Did you know that millions of “unclaimed’ dollars are turned over to your State Treasury every year?  Statutes require businesses to remove unclaimed assets annually from their financial records and transfer the property to the Unclaimed Property Program.

Individuals may check state records for Unclaimed Property by simply logging-on to your state website:

     Alabama State Treasury site:         www.moneyquestalabama.com

     Florida State Treasury site:            www.fltreasurehunt.org

     Mississippi State Treasury site:     www.treasury.state.ms.us/Unclaimed/

            Or, search the internet for a link to your state’s unclaimed property site.

Instructions are basic and easy to follow.  After entering your last name, it is often helpful to type only the beginning character of your first name, such as SMITH B, or no beginning character at all.  By doing so, you will widen your search.

Should you find Unclaimed Property that is yours, simply check the appropriate boxes to file your claim.  Enter the required data and print a copy for your records before you submit the form.  If you have any questions, call the information number shown on the state search page, or contact our office.

If you are a business owner, please remember that state Unclaimed Property Acts require businesses to report unclaimed property annually.  If you own a business and are uncertain of your legal responsibility to identify and report unclaimed assets, let us know.  We will provide the instructions and forms necessary for reporting and remitting unclaimed property for your state.

Please call Lawrence & Lawrence, PC at (251) 476-7685 and ask for Mickey Parish, at Extension 282, or email Mickey at mparish@llcpa.com if you have any questions or would like our assistance.  We would be happy to check with the office of your State Treasurer on your behalf or assist your business.

Good luck in your search.

Federal law regulates written communications regarding federal tax matters between our firm and our clients.  Accordingly, matters discussed in this website newsletter are not intended to be used, and cannot be used, for the purpose of avoiding any tax penalties that may be subsequently imposed relating to matters discussed herein.

Alabama employers may qualify for a new tax credit for new hires after 06/09/11.

A $1,000 tax credit is available to Alabama small business employers (those with 50 or fewer employees as of 01/01/11) that create new jobs paying more than $10 per hour.  The credit is available to the employer for each employee hired after 06/09/11 whose pay rate is in excess of $10.00 / hour, and who continues to be employed for a 12-month consecutive period.  The credit will be claimed by the employer in the year in which the employee reaches his/her 12th consecutive month of employment.

In subsequent tax years, the employer must have a net increase in the number of employees for the year in order to qualify for the credit.  For example, if the employer claimed $2,000 credit in the first tax year (for two new hires), then the credit would only be available in the second tax year if the total number of employees increased by at least three over the prior year.

For more information on this credit, please contact Scott Herman at sherman@llcpa.com.

Federal law regulates written communications regarding federal tax matters between our firm and our clients.  Accordingly, matters discussed in this website newsletter are not intended to be used, and cannot be used, for the purpose of avoiding any tax penalties that may be subsequently imposed relating to matters discussed herein.

 

As of 01/01/2011, you will no longer be able to use a paper coupon (Form 8109--Federal Tax Deposit Coupon) to deposit federal taxes directly to an authorized bank.

Instead, you will need to make deposits by telephone or online using the Electronic Federal Tax Payment System (EFTPS). This means that after 12/31/2010, all federal tax deposits (including deposits of federal employment and unemployment taxes, corporate income taxes, tax exempt organization unrelated business income taxes, private foundation excise taxes, back-up withholding, and excise taxes) must be made using EFTPS.

Before you can deposit taxes using EFTPS, you must enroll either online at www.eftps.gov or by completing Form 9779 (EFTPS-Business Enrollment Form) and mailing it to the EFTPS enrollment center. However, we recommend enrolling online as it is more convenient and much quicker than filing Form 9779. (You can expect to receive online confirmations in 15 business days, compared to the 10 weeks sometimes required for paper applications.)

To enroll online, you will need to have the following information available:

• Employer Identification Number (EIN).
• Banking account number and routing number.
• Business name, address, and phone number as it appears on IRS tax documents.

