Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

2019 Tax Year in Review Consolidated Appropriations Act, 2020 2019 Year-End Tax Planning 2019 Post-Filing Season Update

New Refundable Payroll Tax Credits for Small Employers; Highlights of Key Features of Families First Coronavirus Response Act
Two new refundable payroll tax credits are provided for small and midsize employers, designed to immediately and fully reimburse them, for the cost of providing Coronavirus-related leave to their empl...

Employee Retention Credit Available for Businesses Affected by COVID-19
The Treasury Department and the IRS have launched the employee retention credit for businesses that have been financially affected by COVID-19. The credit is specifically designed to encourage busines...

Claim Employee Retention Credit for First Quarter Qualified Wages on Second Quarter Form 941
The IRS has instructed employers that file quarterly employment tax returns (Form 941, 941-SS, or 941-PR) and are eligible for the new employee retention credit to not claim the credit on th...

Online Tool Helps Non-Filers Register for Economic Impact Payments
The Treasury Department and the IRS urge taxpayers who do not normally file a return to use the newly launched online tool called "Non-filers: Enter Payment Info Here" ( https://www.irs...

SSI Recipients to Get Automatic Economic Impact Payments
The IRS, the Treasury Department, and the Social Security Administration, announced that recipients of Supplemental Security Income (SSI) would automatically receive Economic Impact Payments (EIPs). S...

IRS Reports Rise in Free File Use
The IRS reported a record increase in the use of Free File products for entering and filing federal income taxes. A total of 2.9 million tax returns was recorded through the Free File program since Ja...

VA Benefits Recipients Will Automatically Receive EIPs
The IRS has announced that recipients of benefits from the Department of Veterans Affairs (VA benefits) will automatically receive Economic Impact Payments (EIPs). Veterans and their beneficiaries who...

IRS Spotlights Social Media, e-News Resources for Updates on COVID-19
The IRS urges taxpayers, businesses, tax professionals and others to follow its official social media accounts and email subscription lists to stay updated in connection with COVID-19 and economic imp...

Taxpayers Warned Against Coronavirus Scams
The IRS has warned taxpayers against tax scams and identity thefts related to the coronavirus (COVID-19). Taxpayers are expected to watch out for calls, emails, text messages, websites and social medi...

IRS to Audit More High-Income Taxpayers, Mnuchin Tells Lawmakers
The IRS is planning to audit more high-income taxpayers, Treasury Secretary Steven Mnuchin told House lawmakers. The plan comes on the heels of recent reports that the IRS has conducted more audits of...

IRS Highlights Tax Tips and Benefits for Service Members
The IRS highlighted tax tips and benefits for military members, veterans and their families to assist in meeting federal income tax filing obligations. This includes active duty or reserve members of ...

Population Figures Provided for Calculating Low-Income Housing Tax Credits
State and local housing credit agencies that allocate low-income housing tax credits and states and other issuers of tax-exempt private activity bonds have been provided with a listing of the proper p...

Additional Tax on Early Distribution from Retirement Plan is Constitutional
An individual who received a distribution from her qualified retirement plan when she was not yet 59-1/2 years old, was not disabled, and was not eligible for any of the exceptions under Code Sec...

IRS Increases User Fee for Offers in Compromise
The IRS has released final regulations that increase the user fee for processing an offer in compromise from $186 to $205, effective for offers in compromise submitted on or after April 27, 2020.The f...

IRS Encourages Taxpayers to Save for Retirement
Highlighting the tax provisions of the newly enacted Further Consolidated Appropriations Act, 2020 (the Act), the IRS has encouraged taxpayers to save for retirement. The Act includes a number of tax ...

IRS to Increase Visits to High-Income Nonfilers
The IRS has announced that it will step up efforts to visit high-income taxpayers who in prior years have failed to timely file one or more of their tax returns. With the recent and ongoing hiring of ...

Proposed Regs Reflect Changes to Entertainment and Meal Deductions
Proposed regulations reflect the significant changes that the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97) made to the Code Sec. 274 deduction for travel and entertainment expenses. For ...

Reporting Relief for 2020 IRA Required Minimum Distributions
The IRS has provided guidance to financial institutions on reporting required minimum distributions (RMDs) for 2020. The concern is that financial institutions might mistakenly treat IRA owners who tu...

Final Regs Reflect Updated Due Dates for Income Tax and Information Returns
The IRS has issued final regulations that update the due dates and extensions of time to file certain income tax returns and information returns to reflect legislative changes. The regulations replace...

