Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

Tax Reform 2.0 2018 Post-Filing Season Update Congress Approves Sweeping Tax Overhaul Tax Cuts and Jobs Act

Proposed Regs. Limit Charitable Contributions Made to Avoid SALT Deduction Limit
An individual, estate, and trust generally must reduce the amount of any charitable contribution deduction by the amount of any state and local tax (SALT) credit he or she receives or expects to the r...

Proposed Regulations Provide Guidance on GILTI Inclusion
Much-anticipated proposed regulations provide guidance for U.S. shareholders determining the amount of global intangible low-taxed income (GILTI) to include in gross income. The Tax Cuts and Jobs Act ...

Interim Guidance Provided for Exempt Organizations with Multiple Unrelated Businesses
Interim guidance and transition rules have been released regarding the special rule requiring exempt organizations that have unrelated business taxable income from operating more than one unrelated bu...

IRS Provides Guidance on What Constitutes a Covered Employee
Taxpayers can rely on new guidance related to the limitation on the deduction for employee compensation in excess of $1 million. Specifically, the guidance addresses:the definition of a covered employ...

Qualifying Relative Definition Still Uses Inflation Adjusted Exemption Amount
The IRS clarified who is a "qualifying relative" for the new $500 dependent credit and head of household filing status for tax years 2018-2025. The new rules will continue to use the inflati...

Moving Expense Reimbursements Incurred Before 2018 Are Excluded
Employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes.The Tax Cuts...

Six-Year Spread Applies to 481(a) Adjustments After Terminated S Corporation’s Accounting Method Change
New temporary rules clarify a six-year spread period for Code Sec. 481(a)adjustments after an eligible terminated S corporation changes from a cash to an accrual method of accounting. These rules...

North Carolina Victims of Hurricane Florence Granted Tax Relief
President Donald Trump has declared a federal disaster area in North Carolina. The disaster is due to Hurricane Florence, which began on September 7, 2018.The disaster area includes the following coun...

IRS Releases Guidance for Section 199A Pass-Through Deduction
The IRS has released long-awaited guidance on new Code Sec. 199A, commonly known as the "pass-through deduction" or the "qualified business income deduction." Taxpayers can re...

Regulations Issued on Partnership Representative Under Centralized Partnership Audit Regime
The IRS has issued final regulations regarding the designation and authority of the partnership representative under the centralized partnership audit regime. The final regulations make a number of ch...

Proposed Rules Address 100-Percent Depreciation Deduction
Proposed regulations address the new 100-percent depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service.BackgroundThe Tax Cu...

Regulations Proposed on Code Sec. 965 Transition Tax
Proposed regulations provide rules for determining the Code Sec. 965 inclusion amount of a U.S. shareholder of a foreign corporation with deferred foreign income. The tax imposed on the incl...

IRS Replaces Proposed Rules on Partnership Audit Regime
The IRS has released proposed regulations governing the centralized partnership audit regime. These regulations replace some existing proposed rules to reflect changes made by the Tax Technical Correc...

Short-Term Health Insurance Exemption from ACA Consumer Protections Broadened
The Departments of Health and Human Services, Labor, and Treasury have amended the definition of short-term, limited-duration individual health insurance coverage, by allowing such coverage to last up...

Hardest Hit Fund Safe Harbor Modified
The IRS has modified the safe harbor for computing deductible mortgage interest under Code Sec. 163 and real property taxes under Code Sec. 164(a)(1) by homeowners participating in...

IRS Extends Filing, Payment Deadlines for California Wildfire Victims
The IRS has extended filing and payment deadlines for certain California taxpayers affected by wildfires. Taxpayers in Shasta County may qualify for tax relief.Extended DeadlinesIndividuals and busine...

Discharge Relief Available for Private Student Loan Debtors
The IRS has provided relief to taxpayers who took out private student loans to finance attendance at a school owned by Corinthian College, Inc. (CCI) or American Career Institutes, Inc. (ACI). Under t...

Small Businesses Get Automatic Consent for Accounting Method Changes
The IRS will provide automatic consent to a small business taxpayer’s application to change to the cash method of accounting. Eligible small business taxpayers, as defined by the Tax Cuts and Jo...