When the enrollment process is completed, you will receive two separate mailings. One will have a confirmation/update form and a step-by-step instruction booklet. The other will be a letter that includes an enrollment trace number, a personal identification number (PIN), and instructions on how to obtain an Internet password. Upon receiving the PIN, you may begin making payments by phone. To make payments online you will need to first follow the instructions and obtain an Internet password.

We know change can be difficult. Fortunately, using EFTPS has its benefits. Payments can be made 24 hours a day, 365 days a year, and they can be scheduled up to 120 days in advance of the desired payment date. EFTPS also provides a confirmation number, called an –EFT Number, which guarantees that the tax deposit has been scheduled and allows the transaction to be traced if necessary. The IRS claims that errors resulting in penalties are 31 times less likely for businesses using EFTPS.

Enrolling in EFTPS is not difficult, but it does take a while for the processing to be completed (about 15 days for online enrollment and up to 10 weeks for paper enrollment). Since 01/01/2011 will be here before you know it, you’ll want to enroll as soon as possible.

Please contact Lisa Bryant at lbryant@llcpa.com if you have any questions or need assistance.

Federal law regulates written communications regarding federal tax matters between our firm and our clients.  Accordingly, matters discussed in this website newsletter are not intended to be used, and cannot be used, for the purpose of avoiding any tax penalties that may be subsequently imposed relating to matters discussed herein.

Your business may be entitled to a Federal health care tax credit included in the Patient Protection and Affordable Care Act of 2010.

The Federal health care tax credit provides an income tax credit of up to 35% of the eligible premium payments made by an employer.  You may be eligible for the credit if:

1. You have less than 25 full-time equivalent (FTE) employees 
2. The average annual gross wages for eligible employees ( all employees except owners, relatives of owners and seasonal employees working less than 120 days) are less than $50,000 and
3. You pay a uniform percentage (at least 50%) of the premium cost for each employee enrolled in the plan.

The credit phases out if you have more than 10 FTE employees and average annual gross wages in excess of $25,000.  The amount of premium payments eligible for the credit is also subject to limitation based on the average premium for the "small group market", as determined annually by the Secretary of Health and Human Services, and must be reduced for any state credits or subsidies.  The annual small group market premium for 2010 for Alabama is $4,441 for single coverage and $11,275 for family coverage. 

For example, assume ABC, Inc. has 19 FTE employees with an average gross wage of $34,000, and pays $54,000 premiums in 2010 ($3,000 for single coverage and $6,000 for family coverage for each employee in the plan).  ABC also receives a $3,000 health care credit from the state for 2010.  ABC's health care credit for 2010 would be $726.

If you think your company may qualify for this credit and would like more information, please contact Scott Herman at sherman@llcpa.com

Federal law regulates written communications regarding federal tax matters between our firm and our clients.  Accordingly, matters discussed in this website newsletter are not intended to be used, and cannot be used, for the purpose of avoiding any tax penalties that may be subsequently imposed relating to matters discussed herein.

Your business may be eligible for an Alabama tax deduction for hiring and retaining previously unemployed persons.

The Alabama Reemployment Act will provide a deduction for hiring and retaining previously unemployed persons for a twelve month period.  For any new hires between January 1, 2010 and December 31, 2011, you must certify the unemployment status of the employee at the date of hire. 

Such certification can be in any form which includes the employee's name and Social Security number, the employee's hire date, a statement that the employee was drawing unemployment or that the benefits had expired at the time hired, and the employee's signature.  Such certification should be done on the employee's hire date or as soon thereafter as possible.

The previously unemployed employee must be continually employed by you as a full time employee (working at least 37.5 hours per week) for a twelve month period to qualify for the following deduction:

• 50% of gross wages paid to the employee for the twelve months, if the employee's pay rate is $14.00 per hour or higher.
• 40% of gross wages paid to the employee for the twelve months, if the employee's pay rate is between $12.00 and $14.00 per hour.
• 35% of gross wages paid to the employee for the twelve months, if the employee's pay rate is between $10.00 and 12.00 per hour.
• No deduction is available for employees earning less than $10.00 per hour.

