Finding the bottom line for families: Tax credits vs. the Canada Child Benefit

By Aaron Wherry
CBC News

Critics say Liberals have raised taxes on middle class and compensated them with additional program spending

Beyond the riveting drama of Finance Minister Bill Morneau’s personal finances and the ethical implications thereof — a topic that has dominated question period for weeks — there has lingered a potentially useful debate about taxes.

That debate starts with what should be a reasonably straightforward question: Have federal taxes for middle-class families increased or decreased over the last two years?

Stick with that question long enough and you end up at an argument that Justin Trudeau’s Liberals are fostering a “dependence on government” and discouraging hard work…

Read the full article at CBC News.

IRS Tax Lessons For Everyone From Paul Manafort Indictment

By Robert W. Wood
FORBES

The criminal charges filed against former Trump campaign manager Paul Manafort and Richard Gates are serious. They are only accusations at this point. All criminal defendants are presumed innocent until they are proven otherwise in a court of law. Still, the 12-count 31-page indictment here is a daunting list of accusations. Manafort and Gates stand accused of conspiracy against the United States, conspiracy to launder money, failing to report foreign bank and financial accounts, acting as an unregistered foreign agent, and making false statements. It’s tough to unpack most of those charges. Even so, there’s a lot in it from which regular taxpayers can learn about how to handle their own taxes and the IRS…

Read the full article at Forbes.

IRS Preps For 2018 Tax Filing Season, Announces PTIN Renewal Is Underway

By Kelly Phillips Erb
FORBES staff

The Internal Revenue Service has announced that the Preparer Tax Identification Numbers (PTINs) for 2018 is underway. All current PTINs will expire on December 31, 2017.

If you’re scratching your head and thinking that you seem to recall that tax return preparers no longer need a PTIN, here’s the reason for the confusion.

The PTIN system was shut down earlier this year following a U.S. District Court ruling which barred IRS from charging PTIN fees to tax return preparers. The ruling was in response to a class action suit which challenged the right of the IRS to require and charge for PTINs. A PTIN is an identifying number – like a Social Security number – for tax return preparers and certain other tax professionals. Since 1999, tax return preparers have been able to use a PTIN on tax returns instead of their Social Security Numbers; they also used to be free…

Read the full article at Forbes.

IRS Withdraws Proposal on Property Valuations as Part of Tax Reform Initiative

By Terry Sheridan
accountingweb

Only weeks after Treasury Department Secretary Steven Mnuchin recommended revoking regulations proposed under Section 2704, the IRS withdrew the proposal that would have changed property valuations for estate and gift taxes.

The withdrawal notice is scheduled to be officially published in the Federal Register Oct. 20.

The now-defunct proposed changes to Section 2704 addressed restrictions on liquidation of an interest for estate, gift and generation-skipping transfer taxes…

Read the full article at accountingweb.com.

IRS Announces 2018 Retirement Plan Contribution Limits For 401(k)s And More

By Ashlea Ebeling
FORBES staff

After three years stuck at $18,000, the amount you can contribute to your 401(k) workplace retirement plan inches up for 2018 to $18,500. The Treasury Department has announced inflation-adjusted figures for retirement account savings for 2018, and that’s one of the tweaks that will help savers. Much stays the same, but in addition to the jump in the 401(k) limit, there are increases to income phase-outs for IRA contributors, and to the adjusted gross income limits for snagging the saver’s credit…

Read the full article at Forbes.

IRS won’t accept returns next year without health coverage

By Michael Cohn
AccountingToday.com

The Internal Revenue Service said that for the upcoming 2018 filing season, it‎ will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act, the first tax season it has refused to accept such returns.‎

In an update Friday to the web page of its ACA Information Center for Tax Professionals, the IRS said it will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment. On top of that, the IRS said tax returns filed on paper that don’t address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed…

Read the full article at AccountingToday.com.

IRS Announces Taxpayer Relief For Victims Of California Wildfires

By Kelly Phillips Erb
FORBES staff

As deadly wildfires continue to ravage parts of California, the Internal Revenue Service (IRS) has announced that victims of those fires now have until January 31, 2018, to file certain individual and business tax returns and make certain tax payments.

Here’s what the relief entails: tax filing and payment deadlines which began starting on October 8, 2017, will be pushed off until January 31, 2018. That means that returns and payments that were originally due during this period, including the January 16, 2018, deadline for making quarterly estimated tax payments, will now be January 31, 2018.

Read the full article at Forbes.

IRS suspends $7.2 million Equifax contract

By Steven Musil
Cnet

The IRS has temporarily suspended the $7.2 million contract it recently awarded Equifax to help verify taxpayer identity and validation for the government agency, the IRS said Thursday.

Equifax has been under intense scrutiny since disclosing last month it suffered a massive hack that may have exposed personal information for roughly half the US population. The move was announced amid reports the credit-reporting bureau had been attacked yet again, this time serving up malicious software to those who visited the company’s website.

Read the full article at cnet.com.

Forest Whitaker Loses Tax Case, Provides IRS Handling Tips

By Robert W. Wood
FORBES

No one wants to owe the IRS, or to have to ask the powerful tax collection agency for extra time to make payments. But it happens, even to wealthy and famous people. In Forest Whitaker v. Commissioner, No. 16-73450 (9th Cir. 2017), the Ninth Circuit Court of Appeals has dealt actor and director Forest Whitaker a blow about his own taxes. The case says the IRS did not abuse its discretion in rejecting Whitaker’s request for installment payments. The IRS instead demanded full payment, enforcing collection. The decision in favor of the IRS and against the actor and his wife should hardly be a surprise. Yet installment payments are often quite possible with the IRS. So why did Whitaker lose?FORBES

Read the full article at Forbes.

False IRS Tax Returns — Personal Or Business — Can Mean Prison

By Robert W. Wood
FORBES

You might think of criminal exposure for tax returns primarily with personal returns, not business. But here’s a reminder about business tax returns too. A Dublin, California man was sentenced to prison for filing a false corporate tax return. Shiv D. Kumar, 60, was sentenced to serve 30 months in prison, after previously pleading guilty. According to documents filed with the court, Kumar was the sole shareholder and president of A-Paratransit Inc. (API), a company that provided transportation services to disabled individuals. Kumar filed false corporate returns with the IRS for tax years 2009 and 2010, which underreported API’s gross receipts by $2,229,216 and $2,412,435, causing a tax loss of $1,584,055. Kumar deposited API’s receipts into three separate bank accounts held at different banks…

Read the full article at Forbes.