Exempt Organizations May Not Need to Include Donor Information on Returns
Tax-exempt organizations, other than charities exempt under Code Sec. 501(c)(3), will soon be able to stop reporting the names and addresses of contributors on Schedule B when filing their inform...

IRS Unveils Draft Form 1040
Taxpayers will be able to file federal income taxes starting next filing season on a new postcard-sized Form 1040. The IRS officially released the draft 2018 Form 1040 on June 29.Draft Form 1040The ne...

Preparer Due Diligence Rules Include Head of Household Eligibility
The IRS has proposed amendments to the tax preparer due diligence regulations to reflect a recent law change. The Tax Cuts and Jobs Act ( P.L. 115-97) expanded the scope of the due diligence pena...

IRS Clarifies Estate and Trust Expenses Not Subject to Miscellaneous Itemized Deduction Suspension
The Treasury Department and the IRS plan to issue regulations clarifying that certain estate and nongrantor trust expenses remain deductible and are not subject to the miscellaneous itemized deduction...

Veterans Urged to Claim Refund for Tax Overpayments on Disability Severance Payments
The IRS has urged certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Inco...

IRS Highlights “Security Six” Safeguards
The IRS, along with Security Summit partners, offered important tips dubbed "Security Six"protections to help tax professionals protect their computers and email as well as safeguard sensitive ta...

AL - New IRP assigned renewal month announced
The Alabama Department of Revenue has announced that the month of January will be the default assigned renewal month for new International Registration Plan (IRP) accounts during the period November 1...

AK - Marijuana tax changes
The Alaska Department of Revenue has made changes to its Administrative Code regarding marijuana taxes. The regulations were changed to implement new tax rates for various parts of the marijuana plant...

AZ - Publication regarding reporting by optical media issued
For personal income tax purposes, the Arizona Department of Revenue (department) has issued a publication that contains information on reporting by optical media of federal Forms W-2 and Forms W-2c. T...

AR - Sale of mobile unlicensed cranes qualified for isolated sale exemption
The Arkansas Department of Finance and Administration’s Revenue Legal Counsel has issued an opinion stating that a company’s sale of mobile licensed cranes to a taxpayer would qualify for ...

CA - Like-kind exchange under IRC §1031 properly disallowed
The California Court of Appeals affirmed the trial court's judgment denying the taxpayers’ personal income tax refund claims because the taxpayers did not meet their burden to prove that they de...

CO - Taxability of sales of electric car charging stations, related annual network fees and maintenance charges discussed
The Colorado Department of Revenue issued a general information letter discussing the applicability of sales tax to sales of electric car charging stations by a taxpayer and to annual network fees and...

CT - Department begins accepting online applications for tax preparer/facilitator permits
The Connecticut Department of Revenue Services (department) issued a special notice stating that it has begun accepting online applications from individuals and businesses required to obtain tax prepa...

DE - Checkoff for protecting Delaware’s children fund enacted
Legislation has been enacted authorizing the creation of Beau Biden Foundation for the Protection of Children Fund for individuals, to which Delaware personal income taxpayers who claim an overpayment...

DC - Thresholds for schedule H credit increased
The District of Columbia announced the personal income tax Schedule H maximum credit amount and upwardly revised the income thresholds.What is the Schedule H Credit Amount for 2019?The 2019 maximum am...

FL - 2018-2019 citrus fruit assessment rates announced
Florida has announced the 2018-2019 citrus fruit assessment rates.2018-2019 Citrus Fruit Assessment RatesThe assessment rates per each standard packed box of citrus fruit grown and placed into the cha...

GA - Georgia updates hurricane Michael amnesty
Georgia has updated the tax amnesty extended to Georgia victims of Hurricane Michael. Details of the amnesty were previously reported.What did Georgia Update?Georgia updated the amnesty to include the...

HI - Proposed surcharge on investment real property declared invalid
A question on the 2018 Hawaii general election ballot proposing a potential surcharge on investment real property is invalid. The Hawaii Supreme Court ordered that any votes for or against the propert...

ID - Tax filing and payment deadline extended for victims of hurricane Michael
The Idaho State Tax Commission has issued a press release informing taxpayers that the 2017 tax filing and payment deadlines for victims of Hurricane Michael in Florida, Georgia and elsewhere have bee...

