7/18/2017. The Scoop. Agenda. EA Special Enrollment Exam Fee Increase

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1 The Scoop July 5, 2017 Agenda EIN application restrictions online Notice burdensome regulations PTIN update IRS Funding H.R. 1843, the Restraining Excessive Seizure of Property State News Ohio, Minnesota, South Dakota Minnesota Federal Conformity Update Missouri Disaster Declaration ACA Reform Where Are We Now? 2 EA Special Enrollment Exam Fee Increase The IRS has issued final regulations (T.D. 9820) that increase the IRS user fee to $81 for each part of the three part enrolled agent special enrollment examination, effective for examinees who register after February 28, 2018 Effective August 18, 2017, the final regulation are adopted 3 1

2 Multi Member Limited Liability Companies EIN Application Issues Online Multi member limited liability companies must not select "Partnership" as the type of entity they are establishing Doing so will not allow an LLC suffix to be added to the primary name line Select "Limited Liability Company" as the type of entity they are establishing This will allow an LLC suffix to be entered and the appropriate filing requirement(s) to be established 4 Multi Member Limited Liability Companies EIN Application Issues Online Can be used by all entities as long as the responsible party has a valid TIN, and the entity's principal location is in the United States or U.S. Territories EXCEPTION: If the applicant lists a BMF entity as the responsible party and the EIN of that entity was obtained online; i.e., EIN prefix 20, 26, 27, 45, 46, 47, 81 and 82, the new business cannot use online EIN requests meeting this criteria must be submitted by fax or mail 5 Multi Member Limited Liability Companies EIN Application Issues Online This information is provided to applicants on the IRS.gov webpage titled: Apply for an Employer Identification Number (EIN) Online For example, a corporation lists another BMF entity as the responsible party, and that responsible party's EIN begins with 20, 26, etc., then the corporation must submit their EIN request by fax or mail 6 2

3 Notice Treasury Department has identified eight as burdensome regulations, for which it will propose reforms as required by Executive Order Proposed regulations under 103 on the definition of political subdivision (REG ); Temporary regulations under 337(d) on certain transfers of property to regulated investment companies (RICs) and real estate investment trusts (REITs) (T.D. 9770); Final regulations under 7602 on the participation of a person described in 6103(n) in a summons interview (T.D. 9778) 7 Notice Proposed regulations under 2704 on restrictions on liquidation of an interest for estate, gift, and generation skipping transfer taxes (REG ); Temporary regulations under 752 on liabilities recognized as recourse partnership liabilities (T.D. 9788); Final and temporary regulations under 385 on the treatment of certain interests in corporations as stock or indebtedness (T.D. 9790); Final regulations under 987 on income and currency gain or loss with respect to a 987 qualified business unit (T.D. 9794); and Final regulations under 367 on the treatment of certain transfers of property to foreign corporations (T.D. 9803) 8 PTIN Update IRS is permanently enjoined from charging fees for a Preparer Tax Identification Number (PTIN) IRS to make a full refund of all PTIN fees Sept. 1, 2010 to the present IRS is to make payment of the refunds to the claims administrator selected by the plaintiffs' counsel promptly after the expiration of the period for appeal We are still awaiting to see if IRS appeals the decision The claims administrator is directed to process the individual refunds, less the share of any attorneys' fees and costs to class members within 60 days of the final determination 9 3

