Tax Law Blog

Bloomberg BNA reports that the IRS is expected to announce proposed regulations for the full expensing provision under Code Section 168(k) sometime late-June or early-July.

VCP is a program offered by the IRS to allow sponsors of qualified retirement plans (401(k)/ 403(b) plans) to correct retirement plan errors. An applicant must disclose the mistake in writing and then correct the failure and pay a fee.

One of the biggest questions after the passage of tax reform is whether business owners should convert their pass-through entities to C Corporations to take advantage of the lower 21% tax rate.  The answer to this question depends on your business goals. If your goal is to pass as much profit to yourself as possible, you should generally stick with the pass-through entity.

The general rule is that the IRS has three years from the return's filing or due date, whichever is later, to audit a taxpayer. However, this rule is subject to several exceptions.

The Senate is anticipated to vote on its own tax reform bill in the near future. 

Each year a variety of items in the Internal Revenue Code are updated based on inflation, specifically the consumer price index.

The Internal Revenue Service recently released the 2018 cost-of-living adjusted amounts related to health savings account (“HSA”) contribution limits, out-of-pocket maximums and high deductible health plan (“HDHP”) deductibles. Each of the cost-of-living adjusted amounts is set forth below.

You may remember that in July 2015, Governor Snyder signed legislation bringing to an end Michigan’s controversial film incentive program. Another incentive program for film investors - this one embedded in the federal tax code - recently expired by its own terms on December 31st.

This week, the IRS announced that it has selected four private debt collection contractors to begin collecting certain overdue federal tax debts, as required by Congress. The contractors include:

• CBE Group
  1309 Technology Pkwy
  Cedar Falls, IA 50613
• Conserve
  200 CrossKeys Office park
  Fairport, NY 14450
• Performant
  333 N Canyons Pkwy
  Livermore, CA 94551
• Pioneer
  325 Daniel Zenker Dr
  Horseheads, NY 14845

The contractors' efforts will begin in the spring of 2017, and will be focused only on debts that the IRS had stopped trying to collect.  We note three important takeaways in the wake of this news.

Some businesses are (unpleasantly) surprised when they learn they are responsible for taxes -such as sales and income taxes - in states in which they have no physical presence. What gives rise to liability in these situations is “economic nexus,” which relates to a business’ activity, such as the generation of sales without a physical presence, in a state. Nexus, therefore, can be a hidden trap for businesses with multistate sales and other activities, particularly because what gives rise to nexus is often uncertain and unexplained by a state’s taxing authority.

Michigan Department of Treasury (the “Treasury”) has shed light on what constitutes nexus in Michigan through the issuance of a release that explains the nexus standards for Michigan business taxes. The release (the “Release”) addresses the sales and use tax presumption for out-of-state sellers; the nexus standards for the corporate income tax; and the nexus standards for flow-through entity withholding.