IL - Illinois adds attorney-in-fact payment regulation
Illinois added a regulation on current law that allows a corporate income tax subtraction for fees paid to an attorney-in-fact by an:interinsurer; orreciprocal reinsurer.86 Ill. Adm. Code Sec. 100.266...

IN - Tax sale purchaser was not a third-party beneficiary
For Indiana property tax purposes, the Court of Appeals affirmed the trial court’s decision that granted the motion for summary judgment to the service provider because the tax sale purchaser wa...

IA - Iowa issues Sec. 965 guidance
Iowa has issued guidance for taxpayers because it does not conform to IRC Sec. 965 for the 2017 tax year.Does Iowa Allow the Sec. 965 Participation Exemption?Iowa taxpayers cannot reduce their income ...

KS - Registration publication reissued
The Kansas Department of Revenue has updated its publication on registering for business taxes, like sales and use, income, and cigarette taxes. Information Guide No. KS-1216, Kansas Department o...

KY - Kentucky issues guidance on business inventory credit
Kentucky issued guidance on its credit for personal property tax paid on certain business inventory. Taxpayers can apply the credit against Kentucky:corporate income tax;limited liability entity tax (...

LA - Guidance provided on changes to IRC §965 repatriation income
Louisiana has issued guidance on how to report IRC §965 repatriation income for state tax purposes, and how to claim the federal income tax deduction on the income taxed at the federal level. Und...

ME - Filing relief announced for taxpayers affected by recent hurricanes
Maine tax filing relief has been announced for certain state taxpayers located in federally declared disaster areas who were affected by recent hurricanes. For such taxpayers, interest and any late fi...

MD - Earned income tax credit notice issued
The Maryland Comptroller’s Office has issued a personal income withholding Tax Alert concerning the requirement of an employer to notify employees of potential earned income tax credit (EITC) el...

MA - Massachusetts creates addbacks for TCJA deductions
Massachusetts budget legislation creates corporate excise tax addbacks for certain federal deductions enacted by the Tax Cuts and Jobs Act (TCJA).What Are the TCJA Deduction Addbacks?The addbacks cove...

MI - Assessments for unpaid taxes and interest upheld
For Michigan real estate transfer tax purposes, the Court of Appeals upheld the tax tribunal’s order that concluded that the Department of Treasury properly assessed the transfers based on the v...

MN - Third-quarter withholding tax return is due October 31
For Minnesota personal income tax purposes, the Department of Revenue has issued a bulletin reminding taxpayers that the due date for filing Minnesota withholding tax return for the third quarter (Jul...

MS - Hurricane florence victims receive tax relief
Mississippi is following federal extensions granted to victims of Hurricane Florence.What is the Extended Deadline?Taxpayers from counties that are designated federal disaster areas will have until Ja...

MO - Sales of processed beef via virtual platform taxable
A taxpayer’s sales of processed beef through an online marketplace did not qualify for the farmer’s market exemption from Missouri sales tax because the definition of "farmer’s ...

MT - Deferred compensation plan distributions sourced to Montana
For personal income tax purposes, a taxpayer was not permitted to deduct her distributions from her deferred compensation account in her Montana adjusted gross income because the taxpayer was a reside...

NE - Nonresident income tax withholding for personal services discussed
For corporate income tax purposes, the Nebraska Department of Revenue issued a general information letter stating that the requirement to withhold income tax from payments to nonresident individuals f...

NV - Nevada economic nexus rules in effect
Remote sellers meeting Nevada’s new economic nexus thresholds must begin collecting sales tax by November 1, 2018.Economic Nexus ThresholdsThe economic nexus thresholds are:more than $100,000 of...

NH - Governors responds further to wayfair
Following the decision in South Dakota v. Wayfair, Inc., U.S. Supreme Court, Dkt. No. 17-494, June 21, 2018, New Hampshire Governor Chris Sununu joined Attorney General Gordon MacDonald and Busin...

NJ - Additional guidance issued for reporting IRC Sec. 965 Income in New Jersey
The New Jersey Division of Taxation has updated its website to include additional guidance on reporting IRC Sec. 965 income, in addition to other corporation business tax changes. The website can be v...

NM - Interest rate remains unchanged for fourth quarter of 2018
The interest rate charged on an underpayment or paid on an overpayment of New Mexico tax remains unchanged, at 5%, for the fourth quarter of 2018.The release can be viewed on the New Mexico Department...

