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UHY LLP Michigan Practice
JULY 2016
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AUTOMATED ATTACKS PROMPT E-FILING PIN SYSTEM SHUT DOWN By Chris Clark Both the electronic filing PIN tool on IRS. gov and the toll-free phone service were shut down last week due to increased automated bot attacks on the platform. A similar increase was detected in February, but the service was kept online since it was the middle of tax season and the e-filing pin system was used in nearly all commercial tax programs. The IRS added more defenses to processing systems to examine tax returns more closely during that time period as an alternative to shutting down the program.
The shutdown is only expected to impact a smaller number of taxpayers who haven't filed their returns this year and need a replacement e-file PIN. Nonetheless, this latest incident is yet another reason to safeguard personal and financial information and be cautious when conducting online transactions.
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DUE DATE EXTENDED TO CLAIM WORK OPPORTUNITY TAX CREDIT...AGAIN
By Matt Munn, CPA The IRS recently issued Notice 2016-40 that provides transitional relief to employers claiming the Work Opportunity Tax Credit (WOTC). The WOTC is a tax credit for employers that hire individuals that belong to one of nine different targeted groups including Veterans, Temporary Assistance Recipients, and Empowerment Zone residents. The President signed the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) in mid-December 2015 which retroactively reinstated the WOTC to Jan. 1, 2015 and extended it through Dec. 31, 2019. The IRS then issued Notice 2016-22 that provided transitional relief for employers with qualified new hires between Jan. 1, 2015 and May 31, 2016, to file the necessary documents before June 29, 2016. This new Notice allows employers an additional three months of time to complete the IRS Form 8850 and Department of Labor Form ETA 9061 (or ETA 9062) because of this retroactive application.
The old process for the WOTC established strict timelines for employers to complete the forms noted above and submit them to their State Workforce Agency (SWA) within 28 days of the start date for a qualified new hire. Notice 2016-40 provides employers an extended due date of Sept. 28, 2016, to complete the Forms 8850 and ETA 9061 and submit to their SWA for any qualified employee hired between Jan. 1, 2015 and Aug. 31, 2016.
It is important to note a few items for 2016. First, the Notice provides relief for the 28 day timeline for 2016 new hires even though the law was enacted in 2015. Second, the PATH Act included an additional targeted class of new hires that qualify for the tax credit, Long-Term Unemployment Recipients.
It is highly recommended that employers, believing they could qualify for this tax credit, complete the Forms 8850 and ETA 9061 as soon as possible and submit them to their SWA. In Michigan the SWA is located at: Michigan UIA, WOTC Unit, P.O. Box 8067, Royal Oak, MI 48068-8067. However, the State of Michigan prefers that employers utilize the online services available with the MIWAM website to file the completed forms electronically. Processing times can be greatly shortened by using the online filing capabilities.
For more information or help filing for the Work Opportunity Tax Credit, contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us online at www.uhy-us.com.
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UNCERTAINTY REMAINS AFTER 'BREXIT'
By Chris Clark
Last week the United Kingdom made a historical decision to leave the European Union, otherwise known as "Brexit" (a portmanteau of "British exit"). After a 52 to 48 percent vote to leave the EU, economists continue to reassure the public that the move will have a relatively small impact on the global economy as a whole.
Some of the deciding factors for those who backed the Brexit include immigration control, decentralization of power, and to 'make Britain great again'.
The referendum itself is not legally binding and European leaders have expressed frustration at the UK's hesitancy to put things into motion. Will it still happen? Can they hold another vote? There's a lot of unanswered questions that remain after last week's decision and only time will tell.
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UHY GLOBAL: ISSUE 2
UHY Global is a new twice-yearly publication that gives our readers insight into current business affairs in countries and business cultures around the world, and how our experts deal with challenges and bring solutions.
CLICK HERE TO DOWNLOAD YOUR COPY
Included in this issue:
The global team behind the Olympics
New hope springs from world oil downturn
What breeds a healthy start-up?
...and much more
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NEW PARTNERSHIP AUDIT PROCEDURES
By Ibby Michalik, CPA
The Budget Act of 2015, which was signed into law in November 2015, made major changes to the rules governing federal tax audits of partnerships. The legislative change repealed the partnership audit procedures commonly known as TEFRA (Tax Equity and Fiscal Responsibility Act of 1982). Generally, a partnership with eleven or more partners at any one time during the partnership's tax year is a TEFRA partnership. TEFRA audits are subject to additional administrative procedures during an IRS audit.
The new rules allow the IRS to deal with only a single partnership representative during an audit. Unless the partnership opts out, the new rules impose an entity-level tax on the partnership at the highest rate of tax in effect for the year under review. The entity-level tax can be avoided if the partnership elects to pass the adjustments to its partners by providing them with adjusted Schedule K-1s reporting their share of any partnership-level adjustments. The purpose of the new rules is to streamline partnership audits under a single set of rules and to make it easier for the IRS to assess and collect tax after a partnership audit. The new rules apply to partnership tax returns filed for taxable years after Dec. 31, 2017. The partnership may elect to apply them to an earlier taxable year.
Because of this change and the affect it could have in situations where the 'flow through' partner is in a lower tax bracket, it is important to review whether or not the partnership should consider to opt out of this plan. For assistance with the new procedures, contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at www.uhy-us.com. |
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Published by UHY LLP News.
Copyright � 2013 UHY LLP. All rights reserved.
Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
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