Robert C Olivieri, Jr. - Call Bob now at 215.550.3636 for Solutions

The Internal Revenue Service has given Section 529 tuition programs the ability to change their investment strategies more frequently in response to the financial crisis.

The college savings plans, named after Section 529 of the Tax Code, will now be able to change their investment strategies twice a year, instead of just once a year. In 2001, the IRS issued rules that allowed such a change annually and when there was a change in the designated beneficiary of the account.

In response to concerns that have been caused by the recent condition of the financial markets, commentators have requested more flexibility in this special rule, specifically the ability to change the investment strategies more frequently, said the IRS. Those commentators expressed concern that the inability to do so may interfere with the preservation of the value of a Section 529 account in the face of changes in the markets.

The new notice permits a change in the investment strategy selected for a Section 529 account twice per calendar year in 2009, as well as upon a change in the designated beneficiary of the account.

Allow the firm of Robert C Olivieri, Jr PC, with over 30 years of experience, to guide you with your investment decisions with your 529 plan, keeping  in mind we are not commissioned stock brokers.  In addition, we are able to prepare your individual income tax returns, for the coming year, so you would benefit from deductions of which you may not be aware or even entitled.  Call us now, almost anytime, at 215-943-3296.  Or, you may email us at rcocpa@erols.com.

Some information taken from WebCPA

Turns out it is a pretty good time to be a tax cheat.

Desperate to bring in revenue in the middle of a recession, states across the country are adopting tax amnesty programs, offering to let people pay their past-due tax bills with little or no penalties or interest.  Let the firm of  Robert C Olivieri, Jr PC assist you with the preparation and filing of a tax amnesty application for any unpaid state, income or payroll tax liabilities, as we have saved many taxpayers a tremendous amount of money, over the years, with our experience in dealing with various state department of revenue agencies.

Oklahoma, for example, has generated about twice as much as it expected from its offer of amnesty, raising $82 million through its 90-day Clean Slate program for businesses and individuals. New York has a program under way, and Connecticut and Massachusetts are drawing up theirs. California debated one before rejecting it in favor of stiffer penalties. Delaware’s incoming governor campaigned on the idea. A similar program is being considered for Louisiana when its lawmakers return in April.

State after state is facing a disastrous drop-off in tax revenue because of the stock market collapse and the recession. Many states have already cut their budgets and started laying off employees.

Many states are reluctant to offer amnesty, arguing that its rewards cheaters, discourages honest taxpayers and poaches revenue the states will collect in the future _ especially as they improve the databases they use to catch delinquents. They worry, too, that people will hold back on their taxes and simply wait for the next amnesty.

New York, which has a $1.5 billion deficit, began a limited amnesty last January that covers income, corporate and sales taxes. The state has collected $11 million so far and hopes to take in $30 million.

Again, contact our firm now at 215-943-3296 for an aggressive defense on your unpaid state tax liabilities.  You may also contact us at rcocpa@erols.com.  Our office is open seven days a week and you may call as late as you wish.

Parts of this were taken from
AP Online via NewsEdge

 The Internal Revenue Service has announced a two-year test of two programs; the post-Appeals mediation and arbitration procedures for Offer in Compromise and Trust Fund Recovery Penalty.   The firm of Robert C Olivieri, Jr PC is able to assist you with these two programs for any unpaid income or payroll tax liabilities, as we have saved many taxpayers a tremendous amount of money, over the years, with our experience in dealing with the Internal Revenue Service.

Beginning December 1, 2008,. for a  two-year test period, Appeals will offer post-Appeals mediation and arbitration for OIC and TFRP cases for taxpayers whose appeals are considered at the Appeals office in Atlanta, Ga.; Chicago, Ill.; Cincinnati, Ohio; Houston, Texas; Indianapolis, Ind.; Louisville, Ky.; Phoenix, Ariz.; and San Francisco, Calif.

Under these two alternative dispute resolution programs, the taxpayer or Appeals may request nonbinding mediation. The taxpayer may decline Appeals’ request for mediation. Appeals will evaluate a taxpayer’s request for mediation based on the criteria detailed in Revenue Procedure 2002-44 and Announcement 2008-111.  A request for binding arbitration must be made jointly by the taxpayer and Appeals. The mediation and arbitration procedures do not create any additional authority for settlement by Appeals.

During the test period, Appeals employees will advise the taxpayer of the availability of these alternative dispute strategies and the deadline for timely requesting such strategies when a rejection of an OIC is sustained or a proposed TFRP assessment is sustained.  An OIC submitted during Collection Due Process (CDP) as an alternative to a Collection action is not eligible for these alternative dispute resolution strategies during the test period.