NY - Real estate developer entitled to QEZE credit passing through from partnership
For New York corporate income tax purposes, a taxpayer was entitled to claim the Qualified Empire Zone Enterprise (QEZE) credit passed through from a related entity, because the entity met the require...

NC - North Carolina issues guidance on withholding tax changes
North Carolina issued guidance on important law changes for employers and others that must withhold personal income tax. The guidance discusses:a decrease in the individual income tax rate;an increase...

ND - Local tax changes announced
The North Dakota cities of Bowman, Burlington, Cooperstown, Enderlin, New Salem, and Towner announced local sales and use tax changes. The changes are effective January 1, 2019. Details are provided b...

OH - Taxpayers filing 2019 municipal net profit tax must register by November 1
The Ohio Department of Taxation (department) has issued a press release informing corporate income taxpayers that Ohio businesses that have a tax year that begins on September 1, 2018 and want to file...

OK - Simplified remote seller registration open
The Oklahoma Tax Commission alerts remote sellers that simplified remote seller registration is now available. Retailers making a certain level of Oklahoma sales must now remit sales tax to the Commis...

OR - Listed jurisdiction subtraction allowed
Oregon adopted a temporary regulation allowing corporate taxpayers a subtraction for some listed jurisdiction income.Why is the modification necessary?Oregon required corporate taxpayers to include li...

PA - Air freight forwarding company apportionment adopted
Pennsylvania adopted legislation providing for special apportionment factors for air freight forwarding companies. The changes apply to tax years beginning after 2016.What is an Air Freight Forwarding...

RI - Interest rates announced for 2019
Rhode Island tax interest rates for 2019 will be:5.25% for refunds (4.25% for 2018); and18% for delinquencies (same as for 2018).Advisory 2018-43, Rhode Island Division of Taxation, October 30, 2018...

SC - Job development credits expanded, agricultural products credit enacted
South Carolina expanded its job development credits and added a credit for taxpayers who purchase state-grown agricultural products.Job Development CreditsThe state reduced the job creation requiremen...

SD - Guidance for entertainers updated
The South Dakota Department of Revenue has updated a fact sheet that provides guidance on the applicability of sales and use tax to entertainers. The fact sheet discusses, among other things, tax lice...

TN - Fees charged by nonprofit organization in its transportation vehicle share programme subject to tax
Membership fees, single-use fees, usage fees and other fees charged by a nonprofit organization (taxpayer) in its transportation vehicle share programme were subject to Tennessee sales tax because the...

TX - Guidance for nonprofit and exempt organizations issued
The Texas Comptroller of Public Accounts has issued a publication that identifies some qualified nonprofit and tax-exempt organizations and discusses their exemptions from limited sales and use tax, h...

UT - Subcontractor’s purchases of certain items for installation on DOT’s public freeways and highways not exempt
A subcontractor’s (taxpayer’s) purchases of certain items for installation on the Utah Department of Transportation’s (UDOT’s) public freeways and/or highways failed to qualify...

VT - Capital gain qualified for 40% exclusion because property was held for more than three years
For Vermont personal income tax purposes, a taxpayer’s capital gain on the sale of his interest in a property to his sister in tax year 2017 qualified for the 40% exclusion because the taxpayer ...

VA - Deadline for six-month filing extension is November 1
The Virginia Department of Taxation has issued a press release informing personal income taxpayers that the deadline for the six-month income tax filing extension is November 1, 2018. The release info...

WA - Documentation of federal employee credit card purchases explained
Federal government employees are only exempt from Washington sales tax if their purchases are paid for by the federal government. Employees with an individually billed account must pay sales tax even ...

WV - Economic nexus thresholds announced for remote sellers
In light of the U.S. Supreme Court decision in South Dakota v. Wayfair, Inc., Dkt. 17–494, June 21, 2018, certain remote sellers are required to collect and remit West Virginia sales and us...

WI - Wage and information return reporting requirements for payers discussed
The Wisconsin Department of Revenue has issued a personal income tax notice discussing wage statement and information return reporting requirements for payers. Employers and payers doing business in W...

WY - Coal extracted using certain highwall mining system was underground Coal
For Wyoming severance tax purposes, coal that a mining company (taxpayer) extracted using a certain highwall mining (HWM) system was considered underground coal, because the HWM system used tunnels to...