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IRS Issues Proposed Regulations on Reporting Requirement for Payment Card and Paypal Transactions

November 25th, 2009 No comments

The Housing Assistance Act of 2008 had Paypal and ebay bloggers outlining what would be in store for them in the future. The IRS posted this article on the proposed regulations for merchant card and third party transactions reported to the IRS beginning in 2011. They are allowing the public to make comments on the new form 1099-K.

I thought this might be interesting for those of you who have small businesses and rely primarily on internet transactions.

R-2009-106, Nov. 23, 2009 WASHINGTON — The Internal Revenue Service today issued proposed regulations under a new statute requiring that, starting with transactions in calendar year 2011, the gross amount of payment card and third-party network transactions be reported annually to participating merchants and the IRS.

The provision was enacted as part of the Housing Assistance Tax Act of 2008 and is designed to improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete.

“Time and time again, we have seen that better information reporting helps the tax system work better by ensuring that everyone pays what they owe,” said IRS Commissioner Doug Shulman. “The new law gives us an important new tool for closing the tax gap and also provides business taxpayers better documentation to compute and report their income and expenses. The IRS will work closely with stakeholder groups to ensure a smooth implementation of this new program.”

These proposed regulations, posted today on IRS.gov, propose rules to implement reporting of credit card, debit card and similar transactions, as well as transactions settled through third-party payment networks, such as third-party organizations that settle online transactions. The IRS also released for comment a draft version of new Form 1099K, Merchant Card and Third-Party Payments, which will be used to make these reports.

The new law requires banks and other payment settlement entities to report payment card and third-party network transactions with their participating merchants. The IRS emphasized that individual cardholders are unaffected by this requirement, and none of the cardholder’s personal information will be shared with the IRS.

The IRS has created Form 1099-K, which is similar to the existing Forms 1099 used to report interest, dividends and other payments. The first information return covering calendar year 2011 must be filed with the IRS and furnished to participating merchants in early 2012. Among other things, the proposed regulations describe who is required to file a return and which payment card and third-party network transactions are subject to the reporting requirement. The proposed regulations also provide numerous examples.

The IRS welcomes comments on these proposed regulations and the draft Form 1099-K. Comments must be received by Jan. 25, 2010, and may be submitted electronically, by mail or hand delivered to the IRS. A public hearing is scheduled for Feb. 10, 2010, in Washington, D.C.

The proposed regulations provide details on submitting comments or participating in the public hearing.

The IRS continues to work closely with stakeholders to ensure the smooth implementation of this new information reporting program, including the mitigation of penalties in the early stages of implementation for all but particularly egregious cases.

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Vegetarianism, Agribusiness – Taxing Meat Eaters Anyone?

November 23rd, 2009 No comments

Not long ago my diet consisted of mostly vegetables and rice with meat being consumed once, maybe twice a week. Since becoming pregnant, I eat meat everyday to meet my 100 grams of protein a day. I plan on teaching my son about the effect meat has on the environment and the benefits of fresh produce (home grown and within 100 miles if possible). I found the following article by Linda M. Beale to be informative, entertaining and it made me think that her idea of taxing agribusiness might not be a bad idea. Linda M. Beale is a Law Professor who teaches courses on various types of taxes, including Federal Income Tax.

This article is from her blog “A Taxing Matter” dated November 19, 2009:

As some of you may know, I am one of the many people who eat a vegetarian diet.  I don’t eat cows, pigs, fish, whales, sharks, chicken, turkey, sheep, wild game, tame game… As I sometimes say when people ask me about my diet, I eat everything you eat, except for a very short list of items–the critters that can move themselves from one place to another (or move their appendages) under their own propulsion.

(Note that we often have two words for animals that we eat–their live-form word –e.g., cow, sheep, pig– and their edible-corpse form word –e.g., beef, mutton, pork.  That evolved when we borrowed the Romance language word for what we ate but kept the Germanic language word for the animals.)

It started when I was a child–I was one of those who would cut the meat into tiny pieces and then spread it all over my plate so it looked like I’d eaten it.  The idea of eating a cow, with those beautiful liquid brown eyes, was repulsive.  (My father came from a family with thirteen kids in the hills of Tennessee, so I’d seen cows up close.)  I even took a whole piece of veal once and hid it behind the dining room cabinet (taking it out to the wastebasket after it dried)!  I refused to eat the squirrel and venison that my dad brought home from hunting trips (mostly, if not always, somebody else’s kill).  I even refused to let my cocker spaniel share in that dead stock.