The Post-Appeals mediation process is available for both legal and factual issues. The mediator’s role is to facilitate settlement negotiations so the parties can reach their own agreement.  The mediator does not have settlement authority over any issue.

The Arbitration procedure is available for factual issues only. The arbitrator’s role is to hear both sides of a disputed issue and then render a decision on the specific factual issue being arbitrated.  This decision is binding on both parties.  However, the arbitrator does not have the authority to decide that the offer in compromise itself must be accepted or that a person is/is not liable for the TFRP under § 6672.  Neither party may appeal the decision of the arbitrator or contest the decision in any judicial proceeding.

Again, contact our firm now at 215-943-3296 for an aggressive defense on your unpaid tax liabilities.  You may also contact us at rcocpa@erols.com.  Our office is open seven days a week and you may call as late as you wish.

First-Time Homebuyers Tax Credit — First-time homebuyers should begin planning now to take advantage of a new tax credit available for a limited time. The credit applies to primary home purchases between April 9, 2008, and June 30, 2009.  Normally, this tax credit must be paid back in equal payments over 15 years. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. First-time homebuyers are those who have not owned a home in the three years prior to a purchase.

Real Estate Tax Deduction — There is an additional standard deduction for those who don’t itemize their deductions, but pay real estate taxes. The additional deduction amount is equal to the amount of real estate taxes paid up to $500 for single filers or up to $1,000 for joint filers. This deduction is available for the 2008 and 2009 tax years and increases your standard deduction.

Tuition and Fees Deduction — You may be able to deduct qualified tuition and required enrollment fees up to $4,000 that you pay for yourself, your spouse or a dependent. You do not have to itemize to take this deduction. However, a taxpayer cannot take both the tuition and fees deduction and education credits (Hope & Lifetime Learning Credits) for the same student in the same year. Income limits and other special rules apply to each of these provisions. To determine whether your expenses are qualified, refer to IRS Publication 970, Tax Benefits for Education. The 2008 edition is available soon online. This publication also describes other education-related tax benefits. 

Educators’ Out of Pocket Expense Deduction — The educator expense deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom. Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school. Worth up to $250, the educator expense deduction is available whether or not the educator itemizes deductions on Schedule A.

Recovery Rebate Credit — If you did not qualify or did not receive the maximum amount for the 2008 economic stimulus payment you may be entitled to a recovery rebate credit when you file your 2008 tax return. Review the tax return filing instructions including the recovery rebate credit worksheet. You need to know the amount of the payment you received in 2008, which can be found on your Economic Stimulus Payment Notice (Notice 1378). Two online tools on IRS.gov will be available soon — the Recovery Rebate Credit Calculator will help taxpayers figure the amount they should claim on their 2008 tax return, and How Much Was My 2008 Stimulus Payment? helps you determine what your stimulus payment was.

New Rules for “Cash” Charitable Contributions — Since tax year 2007, to deduct any charitable donation of money, you must have a bank record, credit card statement or a written communication from the recipient showing the name of the organization and the date and amount of the contribution. In determining what may be deducted as a charitable contribution, see IRS Publication 526 for 2008 to be released in the near future.

Earned Income Tax Credit (EITC) — This credit is offered by the federal government to working families and individuals. You may qualify for the earned income tax credit, or EITC, if you worked, but did not earn a lot of money. EITC is a refundable tax credit meaning you could qualify for a tax refund even if you did not have federal income tax withheld. If you qualify, the amount of your EITC will depend on whether you have children, the number of children you have, and the amount of your wages and income. For more information, go to www.irs.gov/eitc or see IRS Publication 596 for 2008.

Record keeping — Are your tax records organized? The IRS encourages taxpayers to take the time now to gather and organize their records to reduce stress at tax time. For tips, see Publication 552, Record keeping for Individuals, for 2008.  

Electronic Filing — The IRS encourages taxpayers to consider e-filing their tax returns. Nearly 90 million returns were filed electronically this year, accounting for about 58 percent of all filers. E-filing is easy, safe and accurate. The fastest way for you to receive a tax refund is to use IRS e-file and choose direct deposit. You can receive your refund in as little as ten days with IRS e-file and direct deposit. The error rate of an e-filed return is less than 1 percent compared to 20 percent for a paper tax return. IRS e-file is the most efficient way to prepare your taxes, particularly taking into consideration the 2008 tax law changes. About 70 percent of taxpayers can prepare and file electronically for free when they enter through IRS.gov and use Free File.