 As you can see, any deductions under this Act will not be reportable until 2011 and 2012, one year after the hire date of each eligible employee.  However, you will need to start accumulating the necessary certifications now.

If you think your company may qualify for this deduction and would like additional information, please contact Scott Herman at sherman@llcpa.com.

Federal law regulates written communications regarding federal tax matters between our firm and our clients.  Accordingly, matters discussed in this website newsletter are not intended to be used, and cannot be used, for the purpose of avoiding any tax penalties that may be subsequently imposed relating to matters discussed herein.

Your business may be entitled to the additional Alabama health insurance premium deduction included in the Alabama Small Business Health Insurance Premium Deduction Act which became effective January 1, 2009.

The Alabama Small Business Health Insurance Premium Deduction Act provides an additional deduction for both the employer and the employee.  The employer's additional deduction is equal to 100%** of the eligible premium payments made by the employer for qualified employees, and the qualified employee's deduction is equal to 100%** of the eligible premium payments withheld from the employee's paycheck or paid through a cafeteria plan.  You and certain employees may be eligible for the additional deductions if:

1. You have less than 25 full-time employees
2. You pay health insurance premiums for qualified employees.
3. A qualified employee is one who is an Alabama resident working full time, who earns no more than $50,000 in wages (total from all employers for 2011) and reports no more than $75,000 in adjusted gross income (AGI) on their 2011 Alabama individual income tax return (or $150,000 if married and filing a joint return).

For example, assume that ABC, Inc has 20 full time employees on 12/31/11, and that the Company pays group health insurance premiums of $3,000 for each employee.  Prior the the Act, ABC’s health insurance deduction would be $60,000 for 2011.  If 10 of those full time employees are qualified employees, then ABC can deduct an additional $30,000 (10 x $3,000 x 100%) on its 2011 Alabama income tax return under the new law.  This would result in an Alabama income tax savings of approximately $1,500 to ABC, Inc. for 2011.   The 10 qualified employees would also be entitled to deduct an additional 100% of the premiums they paid (either through withholdings or through a cafeteria plan) as a reduction in gross income on their Alabama income tax return in addition to the 100% they report as itemized deductions.

** 100% effective for tax years beginning after December 31, 2010 and 50% for tax years beginning in 2009 or 2010.

If you think your company may qualify for this deduction and would like more information, please contact Scott Herman at sherman@llcpa.com.

Federal law regulates written communications regarding federal tax matters between our firm and our clients.  Accordingly, matters discussed in this website newsletter are not intended to be used, and cannot be used, for the purpose of avoiding any tax penalties that may be subsequently imposed relating to matters discussed herein.

The IRS has released much-anticipated temporary and proposed regulations on the capitalization of costs incurred for tangible property. They impact how virtually any business writes off costs that repair, maintain, improve or replace any tangible property used in the business, from office furniture to roof repairs to photocopy maintenance and everything in between. They apply immediately, to tax years beginning on or after January 1, 2012.

The IRS has released much-anticipated temporary and proposed regulations on the capitalization of costs incurred for tangible property. They impact how virtually any business writes off costs that repair, maintain, improve or replace any tangible property used in the business, from office furniture to roof repairs to photocopy maintenance and everything in between. They apply immediately, to tax years beginning on or after January 1, 2012.

These so-called “repair regulations” are broad and comprehensive. They apply not only to repairs, but to the capitalization of amounts paid to acquire, produce or improve tangible property. They are intended to clarify and expand existing regulations, set out some bright-line tests, and provide some safe harbors for deducting payments.

The regulations are an ambitious effort to address capitalization of specific expenses associated with tangible property. The regulations affect manufacturers, wholesalers, distributors, and retailers—everyone who uses tangible property, whether the property is owned or leased. The rules provide a more defined framework for determining capital expenditures.