But now that I’m an adult, why do I maintain that diet?  I get asked that a lot.

Funny, nobody says (with shocked exression)–”Gee, you eat meat?  Why would anyone ever want to eat a toxins-laden dead corpse of an animal that lived a horrendous life and suffered an agonizing death? ” But they do often ask–usually treating it as a good-natured tease about a wacky alternative diet–why I’d want to avoid eating corpses.

James McWilliams got me thinking about this again this morning, when I read his “Bellying up to environmentalism” in the Washington Post for Nov. 16, 2009, where he noted that we should be asking questions in the reverse, that make meateaters feel uncomfortable at defending their own meateating.  After all, there’s really no good reason for eating meat other than that someone is so addicted to its taste that he or she  can’t exert the willpower to do without it.

The whys for not eating meat, on the other hand, are legion.  Let me just list a few here, from the mundane to the truly significant:

1. cooking is easier–throw veggies in a pot and steam them; throw veggies in a pot and make soup, throw veggies in a fry pan and fry them, throw beggies in a pot and bake them; and variants thereon

2. clean-up is a lot easier–none of that icky clinging greasy layer of animal fat on every pan

3. refrigerated leftover use is easier–throw the leftovers in a pot and steam them (etc. from one above) and there’s none of that congealed lard on top of the leftovers in the fridge

4. rotten vegetables in the fridge are less disgusting than rotten corpses in the fridge

5. a decent diet is generally considerably cheaper

6. the more people who adopt a vegetarian diet, the more people who are currently going hungry could be fed:  one of the many articles I’ve read said something that stuck with me (sorry, don’t have the cite)–that it takes the same resources to feed one meat-eater that it takes to feed about 80 vegetarians.  That’s because of the huge waste as you use up primary foodstuffs to feed the animals that will be slaughtered, then use up primary energy stuffs to slaughter, process, ship and deliver the meat to the meat eater, compared to even transported vegetables (localvore, with vegetables, is even more saving of resources)

7. without meat-eating, there are no  feedlots where animals literally eat and sleep out the remainder of their short lives in their own shit

8. you can have a small flock of hens who live out their natural lives with nice living conditions (indoor/outdoor)

  • disclosure: I had one hen who lived to be 22; she was still laying eggs up until the week or so before her death from natural causes

9. Hens lay bigger and bigger eggs each year that they live past the first year w(hen most are slaughtered) and they still lay fairly regularly

  • disclosure:  6 eggs every 7 days was typical in my experience

10. Even hens have personalities

  • disclosure:  when I lived in upstate New York, I had one named Gumption who loved to fly up to the top of a two-story house and survey her domain, and another named “kiss me” who would follow me around all day like a pet dog

11. Animals that we eat are as smart as–or smarter than–animals that we keep for pets (pigs compared to dogs, for example)

12. Animals care for their young and suffer when their young are taken from them (think dairy cattle and the young that are bred so that the mothers will give milk)

13. Some eating of animals is even more obnoxious than the norm (think “veal calves” that are taken and put in tiny sheds to they can fatten without any musculature development or “foie gras” where geese are fattened by having food stuffed down their throats with a tube)

14. Life is precious: there is no reason to sacrifice animal lives to lead a decent human life, so why do it?

15. Agribusiness–the main way that animals are raised and sold for meat–is an environmental nightmare

  • use of fertilizers to grow the grain that is fed to the cattle that are fed to the humans results in polluted land, water and air and uses up petroleum and other resources
  • consolidation results in long transportation (inhumane to animals; wasteful of oil and gas resources)
  • the subsidies (including some tax expenditures) for agriculture have gotten out of control–costly, misdirected, ill-conceived, and essentially now a form of corporate welfare for huge agribusiness enterprises

16. A meatless diet is healthier for humans than a meat-based diet, so we could cut health-care costs by simply cutting out meat

17. The process of butchering animals is a cruel leftover from the dark ages–people who work in slaughterhouses are inured to suffering, and that may well spill over into their “normal” lives outside work

18. The process of butchering animals is itself a source of harm–

  • sick animals are slaughtered, making it possible that eaters of that dead flesh will be sickened as well (mad cow disease);
  • animals are slaughtered in the midst of their own excrement, and some of that excrement gets into the food chain (making people sick as well);
  • the leftovers from the animal slaughter have to be gotten rid of somehow, leading to even more water, land and air pollution
  • workers are exposed to awful conditions–not just the process of mercilessly killing animals day in and day out, but also the risk of infection and injury on the line

