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The IRS Issue Resolution Program is looking for more tax issue submissions that relate to business taxpayers. The IIR program by the IRS helps to resolve business tax issues that are common problems. Through the submission of tax issues, the IRS IIR program has offered tax assistance to help alleviate those problems.

Once an issue is received, the IRS will gather a team of experts to meet about how to approach a solution for the issue. The team will gather as many different resources available to come to an educated consensus on the type of guidance that may be used to resolve the issue.

The IRS says that recommendations can be submitted to IIR@irs.gov and that they are reviewed semi-annually. The next decisions will be made on Sept. 30 2010 and the IRS details more about this in its latest newsletter:

WASHINGTON — The Internal Revenue Service is encouraging business taxpayers, associations and other interested parties to submit to the Industry Issue Resolution (IIR) program tax issues for resolution involving a controversy, a dispute or an unnecessary burden on business taxpayers.

The objective of the IIR program is to resolve business tax issues common to significant numbers of taxpayers through new and improved guidance. In past years, issues have been submitted by associations and others representing both small and large business taxpayers, resulting in tax guidance that helps thousands of taxpayers.

Recent submissions accepted into the IIR program include:

* Network assets in the telecommunications industry (unit of property)
* Asset class determination under Revenue Procedure 87-56 for wireless telecommunication assets
* Vendor mark down allowances in calculation of inventory under the retail inventory method
* Network assets in the utilities industry (unit of property)

Guidance issued as a result of the IIR program includes:

* Technical terminations of publicly traded partnerships – procedures for requesting relief, delegation of authority for granting relief, and a sample closing agreement documenting the conditions under which relief is granted. (Industry Director Communication LMSB-04-0210-006)
* Auto Last In First Out – for automobile wholesalers, manufacturers and dealers regarding the proper treatment of the dollar-value, LIFO inventory method for pooling purposes of crossover vehicles, which have characteristics of trucks and cars. (Revenue Procedure 2008-33)

For each issue selected, an IIR team of IRS and Treasury personnel gather relevant facts from taxpayers or other interested parties affected by the issue. The goal is to recommend guidance to resolve the issue. This benefits both taxpayers and the IRS by saving time and expense that would otherwise be expended on resolving the issue through audits.

IIR project selections are based on the criteria set forth in Revenue Procedure 2003-36. For each issue selected, a multi-functional team of IRS, Chief Counsel, and Treasury personnel will be assembled. The teams will gather and analyze the relevant facts from industry groups and taxpayers for each issue and recommend guidance.

Requests for guidance on tax issues under the IIR program can be submitted at any time to IIR@irs.gov. Submissions received are reviewed semi-annually with selections next being made from issues submitted by September 30, 2010.

IRS Commissioner Doug Shulman announced that the IRS would be extended the deadline for small non-profit organizations to maintain their tax exempt status. Form 990-N or Form 990-EZ are used to file for the deadline extension. The commissioner noted that the IRS believes it is important for these organizations to maintain their status, and this is why the deadline extension was being offered.

Another reason that this tax relief is being offered is because there was legislation passed in 2006 that required all non-church tax-exempt organizations to file annual returns with the IRS. Many small organizations have not maintained their compliance with the filing requirement since the passage of the new law, and thus the IRS is now offering an extension for those organizations to help them get into compliance. More details are discussed in the release by Commissioner Doug Shulman:

Today, we’re announcing relief for small nonprofit organizations who are at risk of losing their tax-exempt status because they have missed or are about to miss the deadline for filing Form 990-N or Form 990-EZ with IRS. We believe it’s important to give these organizations an opportunity to preserve their valuable tax exemption.

Here’s why relief is needed: Back in 2006, Congress passed legislation mandating that all tax-exempt organizations, except churches and church-related groups, file annual returns with the IRS starting in 2007. This meant that very small organizations that had never filed before would have to start doing so.

This law also said that any organization failing to file for three consecutive years would automatically lose its federal tax-exempt status. So the IRS spent the past three years conducting an extensive and unprecedented outreach effort to alert very small organizations to their new filing responsibility. Among the examples, we have sent over 1 million letters to small nonprofit organizations alerting them about the filing requirement since the law was passed. But even with that effort, we found when we got to May 17, the first date that would trigger the three-year rule, we found that many organizations still had not filed a return.

So here is what we’re doing: We’re offering a two-part program to bring small organizations back into compliance. First, we’re extending the filing deadline to Oct. 15 for the smallest organizations, those with gross receipts of $25,000 or less. These are the groups that have to file the Form 990-N, the e-postcard. It’s very simple. All they need to do is provide eight information items. If an organization goes to our Web site, IRS.gov, supplies those eight items, and files electronically by Oct. 15, it will be back in compliance and its tax-exempt status will be intact.