Most taxpayers will have to make changes to their method of accounting to comply with the temporary regulations and will need to file Form 3115. Taxpayers who filed for a change of accounting method following the issuance of the 2008 proposed regulations will probably have to change their accounting method again.

The IRS has promised to issue two revenue procedures that will provide transition rules for taxpayers changing their method of accounting, including the granting of automatic consent to make the change. The regulations require taxpayers to make a Code Sec. 481(a) adjustment; this means that taxpayers will have to apply the regulations to costs incurred both prior to and after the effective date of the regulations.

The new regulations provide rules for materials and supplies that can be deducted, rather than capitalized. The rules provide several methods of accounting for rotable and temporary spare parts, and allow taxpayers to apply a de minimis rule so that they can deduct materials and supplies when they are purchased, not when they are consumed.

Costs to acquire, produce or improve tangible property must be capitalized. The regulations address moving and reinstallation costs, work performed prior to placing property into service, and transaction costs. Generally, costs of simply removing property can be deducted, but costs of moving and then reinstalling property may have to be capitalized.

To determine whether a cost incurred for property is an improvement, it is necessary to determine the unit of property. Generally, the larger the unit of property, the easier it is to deduct expenses, rather than have to capitalize them. The regulations provide detailed rules for determining the unit of property for buildings and for non-building tangible property. For buildings, the IRS identified eight component systems as separate units of property, requiring more costs to be capitalized. However, the new rules also provide for deducting the costs of property taken out of service, by treating the retirement as a disposition.

The new regulations require virtually every business to review how repairs, maintenance, improvements and replacements are handled for tax purposes, with both mandatory and optional adjustments made to past treatment as appropriate.

Please feel free to call this office for a more targeted explanation of how these new regulations impact your business operations.

The fate of the employee-side payroll tax cut along with a host of tax extenders and other expired provisions could be decided in coming weeks. A conference committee of House and Senate members is negotiating a full-year extension of the payroll tax cut and could add some or all of the tax extenders to a final package. Lawmakers also could extend the payroll tax cut without acting on any tax incentives.

The fate of the employee-side payroll tax cut along with a host of tax extenders and other expired provisions could be decided in coming weeks. A conference committee of House and Senate members is negotiating a full-year extension of the payroll tax cut and could add some or all of the tax extenders to a final package. Lawmakers also could extend the payroll tax cut without acting on any tax incentives.

Payroll tax cut

The Temporary Payroll Tax Cut Continuation Act of 2011 extended the employee-side OASDI tax cut through the end of February 2012. The employee-share of OASDI taxes is 4.2 percent for the two-month period, rather than 6.2 percent. The employer-share of OASDI taxes remains at 6.2 percent for the two month period. Self-employed individuals also benefit from a two percentage point reduction in OASDI taxes.

Unless extended, the employee-share of OASDI taxes is scheduled to revert to 6.2 percent after February 29, 2012. The White House and the leaders of the two parties in Congress agree that the payroll tax cut should be extended a full-year. They disagree, however, how to pay for the extension; even if it should be paid for at all.

Congress could extend the two-month payroll tax cut through the end of 2012 without paying for it. The 2011 payroll tax cut was unfunded. Congress appropriated to the Social Security trust funds amounts equal to the reduction in payroll tax revenues. The 2011 payroll tax cut was estimated by the Congressional Budget Office cost approximately $111 billion. Extending it through the end of 2012 is estimated to cost just as much if not more.

House Republicans reportedly have proposed a number of revenue raisers to offset the cost of extending the payroll tax cut through the end of 2012. One GOP proposal would extend the current pay freeze for employees of the federal government. Another GOP proposal would require higher-income individuals to pay increased Medicare premiums.

One possible revenue raiser, increasingly under discussion by Democrats, is a change in the taxation of so-called carried interest. Current law generally taxes carried interest as capital gains and not as ordinary income. Past efforts to change the tax treatment of carried interest have failed to pass Congress.