IRS Launches New “Identity Theft Central” Online Resource
The IRS has announced the launch of the "Identity Theft Central," a resource designed to improve online access to information on identity theft and data security protection for taxpayers, ta...

Professionals, Taxpayers Urged to Use Multi-Factor Authentication
The IRS has urged tax professionals and taxpayers to use the multi-factor authentication feature offered on tax preparation software products for preventing data thefts. Multi-factor authentication re...

2020 Foreign Housing Expense Limitations Released
The IRS has provided the adjustments to the limitation on foreign housing expenses for specific locations for tax year 2020. Generally, a qualified individual whose entire tax year is within the appli...

2020 Standard Mileage Rates Released
The IRS has released the optional standard mileage rates for 2020. Most taxpayers may use these rates to compute deductible costs of operating vehicles for business, medical, and charitable purposes.2...

Closed School Student Loan Relief Extended
The IRS has established a safe harbor that extends relief to certain taxpayers who took out federal or private student loans to finance attendance at certain nonprofit or for-profit schools. Under the...

Interim Guidance on 2020 Withholding from Retirement and Annuity Distributions
The IRS has issued interim guidance for the 2020 calendar year on income tax withholding from periodic payments for pensions, annuities, and certain other deferred income under Code Sec. 3405(a)....

IRS Launches Assistant to Help Small Businesses Withhold Tax
The IRS has launched a new online assistant designed to help employers, especially small businesses, easily determine the right amount of federal income tax to withhold from their workers’ pay. ...

IRS Launches Gig Economy Tax Center
The IRS has announced the launch of the new Gig Economy Tax Center on its website, to help individuals in this growing area meet their tax obligations through more streamlined information. I...

IRS Provides Procedures to Claim Fuel Credits
The IRS has provided a process for eligible taxpayers to make a one-time claim for the credits and payments allowed under Code Secs. 6426(c), 6426(d) and 6427(e) for biodiesel...

IRS to Return Sequestered Funds Affected by OMB Determination
The IRS will return sequestered funds to businesses that were affected by a recent Office of Management and Budget (OMB) determination regarding the Balanced Budget and Emergency Deficit Control Act o...

IRS to Consider Repatriation Double Taxation Relief
The IRS has announced that it has become aware of limited circumstances in which it may be appropriate to provide relief from double taxation resulting from the application of the repatriation tax und...

IRS Updates Rules on Using Per Diem Rates to Substantiate Expenses Incurred Away from Home
The IRS has updated Rev. Proc. 2011-47 to reflect changes made by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97).The guidance provides the rules for determining the amount of an employee's ordinary a...

Electronic Filing Now Required for Requesting Unused Low-Income Housing Credit Carryover
The IRS has released guidance to qualified states regarding how to request an allocation of unused housing credit carryover under Code Sec. 42(h)(3)(D)(iii). The new guidance requires allocation reque...

IRS Extends Certain Deadlines, Penalty Relief for Health Coverage Forms
Health insurance providers (including employers and health insurance companies) now have until March 2, 2020, to furnish to individuals Form 1095-B, Health Coverage, and Form 1095-C, Employer-Provided...

Interim Amendments for Hardship Distributions Clarified and Deadline Extended
The IRS has clarified which amendments are integral to a plan provision that fails to satisfy the qualification requirements by reason of a change made by the final hardship distribution regulations. ...

2019 Required Amendments List for Employee Plans
The IRS has issued its 2019 Required Amendments List (2019 RA List) for individually designed employee retirement plans. Beginning with the 2019 list, all RA Lists will apply to both Code Sec. 401(a) ...

Date Extended for Applying Foreign Branch Rules
A one-year extension has been granted for applying the Code Sec. 987 final regulations, and certain related final and temporary regulations covering foreign branch transactions of U.S. corporations. T...

Guidance Updated for Making Adequate Disclosure
The IRS has updated its guidance that identifies circumstances under which a disclosure on a taxpayer’s income tax return with respect to an item or position is "adequate" for reducing the under...

IRS Releases 2020 Inflation-Adjusted Tax Tables, Other Amounts
The IRS has released the annual inflation adjustments for 2020 for over 60 tax provisions, including the income tax rate tables. The IRS issues these cost-of-living adjustments (COLAs) each year to re...

