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Posts tagged "tax changes"

Updates to California Tax Return Filing

The California Franchise Tax Board (FTB) has updated certain aspects of tax return filing starting with returns for tax year 2017. The standard deduction for taxpayers filing as single increased to $4,236; for taxpayers who are married filing jointly, the new standard deduction is $8,472. Personal exemptions were also raised to $114 and $228, respectively.

IRS and FTB Power of Attorney Forms Have Changed

If you are a tax professional, take note of recent changes that the Internal Revenue Service (IRS) and California Franchise Tax Board (FTB) have made to their power of attorney forms that may affect your ability to access client information.  The IRS form, found here, has expanded section 5a to include a box you must check if you have intermediaries access client transcripts for you.  The FTB has completely rehauled its power of attorney form system --- there is a new form to use for individuals, a separate form for business entities, and a third form to use when you want to revoke your power of attorney. To learn more about the various the changes to the FTB forms, click here.

Senate Committee on Finance Requests Comments On Taxation

United States Senate Committee on Finance Chairman Orrin G. Hatch recently issued a request to experts and stakeholders for comments and recommendations to improve the federal tax system. The committee is specifically seeking ideas about how to provide tax relief to the middle class; how to strengthen businesses of all sizes through the tax system; how to encourage savings and investment and remove tax-related obstacles to such; and how to update the international tax system to stay competitive in the global economy.

White House Proposes Major Revisions to Federal Tax Law

The last comprehensive revision of the Internal Revenue Code occurred in 1986, when Congress passed the Tax Reform Act of 1986. On April 26, 2017, with less than one page of writing, President Trump has summarized his Tax Reform Plan, which promises to reduce tax brackets, simplify the tax code, create millions of job, and protect a variety of deductions. Included in the plan are the following proposed changes:

IRS Updates Offer in Compromise Policy

The Internal Revenue Service (IRS) will now return without consideration any Offer in Compromise applications submitted by taxpayers who have not filed all required tax returns. The application fee will be returned to the taxpayer, but any initial payment submitted with the returned application will be applied to outstanding tax debt. An updated Offer in Compromise Booklet (Form 656-B) reflecting this policy change will be available March 27, 2017 here.

California Wants Teachers, Proposes State Income Tax Exemption to Keep Them

California Senate Bill No. 807, introduced February 17, 2017, proposes various tax credits and exemptions aimed at attracting and retaining educators. Legislators hope to offer qualifying taxpayers a credit against their net tax equal to qualified costs paid or incurred in a given year to earn a full teaching credential. Taxpayers who have taught in a classroom for at least five years would be exempt from paying state taxes on that income.

Number of Awards to Whistleblowers Quadruples

The IRS receives confidential information daily from what we in the profession call "The X Factor" - ex-spouses, ex-employees, ex-friends. These are people with whom you may have confided your tax shenanigans, who are sore, and turn you in to the IRS. Those who are bold enough to attach their names to the complaint may receive a reward if the IRS is able to collect taxes based on the information disclosed.

Significant Changes to IRS Partnership Audit Rules

On November 2, 2015, the Bipartisan Budget Act of 2015 was signed into law, the text of which can be found here. Among the provisions related to tax compliance, the Act imposes significant changes to the manner in which the IRS will determine audit adjustments related to partnerships.

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