Extenders

The so-called tax extenders, popular but temporary tax provisions, expired at the end of 2011. Many taxpayers are surprised to learn that their particular tax break, whether it be the state or local sales tax deduction, the teachers’ classroom expense deduction, or the research tax credit, are temporary. The extenders have been routinely revived many times in the past. This year, however, could be different. Faced with record federal budget deficits, lawmakers may decide to extend only some of the expired provisions.

President Obama’s FY 2013 proposals

President Obama is expected to release his fiscal year (FY) 2013 federal budget proposals in early February, which will reignite debate over the Bush-era tax cuts. President Obama is expected to urge Congress to allow the Bush-era tax cuts to expire after 2012 for higher-income taxpayers, which President Obama defines as individuals earning more than $200,000 or families earning more than $250,000. In recent weeks, there has been speculation that President Obama may revisit those definitions in his FY 2013 budget, possibly raising the amounts.

Few Capitol Hill observers expect Congress to take any action on the Bush-era tax cuts before the November elections. Instead, Congress may take up some of President Obama’s other proposals. As in past budgets, President Obama will likely propose to extend some energy tax breaks for individuals and businesses, extend tax incentives for education and provide some targeted-tax breaks to businesses. President Obama has also promised to introduce proposals to encourage U.S. companies to “insource” jobs at home.

On some issues, such as energy and education, lawmakers may find common ground but negotiations are likely to go down to the wire. Our office will keep you posted of developments.

If you have any questions about the payroll tax cut, tax extenders or the various tax proposals under discussion, please contact our office.

The IRS reopened its offshore voluntary disclosure program in early 2012 in response to what the government described as strong interest among taxpayers. The reopened program, the third of its type in recent years, encourages taxpayers with unreported foreign accounts to make full disclosures in exchange for a reduced penalty framework. Like its predecessors, the terms and conditions of the reopened program are very complex. The IRS has promised to provide more details. In the meantime, the prior offshore disclosure programs are guides to how the IRS intends to implement the third, reopened program.

The IRS reopened its offshore voluntary disclosure program in early 2012 in response to what the government described as strong interest among taxpayers. The reopened program, the third of its type in recent years, encourages taxpayers with unreported foreign accounts to make full disclosures in exchange for a reduced penalty framework. Like its predecessors, the terms and conditions of the reopened program are very complex. The IRS has promised to provide more details. In the meantime, the prior offshore disclosure programs are guides to how the IRS intends to implement the third, reopened program.

Previous disclosure programs

The IRS launched two previous offshore disclosure initiatives: one in 2009 and another in 2011. Both programs offered reduced penalties in exchange for full disclosure. In early 2012, the IRS reported it received 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. The government has collected over $4.4 billion from the 2009 and 2011 programs. The IRS predicted it will collect more revenue as it continues to work cases.

Reopened program

The reopened program operates very similarly to the 2009 and 2011 programs but with some key differences. The previous programs were temporary. The 2011 program ended in mid-September 2011. The reopened program has no set end date. The IRS cautioned, however, that it could close the program at some future date. The decision to end the program is solely at the discretion of the IRS.

The reopened program requires taxpayers to file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as pay accuracy-related and/or delinquency penalties. Additionally, taxpayers must pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. In comparison, the highest penalty in the 2011 program was 25 percent. IRS officials have said that the penalty was increased because the agency does not want to reward taxpayers who did not participate in the 2009 or 2011 disclosure programs because they anticipated that a future penalty would be lower.

In limited circumstances, taxpayers may qualify for a 12.5 percent penalty or a five percent penalty. Generally, taxpayers whose offshore accounts or assets did not surpass $75,000 in any calendar year may qualify for the 12.5 percent penalty.