We’re also offering relief for somewhat larger organizations, which are eligible to file the Form 990-EZ. For these groups, we’re launching a voluntary compliance program. Under this program, you file your three delinquent returns and pay a small fee. As long as you file by Oct. 15, you won’t lose your tax exemption. I should note that none of this relief is open to larger organizations that have to file the Form 990 or to private foundations that file Form 990-PF.

To help these small organizations, today we’re posting a lot of useful material on our website. This includes a list of names and last-known addresses of at-risk organizations, along with guidance about how to come back into compliance. The organizations on the list have return due dates from May 17 through Oct. 15, 2010, but the IRS has no record they filed their required returns.

It’s really important for small charities to pay attention to this announcement. These groups do great work in communities across the United States and are vital to the vibrancy of our nation. The last thing we want to do here at the IRS is have these groups lose their tax-exempt status because they haven’t filed a short, simple form. So we urge these small groups to take a minute and make sure they’ve filed. It’s a very easy, quick process to file, and we decided to extend the deadline to offer this relief to help these groups out. It’s easier to file now than to lose their tax-exempt status and face going back and reapplying.

Our message is simple: If you don’t have your filings up to date, now is the time to take action and get back in compliance. We’re taking these steps today to go the extra mile and help small tax-exempt groups.

The Taxpayer Advocate Service is an independent organization within the IRS. It helps taxpayers that have economic difficulties with housing, transportation and food. The service is also available to those who do not believe that the an IRS system or procedure is not operating as it should. It is a source of taxpayer guidance and it takes a variety of taxpayer complaints. Essentially it is the voice of the consumer at the IRS. Here is some more information about the Taxpayer Advocate Service as described by the IRS:

The Taxpayer Advocate Service is an independent organization within the Internal Revenue Service. TAS helps taxpayers who are experiencing economic harm such as not being able to provide necessities like housing, transportation, or food, taxpayers who are seeking help in resolving problems with the IRS, and those who believe an IRS system or procedure is not working as it should. Here are seven things every taxpayer should know about TAS.

1. The Taxpayer Advocate Service is your voice at the IRS.
2. TAS service is free, confidential, and tailored to meet your needs.
3. You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn’t working as it should.
4. TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals.
5. TAS employees know the IRS and how to navigate it. If you qualify for TAS help, your case will be assigned to an advocate who will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved.
6. There is at least one local taxpayer advocate office in every state, the District of Columbia, and Puerto Rico. You can call your local advocate, whose number is in your phone book, in Pub. 1546, Taxpayer Advocate Service — Your Voice at the IRS, and on the website at www.irs.gov/advocate. You can also call toll-free number at 1-877-777-4778 or TTY/TDD 1-800-829-4059
7. You can learn about your rights and responsibilities as a taxpayer by visiting the TAS online tax toolkit at www.taxtoolkit.irs.gov. You can get updates on hot tax topics by visiting the TAS YouTube channel at www.youtube.com/tasnta and the TAS Facebook page at http://www.facebook.com/YourVoiceAtIRS, or by following TAS tweets at http://twitter.com/YourVoiceatIRS.

As more individuals and businesses are starting rely upon electronic return filing and computer software to assist with preparing electronic tax and information returns, there are issues that must be properly managed and administered by the IRS to facilitate this transition.

The Electronic Tax Administration Advisory Committee (ETAAC) is a division of the IRS that advises the IRS on how to best oversee this transition. The ETAAC also provides feedback on the IRS’s electronic tax administration policies.

The ETAAC recently presented their annual report to congress. The report suggested that the IRS should continue to encourage electronic filing of tax returns.

The committee also suggested that the IRS continue to update their systems. More information is detailed in the full briefing:

WASHINGTON — The Electronic Tax Administration Advisory Committee (ETAAC) this month presented its 2010 Annual Report to Congress. The ETAAC provides feedback on the development and implementation of the Internal Revenue Service’s electronic tax administration strategy.

The report includes recommendations to further expand the use of electronic filing. The report recommends the IRS use a three-year phase-in approach to successfully implement the tax preparer requirement to electronically file individual tax returns. The report also calls for continued funding and completion of the modernization of IRS systems as well as collaboration between the IRS and industry regarding tax software standards and the implementation of the return preparer regulations.

“ETAAC plays a significant role in IRS efforts to improve the taxpayer’s experience via e-file and the Internet,” said David Williams, director of Electronic Tax Administration. “The IRS appreciates ETAAC’s recommendations, which we will consider as we plan our strategy for electronic tax administration.”