19. The use of antibiotics in animal feed (given to healthy and unhealthy animals alike) ensures that resistant strains will develop even more rapidly, while leaving excess antibiotics not absorbed by the animals to pass out in their urine and excrement and into the land and water to act as toxins to others (including fish and birds and humans) leading to additional environmental nightmares…

20. Agribusiness pig farms and cattle feedlots are a blight on any humans within their vicinity (as well as a disaster for the natural world, noted above under environmental problems) from the stench of the manure (that can pollute the countryside for miles around) to the ugliness of the barren, treeless manure-laden fields.

So what to do?  Maybe we should enact an excise tax on all meat products, like a”sin” tax for sodas and sweets and cigarettes.   Comments, anyone?

I will be interested in checking her site after a week or so to see what others think in the comment section.

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First Time Homebuyer Credit extended into 2010

November 20th, 2009 No comments

First time homebuyers were rushing to find their first dream home in 2009, for those who thought they were running out of time – it has been extended into 2010.

The IRS webpage has posted some information outlining the details:

New Legislation

New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law:

  • Extends deadlines for purchasing and closing on a home.
  • Authorizes the credit for long-time homeowners buying a replacement principal residence.
  • Raises the income limitations for homeowners claiming the credit.

Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.

For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived  in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.

People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.

Several new restrictions apply to homes purchased after Nov. 6, 2009.

  • Purchasers must attach a properly executed settlement statement to their return.
  • No credit is available if the purchase price of the home exceeds $800,000.
  • The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
  • A dependent is not eligible for the credit.
  • The new law gives the IRS broader authority to deny first-time homebuyer credit claims, without having to first audit a taxpayer’s return. Known as math error authority, this authority applies, retroactively, to credits claimed on original and amended 2008 returns, as well as to claims yet to be filed.

Additionally, there are new benefits for members of the military and certain other federal employees:

  • Members of the uniformed services, members of the Foreign Service and employees of the intelligence community serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit.
  • In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community.

More information on these new benefits for the military, Foreign Service and intelligence community serving outside the U.S. is available.

General Information

Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit:

  • Applies only to homes used as a taxpayer’s principal residence.
  • Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
  • Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

The credit is claimed using Form 5405, which you file with your original or amended tax return.

For 2008 Home Purchases

The Housing and Economic Recovery Act of 2008 established a tax credit for first-time homebuyers that can be worth up to $7,500. For homes purchased in 2008, the credit is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning with the 2010 income tax year.

For 2009 Home Purchases

The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1. However, the new Worker, Homeownership and Business Assistance Act of 2009 has extended the deadline. Now, taxpayers who have a binding contract to purchase a home before May 1, 2010, are eligible for the credit. Buyers must close on the home before July 1, 2010. [Added Nov. 12, 2009]

For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer’s main residence within a three-year period following the purchase.

First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return. News release 2009-27 has more information on these options.

Don’t forget to talk to your tax preparer if you’ve made a home purchase in 2008 or 2009 and if you paid any contractors this year – Don’t forget to use our free 1099 Software.

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Tax Credits that Help Homeowners Winterize their Homes and Save Energy

November 18th, 2009 No comments

It seemed like just a few years ago “going green” was going to be a trend. Each day new reports educate all of us on the necessity of this initiative. It’s reassuring to see as time goes on, the government is doing it’s part to assist in the transition for a healthier environment. The Expanded Recovery Act includes two credits, the Nonbusiness Energy Property Credit and the Residential Energy Efficient Property Credit, that you may be able to take advantage of. The IRS website breaks down these two credits and how you can claim them for a variety of products.

IR-2009-98, Oct. 29, 2009

WASHINGTON — People can now weatherize their homes and be rewarded for their efforts. According to the Internal Revenue Service, homeowners making energy-saving improvements this fall can cut their winter heating bills and lower their 2009 tax bill as well.

The American Recovery and Reinvestment Act (Recovery Act), enacted earlier this year, expanded two home energy tax credits: the nonbusiness energy property credit and the residential energy efficient property credit.

Nonbusiness Energy Property Credit

This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count.

By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2009 federal income tax return. Due to limits based on tax liability, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result.

Residential Energy Efficient Property Credit

Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit, equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when calculating this credit.  Also, no cap exists on the amount of credit available except in the case of fuel cell property.