The requirements for the five percent penalty are very narrow. The IRS has explained that taxpayers must meet four conditions: (1) The taxpayer did not open or cause the account to be opened; (2) the taxpayer exercised minimal, infrequent contact with the account, for example, to request the account balance, or update account holder information such as a change in address, contact person, or email address; (3) except for a withdrawal closing the account and transferring the funds to an account in the United States, the taxpayer did not withdraw more than $1,000 from the account in any year for which the taxpayer was non-compliant; and (4) the taxpayer can show that all applicable U.S. taxes have been paid on funds deposited to the account (only account earnings have escaped U.S. taxation).

The penalty amounts in the reopened program are not set in stone, the IRS cautioned. It may eventually increase penalties in the program for all or some taxpayers or defined classes of taxpayers.

Quiet disclosures

One goal of the three programs is to caution taxpayers against so-called “quiet disclosures.” A quiet disclosure occurs when a taxpayer files an amended return and pays any tax delinquency without making a formal voluntary disclosure. The IRS warned taxpayers making quiet disclosures that they risked being sanctioned to the fullest extent allowed by law.

Critics

The offshore disclosure programs were not without their critics. The National Taxpayer Advocate recently told Congress that the IRS should streamline what is a very complicated process. The National Taxpayer Advocate also reported that IRS examiners were assuming that all violations were willful unless a taxpayer presented evidence to the contrary. It is possible that the IRS may revisit some of the terms and conditions of the reopened program in light of the National Taxpayer Advocate’s report.

If you have any questions about the reopened offshore voluntary disclosure program, please contact our office.

Taxpayers with children should be aware of the numerous tax breaks for which they may qualify. Among them are: the dependency exemption, child tax credit, child care credit, and adoption credit. As they get older, education tax credits for higher education may be available; as is a new tax code requirement for employer-sponsored health care to cover young adults up to age 26. Employers of parents with young children may also qualify for the child care assistance credit.

Taxpayers with children should be aware of the numerous tax breaks for which they may qualify. Among them are: the dependency exemption, child tax credit, child care credit, and adoption credit. As they get older, education tax credits for higher education may be available; as is a new tax code requirement for employer-sponsored health care to cover young adults up to age 26. Employers of parents with young children may also qualify for the child care assistance credit.

Dependency Exemption

In addition to the personal exemption an individual taxpayer may take for him or herself to reduce taxable income (Line 42 on Form 1040), that taxpayer may also take an exemption for each qualifying dependent who has lived with the taxpayer for more than half of the tax year. A dependent may be a natural child, step-child, step-sibling, half-sibling, adopted child, eligible foster child, or grandchild, and generally must be under age 19, a full-time student under age 24, or have special needs. The amount of the exemption is the same as the taxpayer’s personal exemption, $3,700 for the 2011 tax year and $3,800 for the 2012 tax year.

Child Tax Credit

Parents of children who are under age 17 at the end of the tax year may qualify for a refundable $1,000 tax credit. The credit is a dollar-for-dollar reduction of tax liability, and may be listed on Line 51 of Form 1040. For every $1,000 of adjusted gross income above the threshold limit ($110,000 for married joint filers; $75,000 for single filers), the amount of the credit decreases by $50.

Child and Dependent Care Credit

If a taxpayer must pay for childcare for a child under age 13 in order to pursue or maintain gainful employment, he or she may claim up to $3,000 of his or her eligible expenses for dependent care. If one parent stays home full-time, however, no child care costs are eligible for the credit.

Adoption Credit

Taxpayers who have incurred qualified adoption expenses in 2011 may claim either a $13,360 credit against tax owed or a $13,360 income exclusion if the taxpayer has received payments or reimbursements from his or her employer for adoption expenses. For 2012, the amount of the credit will decrease to $12,650, and in 2013 to $5,000.

