pick one) 

• Had a serious medical condition 
• House burned down 
• Documents were stolen 
• Death of a close family member 
• ...or any other reason that prevented you from complying with the IRS requirements 

Please find the enclosed (documents that support my claim) 

• Death notice of a family member 
• Letter from a doctor stating the conditions of your illness that prevented you from filing or paying 
• Picture of house burned down in fire 
• Insurance notice of theft of private property and documents 
• ...or any proof you can enclose (a copy of) to prove statement above 

Please consider my request for abatement of penalty based upon reasonable cause. If there are any questions or further information required, I can be reached at (telephone number) from 9am to 6pm. I have enclosed a payment in the amount of taxes owed, net of the penalty portion.

Sincerely,
/s/ Jane Doe

Editorial Note:

• If you have the funds to pay, you should pay the tax owed. 
• If you do not have the funds, you can apply for an Installment Agreement to pay back taxes owed over time or file an Offer-in-Compromise based upon reasonable collection potential (RCP).
• When enclosing your documents, be sure to keep copies for yourself.
• Review the penalty to determine:
• how and why it was assessed (late-file, late-pay and/or underreporting penalties), 
• what happened to create a situation for the taxpayer (TP) where a penalty was assessed (why the TP didn’t file or pay), and 
• whether the penalty abatement program would benefit the TP, and
• should TP apply for penalty abatement?
• For example, a TP who is Currently-Not-Collectible (CNC) would not benefit from penalty abatement; although, a first time abatement may be beneficial for someone who qualifies for CNC and has maxed out the 25% failure to pay penalty on their oldest tax year. 
• Abatements can be requested and authorized over the phone with ACS.
• More difficult to obtain are Reasonable Cause abatements. These abatements generally must be submitted on Form 843 and have well established reasonable cause criteria that must be met to qualify. File for these abatements at the end once a collection status has been resolved for the client.
• It will take a few months to get a response from the IRS, and whether the abatement is possible.  
• Reason for an abatement request cannot be illegal or a ‘protester’ argument. 
• When filing Form 843, know the IRS is the determining party. The TP will receive notice of acceptance or denial within three to six months. Any denial has appeal rights, so if the TP disagrees, the TP can respond to the IRS denial accordingly.
• IRM §20.1 contains the Penalty Abatement Handbook, which includes the reasonable cause standards.

Enc.

K-12 Diverse Abilities Curriculum

K-12 Diverse Abilities Curriculum

Learning Disabilities Checklists and Worksheets
http://www.ncld.org/learning-disabilities-resources/checklists-worksheets

Family Health Guide to Learning Disabilities
https://www.kanetix.ca/family-health-guide-to-learning-disabilities

Coping with Disabilities - National Caregivers Library
http://www.caregiverslibrary.org/caregivers-resources/grp-disabilities/coping-with-disabilities-article.aspx

Benefits for People with Disabilities
http://www.ssa.gov/disability/

Medicare and Social Security Disability: Benefits for Disabled Individuals
http://www.planprescriber.com/medicare-insurance-news/social-security-disability/

American Association on Health and Disability
http://www.aahd.us/

Local Doctor Finder: Search by Disability
http://www.zocdoc.com/procedures

I Can Do It, You Can Do It!: President's Council on Fitness, Sports & Nutrition
http://www.fitness.gov/participate-in-programs/i-can-do-it-you-can-do-it/

ADA Accommodation for Swimming Pools
http://blog.intheswim.com/swimming-pool-lifts-and-the-ada-pool-lift-law/

Siblings with Disabilities
http://www.parentcenterhub.org/repository/siblings/

Disability Home Accommodation Cost Guide
http://www.homeadvisor.com/cost/disability-accommodation/

Disability and Health
http://www.cdc.gov/ncbddd/disabilityandhealth/people.html

Fire Safety & Disabilities Guide
http://www.improvenet.com/a/fire-safety-and-disabilities-guide

Source: Rebecca Muller

r.muller@educatorlabs.org
EducatorLabs.org | Cultivating. Connecting. Curating.
EducatorLabs | 2054 Kildaire Farm Rd. #204 | Cary, NC | 27518

The Seven Spiritual Laws of Success – A Practical Guide to the Fulfillment of Your Dreams :: Author: Deepak Chopra

The Seven Spiritual Laws of Success – A Practical Guide to the Fulfillment of Your Dreams
Author: Deepak Chopra

Freely inspired in Hinduist and spiritualistic concepts, which preaches the idea that personal success is not the outcome of hard work, precise plans or a driving ambition, but rather of understanding our basic nature as human beings and how to follow the laws of nature. According to the book, when we comprehend and apply these laws in our lives, everything we want can be created, “because the same laws that nature uses to create a forest, a star, or a human body can also bring about the fulfillment of our deepest desires”.

