• Slippery slope – Opens the door for further government intervention into the Internet and for states to reach across their borders for other taxes.
• Too confusing – Small businesses would be forced to accommodate over 9,000 highly variable state and local tax codes and be required to settle disputes with out-of-state revenue boards, potentially in out-of-state courts.
• Discourages tax competition – Rather than competing to lower taxes and attract businesses, states will compete to raise taxes on residents of other states.
• Expands state tax authority – State governments will be able to tax across their borders despite clear legal and judicial precedent arguing otherwise.

• May 24
• June 14
• July 5
• July 22
• August 30

The White House Office of Management and Budget has said that the following broad areas of IRS discretionary activity are subject to a 5% “across the board” reduction in spending through September 30:

• Enforcement ($267 million)
• Operations Support ($199 million)
• Taxpayer Service ($114 million)
• Business Systems Modernization ($17 million)

The relief applies to the late-payment penalty (0.5% per month) charged on tax payments made after the regular filing deadline.

Taxpayers using forms claiming such tax benefits as depreciation deductions and a variety of business credits qualify for this relief. A complete list of eligible forms may be found in Notice 2013-24.

Taxpayers qualify for this relief if they filed a timely extension, estimating the tax they thought they would owe, and paying the tax by the extension date, following up with actual return filing by the extended due date.

• IRS2Go – a free mobile app through which you can find out about your refund status, and other tax news updates.  This is available for the iPhone, iTouch or Android mobile devices.
• YouTube – IRS offers video tax tips on a variety of subjects.
• Twitter – Tweets from @IRSnews provide tax-related announcements and daily tax tips.
• Podcasts – IRS has short audio recordings that offer one tax-related topic per podcast, available on iTunes or through the IRS Multimedia Center (at www.irs.gov).
• Tumblr – A microblogging platform where users can access IRS tax tips, videos, and podcasts.  Tumblr can be accessed from your browser, smartphone, tablet or desktop.

Federal law imposes restrictions on sharing of taxpayer information, including information that can be shared with state and local law enforcement. IRS has a program, though, which allows taxpayers the option to permit information to be shared with state and local law enforcement specifically to assist law enforcement officials with their efforts in pursuing identity thieves.

In January of this year, IRS conducted a very successful identity theft enforcement “sweep.” This nationwide effort against identity theft suspects led to 734 enforcement actions, including 298 indictments, complaints and arrests. During fiscal year 2012, IRS efforts led to 2,400 other enforcement actions against identity thieves.

So, taxpayers who can demonstrate “reasonable cause” and lack of willful neglect will not be snagged for the late filing penalty if their extension payment comes up short because of the unavailability of a whole raft of IRS forms, including, among a long list of others:

• Form 3800 – General Business Credit
• Form 5695 – Residential Energy Credits
• Form 8582 – Passive Activity Loss Limitations

Check out IRS Notice 2013-24.

IRS recently announced they are holding just over $917 million of dough potentially owing to about 984,000 taxpayers who did not file a 2009 Federal income tax return! And they estimate that half of these refunds would amount to more than $500.

Some people may not have filed because they had too little income, even though some taxes were withheld from them. In order to get that money back, you must file that 2009 return by April 15, 2013. If IRS thinks you owe for 2010 and/or 2011 (because you didn’t file for those years either), they may withhold any 2009 refund to which you may be entitled. In addition, any refund could be applied to amounts owed to your state taxing agency, or amounts you owe for delinquent child support or past due Federal debts, such as student loans.

The taxpayers had entered into a contract which provided that the construction costs were to be paid in installments, upon completion of certain “milestones.” Soon, the contractor began asking for faster payments, and then later died. Upon concluding that some of their payments had been diverted for purposes unrelated to their home construction, the taxpayers claimed a theft loss deduction.

IRS viewed the situation as one in which the contractor had simply failed to live up to the terms of his contract. The Court, however, concluded that the contractor had made misrepresentations to induce the taxpayers to enter the contract, and he also made false statements regarding progress on the project. His behavior constituted “home repair fraud” under the operative state law.

Roth conversions in 2010 from traditional IRAs are shown on Form 1040, Line 15b.

Check out IRS Publication 590 and IRS Publication 575 for more info.

• Family partnership discounts – Courts sometime allow estates to “discount” the fair market value of interests in family partnerships or family limited liability companies – even when assets such as marketable securities are held by such entities. There is a proposal on the table which would disallow such discounts.
• Currently there is no explicit rule preventing a low valuation of fair market value for an estate and a higher valuation of the asset for purposes of stepped up basis in the hands of the heir. A proposal would require the same value for both purposes.