Tax Forms and Publications — Tax forms and publications can be accessed on this Web site or requested by calling the IRS toll-free at 1-800-TAX-FORM (1-800-829-3676).

Beware of Bogus E-mails — The IRS does not send unsolicited e-mails about your taxes. If you get an e-mail that appears to be from the IRS, it may be an attempt to steal your private information. Don’t click on any links in the message. Rather, forward the e-mail to phishing@irs.gov using the instructions at www.irs.gov.

IRS.gov Web site — Remember to use .gov when seeking the genuine IRS Web site. The address of the official IRS Web site is www.irs.gov. The IRS Web site contains a wealth of information for your tax planning and filing needs. Check out the latest tax changes on the site, and remember to e-file your tax return, which helps ensure you do not miss out on any tax deductions, credits and benefits.

Planning Your Income — Some taxpayers, such as the self-employed, may have some discretion regarding when they receive income. Properly deferring income until next year can lower your taxable income and tax bill this year. This strategy will, however, raise your tax bill next year. Publication 334, Tax Guide for Small Business, may be of help. And many taxpayers also have some control over their income via the sale of investments to incur a gain or loss. This is generally a key area of decision-making for investors. These decisions must be made and executed by Dec. 31 to be counted on a 2008 tax return. Publication 550, Investment Income and Expenses, for 2008, explains the rules.

Retirement Savings — Taxpayers have various options to save for retirement. You need to be mindful of their contribution deadlines and limits. For example, Dec. 31 is the deadline for contributions to a 401(k) plan, while April 15 is the deadline for IRA contributions. Taxpayers can get help from their 401(k) plan administrators where they work. Publication 560, Retirement Plans for Small Business, and Publication 575, Pensions and Annuity Income, may also help. You have more time to make contributions to individual retirement arrangements (IRAs) for a given tax year. You generally have until April 15 of the following year. Publication 590, Individual Retirement Arrangements, for 2008, can answer most questions.

New children — If you had or adopted a child in 2008, you should get a Social Security number for that child as soon as possible to ensure that you can include the child as a dependent on your 2008 return. Also, having or adopting a child in 2008 may mean you will receive a larger recovery rebate credit.

Call Bob almost anytime at 215.943.3296 should you have any questions or wish to make an appointment

Interest rates for the calendar quarter beginning Jan. 1, 2009, will drop by one percentage point. For more on the rates and a link to the Revenue Ruling, see news release IR-2008-139.

On Thursday, Congress passed a waiver of the minimum distribution rule for 2009, but not for 2008, for employer-provided qualified retirement plans and individual retirement accounts and annuities in H.R. 7327, the Worker, Retiree, and Employer Recovery Act of 2008. President Bush is expected to quickly sign it.

The Treasury Department is studying whether to provide relief with regard to 2008 minimum distributions.

The 2009 minimum distribution relief applies to lifetime distributions to employees and IRA owners and after-death distributions to beneficiaries, and is effective for calendar years beginning after Dec. 31, 2008. However, it doesn’t apply to any required minimum distribution for 2008 permitted to be made in 2009 by reason of an individual’s required beginning date being April 1, 2009.

The bill also makes a number or technical corrections to the Pension Protection Act of 2006. Among the most significant are:

– A technical correction provision providing that a rollover from a Roth designated account in a tax-qualified retirement plan or tax-sheltered annuity to a Roth IRA isn’t subject to the gross income inclusion and adjusted gross income conditions.

– Effective for plan years beginning after Dec. 31, 2009, rollovers by nonspouse beneficiaries are generally subject to the same rules as other eligible rollovers.

– The transition rule for minimum funding rules for single-employer defined-benefit plans is extended to plans beginning after 2008, even if, in each preceding plan year after 2007, the plan’s shortfall amortization base was not zero. Other changes in response to the economic crisis include temporary modification of the application of limitation on benefit accruals, a temporary delay of designation of multi-employer plans in endangered or critical status, and a temporary extension of the funding improvement and rehabilitation periods for multi-employer pension plans in critical and endangered status for 2008 or 2009.

– The civil penalty for failure to timely file a partnership return is increased to $89 from $85 per partner for each month (or fraction of a month) that the failure continues, up to a maximum of 12 months for returns required to be filed after Dec. 31, 2008. A $4 increase to $89 per return was also made for the penalty for failure to file S corporation returns

By WebCPA Staff