1. The Law of Pure Potentiality: Take time to be silent, to just BE. Meditate for 30 minutes twice a day. Silently witness the intelligence within every living thing. Practice non-judgment.
2. The Law of Giving: Today, bring whoever you encounter a gift: a compliment or flower. Gratefully receive gifts. Keep wealth circulating by giving and receiving care, affection, appreciation and love.
3. The Law of Karma: Every action generates a force of energy that returns to us in like kind. Choosing actions that bring happiness and success to others ensures the flow of happiness and success to you.
4. The Law of Least Effort: Accept people, situations, and events as they occur. Take responsibility for your situation and for all events seen as problems. Relinquish the need to defend your point of view.
5. The Law of Intention and Desire: Inherent in every intention and desire is the mechanics for its fulfillment. Make a list of desires. Trust that when things don’t seem to go your way, there is a reason.
6. The Law of Detachment: Allow yourself and others the freedom to be who they are. Do not force solutions—allow solutions to spontaneously emerge. Uncertainty is essential, and your path to freedom.
7. The Law of Dharma: Seek your higher Self. Discover your unique talents. Ask yourself how you are best suited to serve humanity. Using your unique talents and serving others brings unlimited bliss and abundance

Federal Tax Collection Rules & Procedures :: Internet Resource Links

Federal Tax Collection Rules & Procedures :: Internet Resource Links:
Purpose of this public resource: This site provides an organized assembly of many rules and procedures that govern the collection of unpaid federal tax. Electronic links connect researchers to the full text of many statutes, regulations, Internal Revenue Manuals, US Attorney Manuals, IRS Forms, US Government internet resources, several published cases and other materials. Source: irscollectionlaw.com

Chief Counsel Notices
Chief Counsel Bulletins
CODES - transcript and processing, 2011
FOIA Request Forms, IRS
Innocent Spouse, IRS self-help tool and information
Installments, IRS self-help tool and information
Internal Revenue Code
Internal Revenue Manuals
IRS Forms
IRS Publications
IRS Reading Room (notices, CCA, training material, etc.)
Treas. Regulations
US Attorney Manuals, index
Criminal Tax Manual (DOJ)

Indian-Spiced Roasted Chickpeas

Indian-Spiced Roasted Chickpeas
Makes: 1 servings for 6 people

Ingredients:
2 cups chickpeas, (red kidney beans, white navy beans, black beans, red chili beans, cannellini white kidney beans) rinsed and drained
1 tablespoon lemon juice
1 tablespoon olive oil
1 1/2 teaspoons ground cumin
1/2 teaspoon ground curry
1/2 teaspoon salt
1/4 teaspoon ground cinnamon
Black pepper to taste
Cayenne to taste
Crushed Red Peppers to taste
Ground Fenugreek to taste

Wasabi to taste
Cilandro to taste

Directions
1. Preheat oven to 425 F

2. Combine all the ingredients in a bowl; toss well

3. Spread on a foil-lined baking sheet and roast, tossing halfway through, for 20 to 25 minutes, or until the chickpeas are dark brown in spots

4. Let cool 

5. (Can be kept in an airtight container in the fridge for up to 4 days)

Nutrition Facts
Servings Per Recipe: 1 servings for 6 people
Amount Per Serving: 183 cal, Fat total 5g, sat. fat 1g, carb 29g, fiber 6g, protein 6g