2020 Inflation Adjustments for Pension Plans, Retirement Accounts
The IRS has released the 2020 cost-of-living adjustments (COLAs) for pension plan dollar limitations, and other retirement-related provisions.Highlights of 2020 ChangesThe contribution limit for emplo...

IRS Updates Guidance on Computing Deductions for Operating a Vehicle
The IRS has released guidance that updates Rev. Proc. 2010-51, I.R.B. 2010-51, 883 to reflect changes made to Code Secs. 67 and 217 by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97). Rev. Proc. 2010-...

Accounting Method Change Procedures Updated
The IRS has released guidance listing the specific changes in accounting method to which the automatic change procedures in Rev. Proc. 2015-13, I.R.B. 2015-5, 419, apply. This guidance updates and sup...

Proposed Updated RMD Tables Issued
The IRS has proposed updated life expectancy and distribution period tables under the required minimum distribution (RMD) rules. The proposed tables reflect the general increase in life expectancy, an...

Joint Directive on Work Opportunity Tax Credit Issued
The IRS Large Business and International Division (LB&I) and Small Business/Self-Employed Division (SBSE) have issued a joint directive to provide instructions to LB&I and SBSE examiners on th...

New LB&I Campaign on Deferred Foreign Income
The IRS Large Business and International (LB&I) has added a new active campaign to the IRS website called "IRC 965." The campaign’s goal is to promote compliance with Code Sec. 965, Treatmen...

IRS Highlights Steps For Smooth Processing of Taxpayers' 2019 Federal Tax Returns
The IRS urged taxpayers to act now to ensure the smooth processing of their 2019 federal tax return. This reminder, first in a series, was aimed to help taxpayers get ready for the upcoming tax filing...

AL - Constitutional amendment proposed to impose additional fire protection ad valorem tax
Alabama proposes a constitutional amendment, subject to voter approval, to impose an additional fire protection ad valorem property tax in Fayette County of three mills. Act 2020-89 (H.B. 17), Laws 20...

AK - Governor signs tax credits law
Alaska Gov. Mike Dunleavy has signed into law H.B. 232 which creates an air quality improvement tax credit and an energy efficient new construction tax credit that could be adopted by municipalities. ...

AZ - Tax corrections and clarifications enacted
Arizona has enacted income tax corrections and clarifications relating to:return filing thresholds;special exemptions;charitable contributions;unused credits; andobsolete additions and subtractions.Re...

AR - Taxpayer's interest expense not deductible as marketing cost
Arkansas severance tax assessment issued by the Department of Finance and Administration (department) against a natural gas producer (taxpayer) was sustained because the department’s interpretat...

CA - California property tax penalties canceled for taxpayers who have financial hardship due to Covid-19
Provisions that require a California property tax collector to impose penalties, costs, or interest for failure to pay taxes on property on the secured or unsecured roll, or to pay a supplemental bill...

CO - Denials of reclassification of undeveloped parcel partly affirmed as common ownership requires identical record title owners
For Colorado property tax purposes, the Court of Appeals (court) determined that for classifying vacant property as residential land for tax classification, the term common ownership refers to identic...

CT - Priority one taxpayer assistance program announced
The Connecticut Priority One Taxpayer Assistance Program is available to business and individual taxpayers who may be unable to meet their current collection obligations due to COVID-19. Any taxpayer ...

DE - FAQs concerning 2019 personal income tax filing due July 15, 2020 issued
The Delaware Department of Revenue (department) released a list of Frequently Asked Questions (FAQs) pertaining to personal income tax filing for the 2019 tax year. The release provides the following ...

DC - QHTC regulations updated
The District of Columbia has amended regulations relating to corporate tax incentives provided to Qualified High Technology Companies (QHTC) in order to reflect code changes made in the past year. The...

FL - Guidance provided on 2020 disaster-preparedness sales tax holiday
The Florida 2020 disaster preparedness sales tax holiday begins on May 29, 2020, and ends on June 4, 2020.Items Exempt During HolidayDuring this tax holiday period, qualifying items related to disaste...

GA - Additional extensions granted due to Covid-19
Georgia has announced additional income tax deadlines have been extended in conformance with the U.S. Treasury Department and Internal Revenue Service (IRS).Estimated PaymentsThe state estimated incom...

HI - Guidance for construction contractors regarding general excise and use taxes updated
The Hawaii Department of Taxation (DOT) has updated its Tax Facts publication that provides guidance for construction contractors regarding Hawaii general excise and use taxes (GET) in a question and ...