4 IRS Funding Getting Worse On July 13, the House Appropriations Committee, by a vote of 31 21, approved the fiscal year 2018 Financial Services and General Government Appropriations bill, The bill would total $ billion $1.284 billion below the fiscal year 2017 enacted level and $2.483 billion below the President's budget request Bill would fund IRS below the 2008 level Funding for the IRS would be cut by $149 million from the fiscal year 2017 enacted level Thomson Reuters Checkpoint 10 H.R. 1843, the Restraining Excessive Seizure of Property Through the Exploitation of Civil Asset Forfeiture Tools Act (or called the Clyde Hirsch Sowers RESPECT Act) This bill revises the authority and procedures that the Internal Revenue Service (IRS) uses to seize property that has been structured to avoid Bank Secrecy Act (BSA) reporting requirements The IRS may only seize property it suspects has been structured to avoid BSA reporting requirements if the property was derived from an illegal source or the funds were structured for the purpose of concealing the violation of a criminal law or regulation other than structuring transactions to evade BSA reporting requirements 11 H.R. 1843, the Restraining Excessive Seizure of Property Through the Exploitation of Civil Asset Forfeiture Tools Act (or called the Clyde Hirsch Sowers RESPECT Act) Within 30 days of seizing property, the IRS must: (1) make a good faith effort to find all owners of the property, and (2) notify the owners of the post seizure hearing rights established by this bill The IRS may apply to a court for one 30 day extension of the notice requirement if it can establish probable cause of an imminent threat to national security or personal safety 12 4

5 H.R. 1843, the Restraining Excessive Seizure of Property Through the Exploitation of Civil Asset Forfeiture Tools Act (or called the Clyde Hirsch Sowers RESPECT Act) If the owner of the property requests a court hearing within 30 days after the date on which notice is provided, the property must be returned unless the court holds a hearing within 30 days after notice is provided and finds that there is probable cause to believe that the property was derived from an illegal source or the funds were structured to conceal the violation of a criminal law or regulation other than a structuring violation The bill amends the Internal Revenue Code to exclude from gross income any interest received from the federal government with respect to an action to recover property seized by the IRS pursuant to a claimed violation of the structuring provisions of the BSA 13 State Information 14 South Dakota Tax Facts No. 07/01/2017(Agriculture Machinery Attachment Units and Irrigation Equipment /PDFs/Tax%20Facts/Ag%20Equipment.pdf 15 5

6 Ohio Tax Department Starting June 27th, the Ohio Department of Taxation will be ing taxpayers who have not paid in full their 2016 Ohio individual and/or school district income tax liability that was reported on their filed return(s) (Ohio IT 1040 and SD 100) The advises the taxpayer on how to appropriately respond to this notice tax.ohio.gov Tax Credit Expiring Soon for Military Members Minnesota If the taxpayer served in a military combat zone in 2013, they could be eligible for a refundable Minnesota tax credit worth $120 for each month of service in a combat zone Must file by October 15, 2017 The taxpayer must meet all of the following requirements to qualify: The home of record was Minnesota during the months of service They served in a combat zone or qualified hazardous duty area anytime in 2013 They received combat pay, which is exempt from federal 17 income tax 2013 Tax Credit Expiring Soon for Military Members Minnesota How much is the credit? The 2013 credit is $120 for each month of service in a combat zone or qualified hazardous duty area To find out more about locations that qualify for the tax credit, visit the IRS website Partial months count, so even if they only served one day in a month, they get credit for that full month 18 6

7 2013 Tax Credit Expiring Soon for Military Members Minnesota How do I claim the credit? File the 2013 Form M99, Credit for Military Service in a Combat Zone Include one of the following documents depending on the service status: National Guard, Reservists, and Retired or Discharged Active Duty Members: Attach a copy of the Form DD 214 for each period of qualifying service Active Duty Members: Attach a copy of the Leave and Earnings Statement for each month of qualifying service Tax Credit Expiring Soon for Military Members Minnesota Can the taxpayer claim the credit for other years? Tax credits for service in a combat zone are also available for 2014, 2015, and To apply for those credits, file Form M99 for the appropriate year and include the required documents Where can I find more information? You can get information on additional military tax credits available by visiting the Members of the Military page on the Minnesota Department of Revenue website For questions, call the income tax assistance line at or (toll free) 20 Minnesota Update on Federal Conformity Earlier in 2017, lawmakers passed legislation to match the federal code in several areas for tax years 2015 and 2016 Update on progress 2015 Tax Returns We recently started reviewing all 2015 Minnesota income tax returns If a taxpayer was affected by changes made to the 2015 tax code, there is nothing they need to do unless the department notifies them If a taxpayer qualifies for a new deduction or exclusion, one of three things will happen after the review: 21 7