Source: Fitness Magazine

50% Bonus Depreciation Permanently Extended: Faster Tax Write-Off for Equipment

50% Bonus Depreciation: Faster Tax Write-Off for Equipment 

• 50% Bonus depreciation in some form has been in place since 2008 during President George W. Bush’s tenure in the White House to help stimulate a lagging economy.
• Under "Bonus Depreciation", companies can deduct an additional 50% of the cost of an equipment purchase in the first year of service, on top of the regular depreciation schedule.
• 50% Bonus depreciation is eligible in 1st year of service only.
• Bonus depreciation must be taken: 
• AFTER any elected §179 deduction and 
• BEFORE any regular depreciation.
• 50% Bonus depreciation must be on: 
• New property, 
• NOT Used property, and 
• New-in-Service to the taxpayer.
• Illustration: Assume that in 2013, a taxpayer purchased new depreciable property and placed it in service. (Consider elected §179 expensing to the cost of the property to be 20,000).
• Property’s cost is 100,000, and it is 5-year property subject to 200%/DB/Half-Year (MACRS method/convention).
• §179 elected is 20,000
• Additional first-year (50% Bonus depreciation) depreciation allowed is 40,000. [50% x (100,000 - 20,000)] 
• The remaining 40,000 (100,000 - 20,000 - 40,000) of the cost of the property is depreciated under the rules applicable to 5-year property. 
• 8,000 is allowable as current year depreciation expense in 2013 (8,000 results from the application 200%/DB/Half-Year method and convention to the remaining 40,000). 
• Total depreciation deduction with respect to the property for 2013 is 68,000. The remaining 32,000 Adjusted Basis of the property will be recovered over the remaining life of the asset using applicable depreciation rules.
• Additional first-year depreciation deduction is allowed for both the regular tax and the alternative minimum tax (“AMT”).
• IRC §168(k). Additional first-year depreciation deduction is subject to the general rules regarding whether an item must be capitalized under §263A.
• 100% of the adjusted basis of qualified original-use property that meets the requirements for the additional first-year depreciation is eligible. 

H.R.4718 - To amend the Internal Revenue Code of 1986 to modify and make permanent bonus depreciation

Foreign Financial Asset Disclosures

Foreign Financial Asset Disclosures

• In IR-2014-73 the IRS has announced changes in two of its programs related to offshore accounts. 
• The IRS has modified the terms of the Offshore Voluntary Disclosure Program (OVDP), which allows individuals to avoid criminal prosecution if they disclose their foreign accounts and pay a substantial penalty. 
• The IRS has expanded the streamlined filing compliance process, or “streamlined procedures,” which are aimed at US taxpayers who have failed to disclose their foreign accounts but who are not willfully evading their tax obligations. These programs are part of a wider effort to stop offshore tax evasion, which includes enhanced enforcement, criminal prosecutions, and implementation of third-party reporting via the Foreign Account Tax Compliance Act (FATCA). 

Changes include:

• Additional taxpayer information requirements. 
• Taxpayers are no longer exempt due to a "risk" questionnaire and unpaid taxes of less than $1,500. Treasury Department and Department of Justice have pledged to pursue every non-compliant person. 
• Taxpayers must submit all account statements and pay the offshore penalty at the time of the OVDP application. 
• Taxpayers are allowed to submit voluminous records and supporting documents electronically rather than on paper. 
• To be in compliance when submitting an OVDP Application, accounting must be complete and accurate and payments must be made in full. 
• US Taxpayers residing in the US can be subject to a special 5% OVDP asset penalty. 
• US taxpayers living abroad may apply to have OVDP asset penalties waived. 
• Increased penalties, (27.5% to 50%), incentive for holders of hidden assets to come in sooner if they are concerned about the possibility of an investigation, for taxpayers who invest in institutions that are under DOJ federal investigation. 
• A non-willful conduct testament can assist some taxpayers with compliance. 
• Penalties can be eliminated for some non-willful taxpayers. 
• The 50% penalty is comprehensive and applies to foreign partnerships, stock holdings and all other investments. 

Foreign Account Reporting Requirements

• There are a number of reporting requirements for taxpayers with foreign accounts. 
• Affected taxpayers must fill out and attach to their 1040 tax return, Schedule B, which asks about the existence of foreign accounts, (check "Box B" Yes or No). 
• Some taxpayers have to fill out Form 8938, Statement of Foreign Financial Assets. 
• Other filing requirements apply to foreign trusts. 
• Taxpayers with foreign accounts whose aggregate value exceeds $10,000, at any time during the year, must file a Form 114, Report of Foreign Bank and Financial Accounts (FBAR) electronically through the Financial Crimes Enforcement Network’s (FinCEN) BSA E-Filing System. 
• Failure to comply with applicable reporting requirements can result in civil and criminal penalties.