ID - Income tax returns due June 15; taxpayers advised to e-file
Idaho has extended the 2019 income tax filing and payment due date to June 15, 2020. For more information regarding, taxpayers may review the Tax Commission website; the website provides informat...

IL - Local tax rate changes for aviation fuel announced
Illinois announced the local sales tax rate changes for sales of aviation fuel, effective July 1, 2020.Rate IncreasesThe tax rates for sales of aviation fuel in the following localities increase as in...

IN - Additional filing and payment extensions announced
Indiana has announced additional extensions for the filing and payment of personal and corporate income tax returns due to the COVID-19 pandemic. These are in addition to the previously announced exte...

IA - Iowa small business relief program continues
A new Iowa Small Business Relief Program is accepting a second round of applications. The program, Iowa Small Business Relief Program, which was announced by Gov. Reynolds on March 23, was put in plac...

KS - Q3 local rate changes announced
The Kansas DOR announces the local sales and use tax rate changes below for the quarter beginning July 1, 2020.City Rate ChangesCity rate changes and developments are as follows:Burlingame increases i...

KY - Information bulletin on local government premium taxes updated
The Kentucky Department of Insurance has updated a bulletin that contains information on local government premium taxes (LGPT) for insurance companies doing business in Kentucky, including the 2020-20...

LA - Tax returns, payments, and reports filing deadline extended to June 25, 2020
Louisiana has extended the April 25, 2020, severance tax returns, payments, and reports filing deadline to June 25, 2020. The extension does not apply to severance tax returns, payments, or reports du...

ME - Disaster relief compensation exemption applicable to Covid-19 emergency
Maine Revenue Services has revised its COVID-19 FAQs to discuss the personal income tax exemption for a nonresident’s income earned when conducting trade or business in the state during a disast...

MD - Guidance on covid-19 withholding requirements for teleworking employees updated
The Maryland Comptroller has updated its guidance on income tax withholding requirements for teleworking situations due to the COVID-19 pandemic. The document notes that the Comptroller recognizes the...

MA - Covid-19 withholding sourcing rules for telecommuting employees adopted
Massachusetts adopted sourcing rules for personal income tax withholding from employees who telecommute during the COVID-19, or coronavirus, pandemic.NonresidentsEmployers must source compensation to ...

MI - Prepaid fuel rates announced
Beginning June 1, 2020, Michigan’s prepaid sales tax rate on fuel will change. From June 1, 2020 through June 30, 2020, the prepaid rate for gasoline decreases from 10.0 cents per gallon to 7.1 ...

MN - Tax court closed for in-person filing until May 18; other Covid-19 related impacts on tax court discussed
Minnesota discusses the impact of COVID-19 pandemic on the Tax Court (court). The state clarifies that:Since the court is closed until May 18, 2020 to in-person filing, all appeals from orders of the ...

MS - Covid-19 filing and payment deadline further extended to July 15
Due to the COVID-19 pandemic, the Mississippi Department of Revenue has announced that the due date for filing income tax returns and making first and second quarter estimated payments is further exte...

MO - Bill would exempt stimulus payments, adopt new procedures for partnerships
The Missouri General Assembly has approved a bill that for income tax purposes would:exempt federal Coronavirus Aid, Relief and Economic Security (CARES) Act stimulus payments from Missouri taxes;adop...

MT - Montana cares act amendments affecting nols and other provisions discussed
A number of provisions in the federal CARES Act apply when a taxpayer calculates Montana taxable income, including:Section 2303, which allows a five-year carryback for net operating losses arising in ...

NE - Covid-19 estimated tax payment extensions clarified
Nebraska clarified estimated corporate and personal income tax payment extension relief due to the COVID-19, or coronavirus, crisis.First Installment for 2020The first installment of estimated tax due...

NV - Fair market values at wholesale for marijuana announced
Nevada has announced the fair market values at wholesale for marijuana tax purposes.Fair Market Values for WholesaleFor the period January 1, 2020, through June 30, 2020, the fair market values at who...

NH - Education credit annual guidance released
The New Hampshire Department of Revenue Administration has provided annual guidance for the credit for donations to scholarship organizations that may be claimed against the business profits tax and t...

NJ - Valuation upheld due to lack of competent evidence
A New Jersey County Board of Taxation’s (Board’s) judgment reducing the Borough’s property tax assessment of a taxpayer’s single-family residence was upheld because the taxpaye...

