Tax Headlines

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IRS Releases Dirty Dozen Tax Scams for 2012 (IR-2012-23)

The Internal Revenue Service issued its annual “Dirty Dozen” list of tax scams, advising taxpayers to use caution to protect themselves from being victims in a variety of schemes ranging from identity theft to return preparer fraud. The schemes peak during the filing season and they can be used in-person, on-line and by e-mail to mislead individuals with promises of refunds and free money. The IRS Criminal Investigation Division and the Department of Justice work closely to identify the scams and prosecute the criminals who commit them.

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Agreement Reached on Payroll Tax Cut Extension

Negotiators struck a deal late on February 15 to extend a payroll tax cut, unemployment benefits and Medicare payments to physicians through the end of 2012. However, the timing of votes on the measure remains uncertain as tax writers continue work on the legislative text. With lawmakers preparing to leave town for a week-long Presidents’ Day recess, leaders of both parties remained unwillingly to commit to holding votes within the next two days.

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Pennsylvania ~ Multiple Taxes: Keystone Opportunity Zone Act Amended

Pennsylvania Gov. Tom Corbett has signed legislation into law amending the Keystone Opportunity Zone (KOZ), Keystone Opportunity Expansion Zone (KOEZ), and Keystone Opportunity Improvement Zone (KOIZ) Act. Effective immediately, the legislation authorizes the extension of tax exemptions, deductions, abatements, and credits; the creation of additional KOEZs; the expansion of existing zones for job creation; and also repeals the law’s original sunset date of December 31, 2018. Tax benefits available to businesses and residents located in KOZs, KOEZs, and KOIZs include a sales and use tax exemption, a property tax abatement, and credits against corporate and personal income, capital stock and franchise, insurance gross premiums, bank shares, and mutual thrift institutions taxes.

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CCH Webinar: Gift Cards and Unclaimed Property Rules: Maximize Opportunities and Avoid Serious Pitfalls Scheduled for February 22

CCH Tax and Accounting is hosting a live two-hour Webinar, Gift Cards and Unclaimed Property Rules: Maximize Opportunities and Avoid Serious Pitfalls, on Wednesday, February 22, 2012, at 1 p.m. Eastern; noon Central; 11 a.m. Mountain; 10 a.m. Pacific. This two-hour CCH Webinar, presented by Christina Edson, J.D., LL.M. and Mark Siegel, M.S.T., C.P.A., both senior managers at BDO, will discuss current trends and issues affecting state unclaimed property laws as they pertain to gift cards and gift certificates.

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IRS Updates Ex Parte Communications Between Appeals and Other IRS Functions (IR-2012-22; Rev. Proc. 2012-18)

The IRS has provided an update to Rev. Proc. 2000-43, 2000-2 CB 404, which provides guidance regarding ex parte communications between Appeals and other Internal Revenue Service functions. The update was necessary due to changes to some of the IRS business practices and to its adoption of new practices since the existing rules were issued in October 2000. The new guidance implements a provision aimed at ensuing that the Office of Appeals remains an independent and flexible vehicle for settling audit and collection-related disputes, without litigation, between taxpayers and the IRS.

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IRS Offers Guidance to Issuers of Qualified Mortgage Bonds and Mortgage Credit Certificates (Rev. Proc. 2012-16)

The IRS has released guidance with respect to the computation of the housing cost/income ratio by issuers of qualified mortgage bonds (QMBs) and mortgage credit certificates (MCCs). Under Code Sec. 25(c)(1), state and local governments can issue MCCs to qualified homebuyers to acquire, rehabilitate, or improve a primary residence. Under Code Sec. 143(a), state and local governments can issue QMBs, all proceeds of which must be used to finance owner-occupied residences. Recipients of QMBs and MCCs must meet the income requirements of Code Sec. 143(f).

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Lawmakers Close to Payroll Tax Deal

Negotiators for a payroll tax extension (HR 3630) were reportedly closing in on a final agreement late on February 15, with the expectation that votes in both chambers would occur by the end of the week. House Speaker John Boehner, R-Ohio, told reporters following a meeting with rank-and-file House Republicans that there is a tentative agreement that still needs a “few details” worked out.

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Texas ~ Corporate Income Tax: Constitutional Challenge Dismissed for Lack of Jurisdiction

The Texas Supreme Court dismissed, for lack of jurisdiction, an original proceeding brought by a group of corporations (taxpayers) which claimed that the Texas franchise tax is unconstitutional. The taxpayers had argued that the tax violates the Equal and Uniform Clause of the Texas Constitution and the Equal Protection, Due Process, and Commerce Clauses of the United States Constitution.

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