The IRS has postponed the deadline to make an election to deduct casualty losses attributable to Hurricane Sandy that were sustained in federally declared disaster areas in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia in the preceding taxable year until October 15, 2013.

Taxpayers can choose to deduct their casualty losses to reduce 2011 income, by filing an amended 2011 tax return or to reduce their 2012 income on their 2012 tax return.

As a result of this recent IRS Notice taxpayers can make the choice to take the write-off on their 2011 tax return no later than October 15, 2013.

Filing an amended 2011 tax return might benefit someone whose income dropped drastically in the last two months of 2012 because of the storm, and to whom the deduction is thus more valuable against 2011 income.

Another uncertainty is whether Congress will suspend the requirement that a casualty for loss first be reduced by 10 percent of the taxpayers adjusted gross income, a step it took after Hurricane Katrina and some other devastating natural events. That uncertainty may be another reason to request an automatic extension so that proper determination can be made as to maximize the best tax position.

Democratic and Republican lawmakers have once again introduced bills, in both the United States Senate and House of Representatives this year called the Marketplace Fairness Act of 2013 (the "Act"). The Act grants states the authority to require online and catalog retailers ("remote sellers"), no matter where they are located, to collect sales tax at the time of a transaction the same way local retailers do based on where the good are delivered. Lawmakers appear to be in agreement that states should be permitted to collect sales and use taxes from these remote sellers.

The proposed bills provide a "Small Seller Exception" that would prohibit states from requiring remote sellers with less than $1 million in annual nationwide remote sales to collect taxes.

To exercise this authority, a state must either adopt legislation implementing the provisions of the Streamlined Sales and Use Tax Agreement, which requires states to adhere to uniform definitions, filing requirements, and other rules regarding sales tax collection, or meet five sales tax simplification measures outlined in the act.

This bill will affect companies who sell goods online by eliminating the price advantage that on-line sellers have by not charging state and local sales tax. Going forward, many companies will need to re-examine their business model so that not charging sales tax is not the only reason that a customer would choose to buy from that particular company. Online businesses will need to price their merchandise competitively and not depend on not charging sales tax as their only advantage over the competition.

The Internal Revenue Service reminds taxpayers who converted amounts to a Roth IRA or designated Roth account in 2010 that in most cases they must report half of the resulting taxable income on their 2012 returns. 

Senator Carl Levin (D-Mich.) and Sheldon Whitehouse (D-RI) introduced the Cut Unjustified Tax Loopholes Act (the "Act"), on February 11, 2013, which would close corporate and individual tax loopholes and work to end offshore tax abuses and strengthen tax enforcement.

The bill, S.2075, would be stricter on offshore tax abuses and close tax loopholes that encourage corporations to move jobs offshore, claim foreign status and dodge taxes on their non-U.S. income. This bill would end a corporate tax loophole that allows corporations to claim a stock option tax deduction that is greater than the stock option expense shown on their books. It would close the "carried interest" loophole that allows hedge fund managers to pay a lower tax rate on their income, and a loophole that subsidizes speculative trading in certain financial derivatives. In addition, it would eliminate tax incentives for moving U.S. jobs offshore and transferring intellectual property offshore.

This bill would also strengthen tax enforcement so that tax authorities can investigate and rectify tax avoidance offshore by tightening rules related to tax shelter promoters, stiffening penalties on aiders and abettors of tax evasion, and modernizing federal tax lien registration.

Based on estimates from the Joint Committee on Taxation and the Office of Management and Budget, the offshore tax provisions of the bill would reduce the federal deficit by at least $130 billion over 10 years.

For more information, please visit Senator Levin's website.