The 13-member panel provides an organized public forum for discussion of electronic tax administration issues and the overriding goal that paperless filing should be the preferred and most-convenient method of filing tax and information returns.

“ETAAC believes a fully e-enabled IRS is critical to meeting the overarching e-file goal and enhancing tax administration,” said Phil Poirier, ETAAC Chairman.

ETAAC submits an annual progress report to Congress each June. The IRS Electronic Tax Administration created the ETAAC in 1998 as required by the IRS Restructuring and Reform Act of 1998. The report is the result of research and analysis as well as meetings with senior IRS executives.

Public comments on the report may be sent to etaac@irs.gov .

The IRS announced today that they would be extending the deadline for defined contribution retirement plan sponsors that were affected by flooding, storms, or other natural disasters in several states. The IRS is extending the deadline to July 30, 2010 and the normal deadline was April 30, 2010 for those who qualify. The IRS briefing explains how qualification for the extended deadline works in more detail:

WASHINGTON — The Internal Revenue Service is providing administrative relief for sponsors of defined contribution plans, such as section 401(k) plans, that were affected by the storms and other severe weather in those counties in Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia declared Presidential Disaster Areas during the period from March 1 through May 31, 2010.

Notice 2010-48 administratively extends to July 30, 2010, the April 30 deadline for restating affected pre-approved defined contribution plans and, if applicable, for submitting determination letters to the IRS, to July 30, 2010. The section 401(b) remedial amendment period for these retirement plans is also extended to July 30.
The relief provided by this notice is in addition to the statutory relief already provided by the IRS, under section 7508A of the Internal Revenue Code, to taxpayers affected by the federally declared disasters in these eight states during the period from March through May 2010.

The notice details the scope of the relief provided by this administrative action and further defines the conditions under which a plan qualifies as an affected plan. A plan is an “affected plan” only if any of the following locations relating to the plan were in the federally declared disaster areas at the time of the disasters:

1. The principal place of business of the employer that maintains the plan;
2. The principal place of business of the employer that employs more than 50 percent of the active participants covered by the plan;
3. The office of the plan or the plan administrator;
4. The office of the primary record keeper serving the plan; or
5. The office of any advisor that had been retained by the plan or the employer at the time of the storms or other severe weather that is directly involved with the adoption of the plan or the submission of a determination letter application to the IRS.

In addition, the IRS gave information on what types of disasters qualify for the administrative relief:

This relief applies to the following disaster situations:

Connecticut victims of March 2010 severe storms and flooding. See, News Release CT-2010-35, June 1, 2010.

Tennessee victims of April-May 2010 severe storms and flooding. See, News Release AL/TN-2010-56T, May 5, 2010.

Alabama victims of April 2010 severe storms and flooding. See, News Release AL/TN-2010-55A, May 4, 2010.

Mississippi victims of April 2010 severe storms, tornadoes and flooding. See, News Release LA/MS-2010-21, April 30, 2010.

New Jersey victims of March 2010 storms and flooding. See, News Release NJ-2010-32, April 5, 2010.

Massachusetts victims of March storms and flooding. See, News Release MA-2010-15, March 31, 2010.

Rhode Island victims of March storms and flooding. See, News Release RI-2010-11, March 31, 2010.

West Virginia victims of March storms and flooding. See, News Release WVA-2010-12, March 31, 2010.

The recently signed Hiring Incentives to Restore Employment Act that was signed by President Obama on March 18th allows for payroll tax incentives and exemptions for certain employers. For new workers hired in 2010, the IRS is allowing for a number of payroll tax incentives including a 6.2 percent payroll incentive and also a new hire retention credit of up to $1,000 per employee. The details of each incentive are described more in the recent IRS News release:

May 18, 2010

WASHINGTON — The Internal Revenue Service has issued the newly revised payroll tax form that most eligible employers can use to claim the special payroll tax exemption that applies to many new workers hired during 2010.

Designed to encourage employers to hire and retain new workers, the payroll tax exemption and the related new hire retention credit were created by the Hiring Incentives to Restore Employment (HIRE) Act signed by President Obama on March 18.

Employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from the employer’s share of Social Security tax on wages paid to these workers after March 18. This reduction will have no effect on the employee’s future Social Security benefits. The employee’s 6.2 percent share of Social Security tax and the employer and employee’s shares of Medicare tax still apply to all wages.

In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of up to $1,000 per worker on their income tax return. Further details on both the tax credit and the payroll tax exemption can be found in a recently-expanded list of answers to frequently-asked questions about the new law now.

More details on how to claim the payroll exemption can be found in the full release here: Form to Claim Payroll Tax Exemption for Hiring New Workers Now Available