Not all energy-efficient improvements qualify for these tax credits. For that reason, homeowners should check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer’s website or with the product packaging. Normally, a homeowner can rely on this certification.  The IRS cautions that the manufacturer’s certification is different from the Department of Energy’s Energy Star label, and not all Energy Star labeled products qualify for the tax credits.

Eligible homeowners can claim both of these credits when they file their 2009 federal income tax return. Because these are credits, not deductions, they increase a taxpayer’s refund or reduce the tax he or she owes. An eligible taxpayer can claim these credits, regardless of whether he or she itemizes deductions on Schedule A. Use Form 5695, Residential Energy Credits, to figure and claim these credits. A draft version of this form is available now on IRS.gov.

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The Dutch Soon to be Taxed on a per-Kilometer-Driven Basis

November 17th, 2009 No comments

Many countries are doing their part to cut emissions and the amount of vehicles on the road. This is a very interesting article posted by Taxgirl – a frequent tax blogger on the internet.

Effective in 2012, Dutch drivers will be monitored by GPS and will pay taxes on a per-kilometers-driven basis. For the average passenger car, the rate will be about € 0.03 per kilometer (or roughly $.07 US per mile). Drivers of trucks, commercial vehicles and less fuel efficient cars will pay more. Public transit and cabs will be exempt from the tax.

Additionally, the cost will increase for drivers at peak times.

How will it work? GPS will track the time, hour and place each car moves and send the information to a billing agency. The billing agency will deduct the taxes directly from drivers’ accounts.

If it works as anticipated, the Dutch government estimates that traffic will drop by 15% – and rush hour traffic will drop by 50%. Minister of Transportation Camiel Eurlings believes that carbon emissions will be cut in half.

Interestingly, the law will abolish current road taxes and sales taxes for cars. The final numbers should work out so that 6 out of 10 drivers are better off under the new scheme and reportedly, tax revenue will remain the same.

According to the German newspaper, Deutsche Welle, the tax will increase every year until 2018.

The news has stirred interest in nearby Germany with top German automotive expert Ferdinand Dudenhoeffer saying that Germany should “take the progressive (Dutch) model as an example.” Interesting for sure. But there’s one or two (or three or four or five) obstacles: namely Audi, BMW, Mercedes, Porsche and Volkswagen. Long considered an automaker’s paradise, Germany tends to be known for heavier, more luxurious, power cars – not so much the cheaper, smaller more efficient cars encouraged under the Dutch scheme. With that in mind, in a tough economy, Germany is highly unlikely to adopt a policy which might negatively affect the car industry any time soon.

But that doesn’t mean that it’s not on the radar of other countries. Singapore already utilizes Electronic Road Pricing, a pay-per-use principle, and in the UK, there is a congestion charge for some drivers in the designated Congestion Charge Zone (CCZ). Which makes you wonder… Which country, if any, will be next?

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The American Recovery & Reinvestment Act of 2009 (ARRA) Provides Special Deductions for Car Purchases

November 17th, 2009 No comments

McKonly & Asbury posted some helpful resources to help you understand if you will qualify for special tax deductions for cars purchased in 2009.

With 2010 models arriving in dealer showrooms, the Internal Revenue Service is reminding taxpayers that purchasing a new car, light truck, motor home or motorcycle could qualify them for a special deduction for the state and local sales and excise taxes on their 2009 tax returns.

Purchases made before January 1, 2010, will qualify for this deduction under the American Recovery & Reinvestment Act of 2009 (ARRA).

The deduction is limited to the sales and excise taxes and similar fees paid on up to $49,500 of the purchase price of a new vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of Worksheet 10 in IRS Publication 919, How Do I Adjust My Withholding? Lines 10a to 10k of the worksheet show how to take into account purchases above the $49,500 limit, as well as the reduced deductions for taxpayers at higher income levels.

The special deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.

For those that have questions about the deduction for sales tax and other fees, these questions and answers might help. A video on the IRS Youtube.com channel and audio podcasts in English and Spanish are also available to help taxpayers take full advantage of the deduction.

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Take advantage of a Federal Tax Incentive for Environmental Clean Ups Through the End of 2009

November 11th, 2009 No comments

If you own a business that has had to have an environmental investigation or are cleaning up hazardous substances, you may not be aware of this incentive.

The Ohio Law Blog posted this article which breaks down the Federal Tax Incentive for you:

Any business spending money on an environmental investigation or on clean up at property they own examine closely a federal tax incentive which is set to expire December 31, 2009. The incentive allows environmental clean up costs to be fully deductible in the year they are incurred, rather than having to be capitalized and spread over a period of years.

