August 2015 Tax Newsletter
I hope your summer is going well. Everyone at Moskowitz LLP has been working full steam ahead on our tax and litigation cases. We are happy that this year has once again brought success in the form of wins for our clients and a vigorous defense of taxpayer rights.
Please pay particular attention to the information outlined in our newsletter addressing the effect of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, signed into law on July 31, 2015. This law tied general federal funding changes to certain tax return/information filing deadlines and expanded the statute of limitations on certain types of audits.
As always, should you wish to discuss your case or any tax matter, do not hesitate to reach out to me or the firm. We look forward to continuing to serve your personal and business tax interests.
Steve Moskowitz, Esq.
Alert: FBAR (FinCen 114) due April 15
Beginning December 31, 2015, FinCen 114 - Report of Foreign Bank and Financial Accounts - shall be due on April 15th, rather than June 30. A six month extension is available, thus tying the Information Return to the same dates as the 1040 for calendar year individual taxpayers. See Surface Transportation and Veterans Health Care Choice Improvement Act of 2015
Alert: Partnership and S Corporation returns must be filed by March 15 for calendar year entities (or, if a fiscal year, 2 1/2 months after the end of the fiscal year).
Partnership tax returns under § 6031 and tax returns for S corporations under §§ 6012 and 6037 calendar year organizations are due March 15th. There is a maximum filing extension of six months for Form 1065. See Surface Transportation and Veterans Health Care Choice Improvement Act of 2015
Alert: New Six Year Statute of Limitation for IRS to Audit taxpayers accused of understating gross income by reason of an overstatement of unrecovered cost or basis.
Prior to this legislation, generally the only way the IRS could extend the 3 year statute of limitations to audit tax returns under § 6051 was to allege that there was an under-reporting of gross income of 25% or more. In 2012, The Supreme Court, in a taxpayer friendly opinion upheld this position in Home Concrete & Supply LLC v. US. Unfortunately this new legislation now extends the periods (from 3 years to 6 years) that can be audited to not only include gross omissions of income (25% or more) but also substantial overstatements of unrecovered costs or basis.
Note that the 3/6 year statute is only provided in §6051, and another code section (6051(c)(1) and (2) continues to provide an unlimited statute of limitations in the case of an attempt in any manner to evade tax. Thus, the legislation may serve mainly to legislatively over-turn Home Concrete and in reality have little actual impact on taxpayer audits. However, we are constantly watching congressional acts to keep abreast of where the pendulum is sitting in relation to taxpayer rights and congress' tax intent.
Making a Mid - Year Charity Donation?
Summer is often the time of year when garages get cleaned out and last year's clothing sorted for donation. When making donations to charities it is important to properly document the donation for tax purposes. Please take a look the IRS publication on donations. If you have questions, please call Moskowitz LLP at (888) 829-3325