Tax Information for Members of the Armed Forces

Happy Memorial Day!

If you are a veteran or are on active duty, thank you! I thought I would take this opportunity to post the link to an IRS page dedicated to providing information to members of the armed forces. http://www.irs.gov/newsroom/article/0,,id=97273,00.html

Also here are links to Publication 3, Armed Forces' Tax Guide. There is an online version and a PDF.
Online: http://www.irs.gov/publications/p3/index.html
PDF:    http://www.irs.gov/pub/irs-pdf/p3.pdf

If you would like a paper copy of the document, contact the IRS by telephone. 1-800-829-3676

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding (Sounds like a good idea, but . . .)

Have you heard of Rollovers for Business Startups or ROBS? It sounds like a great idea, except for one small problem which I will get to in a minute. With ROBS, you use a 401(k) or IRA distribution to fund a new business and avoid taxes and penalties on 401(k) or IRA distributions. The idea is to form a new corporation, set up a new 401(k), rollover the funds into the new 401(k), and then use the funds to purchase stock in the new corporation.

Sounds like a great idea doesn’t it? Here is the small problem I mentioned earlier. The IRS is examining these plans, and in October 2008 even issued a memo saying that some of these plans may violate tax law. The plans may also violate some rules affecting pensions, so the IRS and Department of Labor are working together.

Read this article posted on the Tax Prof Blog for more details.

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding

TX Society of CPAs Federal Tax Policy Committee Issues Letter to IRS Regarding Uncertain Tax Positions

The Texas Society of CPAs Federal Tax Policy Committee sent a letter May 27, 2010 to IRS Commissioner Doug Shulman concerning Announcement 2010-9, Uncertain Tax Positions – Policy of Restraints (and related Announcements and Instructions).

The six page letter outlines concerns with the policy draft. If you would like more information or to read the letter, see the post on TSCPA's Federal Tax Policy blog.

Tax Foundation launches 13-part series on Bush tax cuts

Frequently Asked Questions About the Bush Tax Cuts

The Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937, has launched a 13-part series about the Bush tax cuts on the Tax Policy Blog. The cuts are scheduled to expire at the end of 2010.

The series explores likely outcomes if the cuts expire, are extended or made permanent, or if President Obama's budget, which includes a combination of expirations and extensions, is adopted. To read about the series click the link above, or click here to read the articles in the series.

Next IRS Open House Is June 5th

Saturday June 5, The IRS is having a nationwide open house to help small businesses and individuals solve tax problems. The IRS will open approximately 200 IRS offices. There will be at least one in every state. Each office will be open from 9:00 a.m. until 2:00 p.m. local time. Here is a state by state list directory of participating offices.

IRS to offer guidance for charities that missed the May 17 filing deadline

Commissioner Doug Shulman issued a statement on the filing deadline for small charities. He said in part:

Now that the May 17 filing deadline has passed, it appears that many small tax-exempt organizations have not filed the required information return in time. These organizations are vital to communities across the United States, and I understand their concerns about possibly losing their tax-exempt status.

. . . many of these smaller organizations are just now learning of the May 17 deadline. I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status.

Commissioner Shulman went on to say that the IRS will be providing additional guidance in the near future and that organizations should go on and file their information returns even though the May 17, 2010 deadline has passed. It is easier for small organizations (annual receipts of $25,000 or less) to file than they may realize. They can fill out the electronic notice Form 990-N (e-Postcard).

For more information about filing requirements, see Annual Electronic Filing Requirement for Small Exempt Organizations - Form 990-N (e-Postcard) on the IRS website.

Still no tax refund?

Have you been waiting for more than eight weeks?
The IRS says,

If it's been more than 8 weeks since you filed your amended return and you haven't received your refund, please contact a customer service representative by calling 800-829-1040. From outside the U.S., call 215-516-2000. TTY/TDD: 800-829-4059.

You can also use Where's My Refund? tool on the IRS website.

According to the IRS you can get information about your refund 72 hours after they acknowledge receipt of your e-filed return or three to four weeks after mailing a paper return. (You cannot use Where's My Refund? for an amended return.)

You will need to provide the following information from your return to identify yourself.

• Your Social Security Number (or Individual Taxpayer Identification Number)
• Your Filing Status
• The exact whole dollar amount of your refund

If you need to file a claim if your refund check was lost, stolen, or destroyed, the Where's My Refund? tool can provide you with instructions. You may also be able to change your address.