Some businesses may not look closely at that tax incentive because they don’t think they own a “brownfield” property. Many conjure images of falling down and abandoned manufacturing buildings when they think of a brownfield. However, the incentive, known as the Federal Brownfields Tax Incentive, is very broad and inclusive as to what constitutes eligible properties. Properties in full productive use with contamination can be eligible.

Until 2000, the Federal Brownfield Tax Incentive did include restrictions on which properties could be eligible. The law included requirements on specific land use, geographic and contamination requirements for determining eligible properties. However, most of these limitations were removed in 2000.

Section 198 of the Internal Revenue Code contains the requirements for expensing environmental remediation costs. Section 198 defines “qualified contaminated site” as the following:

The term “qualified contaminated site” means any area-

(A) which is held by the taxpayer for use in a trade or business or for the production of income, or which is property described in section 1221(a)(1) in the hands of the taxpayer, and

(B) at or on which there has been a release (or threat of release) or disposal of any hazardous substance.

(Note: sites on the National Priorities List are excluded from eligibility)

The two requirements set forth in Section 198 are not very limiting, potentially allowing any property to be eligible that is held by a business upon which contamination is present. Any business looking to qualify their property as eligible must obtain a statement from the designated state agency (typically the State EPA where the property is located) that there has been a release, threat of release, or disposal of a a hazardous substance at or on the property.

Clean ups at former gas stations or those involving underground storage tanks containing gasoline now also potentially qualify. In 2006, the tax incentive was further expanded to include contamination from petroleum products (e.g., crude oil, crude oil condensates, and natural gasoline).

What types of expenses are deductible? Generally speaking, any expenses incurred in connection with abatement or control of hazardous substances, including:

  • Site assessment and investigation;
  • Site monitoring;
  • Clean up costs;
  • Operation and maintenance costs;
  • State voluntary cleanup program oversight fees; and
  • Removal of demolition debris

While the incentive was extended at least three times since 1997, it is set to expire on December 31, 2009. If the incentive provides advantages to your business it may make sense to consider managing your clean ups in the remaining months to maximize its benefits before it expires. Also, note that it is possible previously filed tax returns can be amended to include deductions for past clean up expenditures.

U.S. EPA has a very useful fact sheet and answers to frequently asked questions on their website that provide further guidance on the incentive.

[Disclaimer: You should consult your environmental counsel, CPA and tax counsel to determine whether your specific circumstances would qualify for the Federal Brownfield Tax Incentive]

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IRS will host Webinar for Tax Professionals to Detail Benefits of E-File on November 18

November 11th, 2009 No comments

We are excited to see the IRS posting information that will assist Tax Professionals with making the transition from paper to E-File. Download our 1099 software to get started.

IR-2009-103, Nov. 10, 2009

WASHINGTON — Tax professionals can hear first hand from their colleagues and e-mail questions to the Internal Revenue Service about the benefits of IRS e-file during a free Nov. 18 webinar, “E-file: Building the Case, A Panel Discussion with Tax Professionals.”

The hour-long program, hosted by the IRS, will air three times on Nov. 18. Tax professionals must register by Nov. 17 for one of three session times: 10 a.m., 1 p.m. or 4 p.m. EST.

The webinar is part of an ongoing IRS effort to encourage tax preparers to use e-file for all their clients’ tax return transmissions.

John Myett, an IRS subject matter expert in electronic interactions, will discuss what the IRS is doing to improve the e-filing experience for tax professionals and their clients.

A panel comprising representatives from national practitioner organizations will respond to questions. Kim Lawson, an IRS analyst, will moderate the event.

Participants include:

  • James Adelman, National Association of Enrolled Agents
  • Larry Gray, National Association of Tax Professionals
  • Joe Marchbein, American Institute of Certified Public Accountants

The IRS will collect e-mailed questions from viewers who submit them during each Nov. 18 show, and will post the consolidated questions and answers to IRS.gov at a later date. The program’s archived version will also be posted to the Web site. Certificates of Completion are available to those who need them for Continuing Professional Education credit.

For more details, visit IRS.gov and Search National Phone Forums and Webinars or register now using your e-mail address. You will need a high-speed Internet connection to view the webinar, and speakers for the audio.

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PCI compliance, not just a problem for big business anymore.