Higher Education Credits

There are two education-related credits available for 2012: the American Opportunity credit and the lifetime learning credit. The American Opportunity credit amount is the sum of 100 percent of the first $2,000 of qualified tuition and related expenses plus 25 percent of the next $2,000 of qualified tuition and related expenses, for a total maximum credit of $2,500 per eligible student per year. The credit is available for the first four years of a student's post-secondary education. The credit amount phases out ratably for taxpayers with modified AGI between $80,000 and $90,000 ($160,000 and $180,000 for joint filers). The lifetime learning credit is equal to 20 percent of the amount of qualified tuition expenses paid on the first $10,000 of tuition per family. The phaseout for 2012 ranges from $52,000 to $62,000 ($104,000 to $124,000 for joint filers). Parents also find tax relief in saving for college though Coverdell accounts, section 529 plans and specified U.S.. savings bonds.

Extended Health Care Coverage

Effective since September 23, 2010, the new health care law requires plans to provide coverage for children until they attain age 26. Further, effective on or after March 30, 2010, children under the age of 27 are considered dependents of a taxpayer for purposes of the general exclusion from income for reimbursements for medical care expenses of an employee, spouse, and dependents under an employer-provided accident or health plan. Therefore, a plan must provide coverage to a child who is still a dependent up to age 26; but can do so up to age 27 without income tax consequences. A child includes a son, daughter, stepson, or stepdaughter of the taxpayer; a foster child placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction; and a legally adopted child of the taxpayer or a child who has been lawfully placed with the taxpayer for legal adoption.

Child Care Assistance Credit (for businesses)

Employers may take up to $150,000 of the eligible costs of providing employees with child care assistance as tax credit. These costs may include a portion of the costs of acquiring, constructing, improving, and operating a child care facility.

If you have any questions about these provisions and how they may benefit you, please contact our office.

The Treasury Department is authorized to offset a taxpayer’s tax refund to satisfy certain debts. A spouse who believes that his or her portion of the refund should not be used to offset the debt that the other spouse owes may request a refund from the IRS.

The Treasury Department is authorized to offset a taxpayer’s tax refund to satisfy certain debts. A spouse who believes that his or her portion of the refund should not be used to offset the debt that the other spouse owes may request a refund from the IRS.

Offset

If an individual owes money to the federal government because of a delinquent debt, the Treasury Department’s Financial Management Service (FMS) can offset that individual's tax refund (and certain other federal payments) to satisfy the debt. The debtor will be notified in advance of the offset.

A taxpayer’s refund may be reduced by FMS and offset to pay:

• Past-due child support
• Federal agency non-tax debts
• State income tax obligations, or
• Certain unemployment compensation debts owed a state.

FMS advises taxpayers by written notice of an offset. FMS has explained that the notice will reflect the original refund amount, the taxpayer’s offset amount, the agency receiving the payment, and the address and telephone number of the agency. FMS will notify the IRS of the amount taken from your refund.

Form 8379

If a taxpayer filed a joint return and is not responsible for the debt of his or her spouse, the taxpayer may request his or her portion of the refund by filing Form 8379, Injured Spouse Allocation, with the IRS. Form 8379 may be filed with the original return or by itself after the taxpayer is aware of the offset.

The IRS has instructed taxpayers filing Form 8379 by itself to attach a copy of all Forms W-2 and W-2G for both spouses, and any Forms 1099 showing federal income tax withholding to Form 8379. Failure to attach these items may result in a delay in processing by the IRS.

The IRS has reported on its website that it generally processes Forms 8379 that are filed after a joint return has been filed in approximately eight weeks. The timeframe for processing a Form 8379 that is attached to a joint return is approximately 11 weeks (14 weeks if the joint return is filed on paper).

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of February 2012.

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of February 2012.

February 1

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates January 25–27.

February 3

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates January 28–31.

February 8

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 1–3.

February 10

Employees who work for tips. Employees who received $20 or more in tips during November must report them to their employer using Form 4070.

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 4–7.

February 15

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 8–10.

Monthly depositors. Monthly depositors must deposit employment taxes for payments in January.

February 17

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 11–14.

February 23

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 15–17.

February 24

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 18–21.

February 29

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 22–24.

March 2

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 25–28.

March 7

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 29–March 2.