NM - Assessment upheld for failure to overcome presumption of correctness
A New Mexico administrative hearings officer upheld the Department of Taxation and Revenue’s (department) International Fuel Tax Agreement (IFTA) tax assessment because the taxpayer failed to pr...

NY - Taxpayer's petition for summary determination denied
For New York sales and use tax purposes, an out-of-state taxpayer’s petition for summary determination was dismissed because the taxpayer’s status as vendor could not be determined from th...

NC - Due dates for taxes on motor vehicles tied to registration expiration are extended
Due dates for North Carolina property taxes on motor vehicles that are tied to registration expiration are extended to correspond with extended expiration dates of credentials. The Division of Motor V...

ND - Local tax changes announced
North Dakota has announced upcoming local sales and use tax rate changes that are effective July 1, 2020.BeulahBeulah’s 2% city sales, use, and gross receipts tax has been extended and is now se...

OH - Financial institutions tax regulation updated
Ohio updated the financial institutions tax regulation regarding the limitation on the tax base. After 2019, total Ohio equity capital is a financial institution’s total equity capital, limited ...

OK - Q3 local rate changes announced
Oklahoma local sales and use tax rate changes have been announced effective July 1, 2020.City Rate ChangeHydro increases its rate from 4% to 4.5%.County Rate ChangeChoctaw County decreases its rate fr...

OR - Cares act assistance not subject to Oregon cat
Oregon has determined that certain federal assistance to businesses under the Coronavirus Aid, Relief, and Economic Security (CARES) Act is not commercial activity and will not be subject to the Corpo...

PA - Dismissal of petition to set aside tax sale upheld for lack of standing
A Pennsylvania trial court’s dismissal of a property tax complaint was affirmed because the company was not the owner of the property at the time of the tax sale and lacked standing to challenge...

RI - Division issues refund update
The Rhode Island Division of Taxation has issued an update on personal income tax refunds amid the coronavirus pandemic. The Division will continue to issue state tax refunds on schedule, despite the ...

SC - Coronavirus filing and payment relief expanded
In response to expanded tax relief provided by the Internal Revenue Service, South Carolina is providing additional tax filing and payment relief as a result of the COVID-19 pandemic. Tax relief to Ju...

SD - Assessment freeze program discussed
For South Dakota property tax purposes, the Department of Revenue reminds disabled and elderly taxpayers that they have until April 1, 2020, to apply for relief under the state’s assessment free...

TN - Tennessee marketplace facilitator legislation enacted
Tennessee has enacted marketplace facilitator legislation, for sales and use tax purposes, effective October 1, 2020.Marketplace FacilitatorsA marketplace facilitator that collects and remits sales or...

TX - Jurisdictional requirements satisfied despite only partial prepayment of taxes
A taxpayer satisfied the jurisdictional requirements for a trial court to hear its suit challenging the Comptroller’s franchise tax assessment. The taxpayer prepaid some of the taxes due under t...

UT - Local transient room tax rate changes announced
Utah announced the following local transient room tax rate changes, effective July 1, 2020.Increased County Transient Room TaxesJuab County increases its county transient room tax from 3% to 4.25%. To...

VT - Grand list lodging instructions for municipalities updated
The Vermont Department of Taxes has updated its publication providing instructions to municipality property tax listers for preparing the grand list lodging. Municipalities must maintain, update, and ...

VA - Employee misclassification provisions enacted
Virginia enacted provisions prohibiting individuals from being classified as independent contractors if they are employees. An individual performing services for remuneration is considered an employee...

WA - Covid-19 federal assistance programs not subject to tax
The Washington Department of Revenue has announced that businesses receiving assistance from federal programs (including the Paycheck Protection Program (PPP)) to cope with the effects of the COVID-19...

WV - Credit for donations or sales of passenger vehicles enacted
West Virginia enacted a corporation and personal income credit for:taxpayers who donate passenger vehicles to charitable organizations in West Virginia;new or used motor vehicle dealers who sell passe...

WI - Assessment upheld as transfer not eligible for exemption
A conveyance of real property from an unincorporated association to a non-profit corporate entity did not qualify for an exemption from Wisconsin real estate transfer tax for failure to comply with th...

WY - Solar panel erroneously subject to property tax as appurtenances; containers not skid-mounted
A taxpayer's solar panels and shipping container were erroneously subject to Wyoming property tax as "real property". Generally, under Wyoming law, land and appurtenances, including structures af...