8 Minnesota Update on Federal Conformity 1. We will make the necessary change to the return, if possible We will send the taxpayer a letter explaining the changes and issue a refund 2. We will request (via letter) more information from the taxpayer We will use that information to make changes to the taxpayer s return, if possible We send the taxpayer a letter explaining the changes and issue a refund 22 Minnesota Update on Federal Conformity 3. If we cannot make changes to the return, we will notify the taxpayer that they need to file an amended return to get the benefits of these tax law changes Do not amend a taxpayer s return for these new deductions or exclusions unless we notify the taxpayer via letter The taxpayer may decide to amend their return for other reasons No taxpayers will owe additional tax because of these changes We will send another update when we have completed the 2015 federal conformity adjustments 23 Minnesota Update on Federal Conformity 2016 Tax Returns All necessary changes were made to 2016 income tax forms and instructions before the filing season opened No adjustments to these returns are needed Questions? If you have any questions, contact us by at individual.incometax@state.mn.us or by phone at or (toll free) 24 8

9 Missouri Disaster Relief A new FEMA Disaster Recovery Center opens Tuesday, July 18, in Crawford County The recovery center offers in person support to individuals and businesses in any of the 35 counties included in the Missouri federal disaster declaration for flooding and severe storms that occurred between April 28 and May 11, center opens crawfordcounty help missouri flood survivors 25 Disaster Relief for Missouri 26 Designated Counties Individual Assistance Bollinger, Butler, Carter, Christian, Crawford, Dent, Douglas, Dunklin, Franklin, Gasconade, Greene, Howell, Iron, Jasper, Jefferson, Madison, Maries, McDonald, Newton, Oregon, Osage, Ozark, Pemiscot, Phelps, Pulaski, Reynolds, Ripley, Shannon, St. Louis, Ste. Genevieve, Stone, Taney, Texas, Wayne, Wright 27 9

10 Where Are We With ACA Reform Revised Analysis Handout 28 The Scoop Upcoming Dates August 2 August16 August 30 September 13 October 4 October 18 November 1 Held at 8:00 am and 12:00 pm Central time 29 Up Coming Webinars node field seminardate/month Tax Basis for Farmers July 24 Reconstructing Records for Tax Compliance August 17 Uber/Lyft Drivers and Business Expenses August 22 Tax Reform and New Law Update October 17 New Partnership Audit Rules October

11 Upcoming Seminars Mark Your Calendar Final Dates S Corporation July 20 21, 2017, Live and Webinar September 21, 2017 Ag Law Seminar, Live and Webinar September 22, 2017 Farm and Estate Tax Review, Live and Webinar Retirement and Social Security Issues(Webinar) = October 10 11, The Schedule is Finalized for the 44th Annual Federal Income Tax Schools November 2 3, 2017 Maquoketa, Iowa Centerstone Inn and Suites November 6 7, 2017 Le Mars, Iowa Le Mars Convention Center November 8 9, 2017 Atlantic, Iowa Cass County Community Center November 9 10, 2017 Mason City, Iowa North Iowa Area Community College November 16 17, 2017 Ottumwa, Iowa Indian Hills Community College November 20 21, 2017 Waterloo, Iowa Hawkeye Community College December 11 12, 2017 Ames, Iowa and Live Webinar Quality Inn and Suites The CALT Staff William Edwards Interim Director for the Beginning Farmer Center Interim Director for the Center for Agricultural Law and Taxation wedwards@iastate.edu Heady 518 Farm House Ln Ames. Iowa Kristine A. Tidgren Assistant Director E mail: ktidgren@iastate.edu Phone: (515) Fax: (515)

12 The CALT Staff Kristy S. Maitre Tax Specialist E mail: ksmaitre@iastate.edu Phone: (515) Fax: (515) Tiffany L. Kayser Program Administrator E mail: tlkayser@iastate.edu Phone: (515) Fax: (515)