November 1st, 2009 No comments

For any organization that hasn’t heard of PCI compliance, it’s time to get aware. A lack of understanding could cost you your business, literally.

PCI compliance specifications and guidelines outline a well crafted suite of recommendations and requirements for operating your infrastructure around the card holder environment. Even if PCI wasn’t a requirement, implementing these technologies and guidelines would form a good basis for safe enterprise computing for any company.

Merchant911.org shares some notes on recent mandates by Visa and crew:

It doesn’t get any simpler than this, dear reader. By October 2010 any merchant that is not PCI compliant will be de-certified and must stop accepting cards.

I told you it was coming and now, according to an article in ecommerceguide.com it’s here. Starting next month there will be a year-long effort by processors to de-certify (essentially close down) any Level 4 merchants that are not PCI compliant. Level 4 Merchants are defined as those with fewer than 20,000 Visa transactions, and fewer than 1,000,000 total transactions per year. Most small vendors will fall into this category.

This will have far-reaching effects on a significant portion of on-line business as we know it. Any on-line store that processes cards on their own site will feel a major impact. For example, if you have an online store with on-site processing that is hosted in an inexpensive shared or “virtual” hosting environment you will not be able to pass PCI standards.

And I would remind you that ALL merchants who accept credit cards must be PCI compliant. It doesn’t matter if you do business on-line, by phone or mail, or in person. The steps you need to take towards compliance are different but if you accept credit cards you must be compliant. I’ll say that again. If you accept credit cards you must be PCI compliant. And you will be compliant by October of 2010 or you will no longer be able to accept credit cards as a form of payment. It’s not an option.

I can’t make it any plainer than that. As a merchant, it’s PCI compliance or die. As a merchant advocate I have mixed feelings on this. I’d venture to say that most Merchant911.org members know how to protect themselves from fraudulent transactions but that doesn’t mean that they shouldn’t protect their customers and other merchants from being victims. On the other hand, the concept of a huge volume of paperwork and quarterly scans at $99 a year is going to put a significant number of small merchants out of business. That’s sad.

Source: http://www.merchant911.org/blog/index.php/2009/09/02/pci-compliance-do-it-or-cease-doing-business/
More information on PCI compliance can be found at: https://www.pcisecuritystandards.org/

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Take heed as your business is now required to watch for warning signs of identity theft.

November 1st, 2009 No comments

Accountingweb has a great posting on some recent updates to the FACTA act, that you should be aware of:

Business owners take heed. A November 1 update to FACTA (the Fair and Accurate Credit Transactions Act of 2003) requires businesses to implement a written policy that monitors the business for “Red Flag” warning signs for identity theft. The policy must also specify how the business will respond to the crime if discovered.
The Red Flag rules have been on the books for years, and lawyers, health care practices, and small business owners have been fighting the changes to the law. In fact, the new deadline is only the latest deadline for the rule that was first introduced in April 2008. The initial deadline was set for November 1st, 2008 and subsequently moved to April 1st, 2009 and then finally November 1st, 2009.

The Red Flag Rule covers “financial institutions” and “creditors.” It is this second group that almost every business falls into. Any business that doesn’t collect payment in full at time of service is considered a “creditor.” This includes doctors, lawyers, accountants, designers, phone companies, or anyone else who offers payment terms.

“Most businesses understand that they need to protect information through security and paper shredding programs,” says Steven Hastert, president of Shred Nations, an expert in identity protection issues. “But even though this new law has been posted for more than a year, few businesses are aware of the scope of these changes.”

The American Bar Association (ABA) and American Medical Association (AMA) have been vocal critics about being covered by the rule. They have a last ditch effort with H.R 3763 to prevent being covered. The bill has passed the House on October 26th and is headed for the Senate. This proposed legislation exempts businesses under 20 employees from the changes.

The Red Flag Rule requires businesses to install four components:

1)   Reasonable policies and procedures must be in place to identify suspicious patterns or practices in day-to-day operations. This activity indicates possible identity theft.

2)   The program should also detect identified red flags for the business. For example, obvious fake identification.

3)   The program should have procedures to take when a red flag is identified.

4)   There must also be having a system in place to re-evaluate the program as threats change.

These new requirements are just part of a good information security program. Hastert reminds businesses to remember the basic steps they need to take. These include locking file cabinets, not giving information over the phone and shredding everything with personal information on it.

Source:  http://www.accountingweb.com/topic/cfo/businesses-now-required-monitor-warning-signs-identity-theft
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