On July 1, 2014, the new information reporting regime instituted by FATCA will go into effect. Thousands of foreign financial institutions will begin to report to the IRS the foreign accounts held by US persons.

Courtesy:  MaSEA

References: CCH

IRS Offshore Voluntary Disclosure Efforts Produce $6.5 Billion; 45,000 Taxpayers Participate

Tax Implications of Internet Currencies

Tax Implications of Internet Currencies

Not surprisingly in IRS Notice 2014-21 the IRS concluded that virtual currency transactions for services and goods had tax consequences. Virtual currency is a growing digital phenomenon where internet users trade real currency for board game dollars, like Monopoly. BitCoin has the most virtual currency activity. Refer to: weusecoins.com for background about internet currency.

The IRS clearly determined this digital currency activity is a property transaction that is measured by the FMV equivalent in US Dollars. The notice contains several key declarations.

• No foreign currency gain or loss is allowed
• 1099 reporting requirements exist
• A business/hobby determination is required
• Payroll and self-employment taxes are required for services and compensation
• Sections 6662, 6721, and 6722 penalties can be applied.

IRS Notice 2014-21 was written by the division of self-employment taxes within the Chief Counsel's Office. When reviewing your internet activity keep in mind the requisites of bartering activities and retain an internet money transaction log as part of your recordkeeping.
Courtesy: Massachusetts Society of Enrolled Agents

• BitCoin received in connection with a trade or business or received as wages is subject to ordinary income treatment at time received. BitCoin held for less than a year prior to disposition may be declared short-term capital gains or foreign exchange gains, receiving ordinary income treatment. BitCoin held more than one year prior to disposition, may be declared long term capital gains (with proper records) or foreign exchange gains.
• Don’t forget to include BitCoin activity when calculating your net investment income tax (NIIT).  If you are fortunate enough to have MAGI over the threshold amounts ($200,000 Single/$250,000 MfJ), BitCoin gains may be subject to NIIT. The statutory definition for net investment income includes interest, dividends, capital gains, rental and royalty income, income from businesses involved in trading of financial instruments or commodities and businesses that are passive activities to a taxpayer. BitCoin could fall into several of these categories, depending on your personal circumstances. Non-passive business income is not subject to the NIIT tax.
• Declare foreign banking activity by filing a Foreign Bank Account Report (FBAR), if necessary. US persons (citizens, residents and entities created in the US) must file the FBAR if, at any time during the year, they had a financial interest or signature authority over a foreign financial account with a value of more than $10,000. A wallet with an exchange located in a foreign country, such as Mt. Gox, (Mt. Gox was a BitCoin exchange based in Tokyo, Japan) would cause the taxpayer to be subject to the FBAR rules. Note that the reporting threshold applies to your account balance on every day of the year, not the average balance or balance on just the last day. The FBAR threshold is also crossed when multiple foreign financial accounts have an aggregate value of greater than $10,000.

IRS' "New & Improved" Taxpayer Bill of Rights

IRS' "New & Improved" Taxpayer Bill of Rights

The ten rights, IRS website, are:

1. The Right to Be Informed: Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.
2. The Right to Quality Service: Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.
3. The Right to Pay No More than the Correct Amount of Tax: Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.
4. The Right to Challenge the IRS’s Position and Be Heard: Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.
5. The Right to Appeal an IRS Decision in an Independent Forum: Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.
6. The Right to Finality: Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.
7. The Right to Privacy: Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.
8. The Right to Confidentiality: Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information.
9. The Right to Retain Representation: Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.
10. The Right to a Fair and Just Tax System: Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

"The Taxpayer Bill of Rights contains fundamental information to help taxpayers," said IRS Commissioner John A. Koskinen. "These are core concepts about which taxpayers should be aware. Respecting taxpayer rights continues to be a top priority for IRS employees, and the new Taxpayer Bill of Rights summarizes these important protections in a clearer, more understandable format than ever before."