Thursday, July 20, 2017

Streamlined Processing of Installment Agreements


The IRS is testing expanded criteria for streamlined processing of taxpayer requests for installment agreements. The test is scheduled to run through September 30, 2017.
During this test, more taxpayers will qualify to have their installment agreement request processed in a streamlined manner. Based on test results, the expanded criteria for streamlined processing of installment agreement requests may be made permanent.
During the test, expanded criteria for streamlined processing will be applied to installment agreement requests submitted to SB/SE Campus Collection Operations, this includes the Automated Collection System (ACS). Expanded criteria will not be applied to installment agreement requests submitted to W&I Accounts Management, SB/SE Field Collection or through the Online Payment Agreement application.
One expanded criterion being tested immediately is this: Individual taxpayers with an assessed balance of tax, penalty and interest between $50,000 and $100,000 may experience accelerated processing of their installment agreement request. This will occur if the taxpayers' proposed monthly payment is the greater of their total assessed balance divided by 84 – or – the amount necessary to fully satisfy the liability by the Collection Statute Expiration Date.
For individual taxpayers who have filed all required returns and have an assessed balance of tax, penalties and interest of $50,000 or less,
 
CURRENT Streamlined CRITERIA
TEST CRITERIA
Payment Terms
Up to 72 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less
Payment Terms
None. This criteria is unchanged.
Collection Information Statement
Verification of ability to pay required in event of an earlier default for assessed balances of $25,001 to $50,000
Collection Information Statement
Not required.
Payment Method
Direct debit payments or payroll deduction required for assessed balances of $25,001 to $50,000
Payment Method
Direct debit payments or payroll deduction is preferred, but not required.
Notice of Federal Tax Lien
Determination not required for assessed balances up to $25,000.
Determination is not required for assessed balances of $25,001 - $50,000 with mandatory use of direct debit or payroll deduction agreement.
Note: If taxpayer does not agree to direct debit or payroll deduction, then they do not qualify for Streamlined IA over $25,000.
Notice of Federal Tax Lien
No change in criteria for assessed balances up to $25,000. 
Determination is not required for assessed balances of $25,001 - $50,000 with the use of direct debit or payroll deduction agreement.
Note: If taxpayer does not agree to direct debit or payroll deduction, then they do qualify for Streamlined IA over $25,000, but a Notice of Federal Tax Lien determination will be made.
The test criteria discussed above also applies to all out of business debts up to $25,000 and all out of business sole-proprietorship debts up to $50,000. For in-business taxpayers, test criteria apply to income tax only debts up to $25,000.
For individual taxpayers who have filed all required returns and have an assessed balance of tax, penalties and interest between $50,001 and $100,000,
CURRENT CRITERIA
TEST CRITERIA CHANGES
None - Streamlined processing criteria currently does not apply to assessed balances of tax between $50,001 and $100,000
 
Payment Terms
Up to 84 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less
 
Collection Information Statement
Not required if the taxpayer agrees to make payment by direct debit or payroll deduction
 
Payment Method
Direct debit payments or payroll deduction is not required; however, if one of these methods is not used, then a Collection Information Statement is required.
 
Notice of Federal Tax Lien
Determination is required.
The test criteria discussed above also applies to all out of business sole-proprietorship debts between $50,001 and $100,000.
 


Monday, July 10, 2017

Return of the New Jersey Homestead Rebate


L. 2017, A5000, effective 07/04/2017, establishes homestead benefit eligibility for the 2015 tax year. The legislation provides that taxpayers who are at least 65 years of age, disabled or blind will receive a homestead benefit for the 2015 tax year of: (1) 10% of the first $10,000 of property tax paid on their residence if their New Jersey gross income was not in excess of $100,000; (2) 5% of the first $10,000 of property tax paid on their residence if their New Jersey gross income was in excess of $100,000 but not in excess of $150,000; and (3) no benefit if their New Jersey gross income is in excess of $150,000. Taxpayers who are under 65 years of age and not disabled or blind will receive a homestead benefit of: (1) 10% of the first $10,000 of property tax paid on their residence if their New Jersey gross income is not in excess of $50,000; (2) 6.67% of the first $10,000 of property tax paid on their residence if their New Jersey gross income is in excess of $50,000 but not in excess of $75,000; and (3) no benefit if their New Jersey gross income is in excess of $75,000.

Friday, July 7, 2017

IRS finalizes regulations that provide for streamlined small exempt organization application process


Since 1969, IRC §508 has required an organization seeking tax-exempt status under section 501(c)(3) to submit a properly completed and executed Form 1023, “Application for Recognition of Exemption Under 501(c)(3).

 On July 2, 2014, final and temporary regulations authorizing the Commissioner to adopt a streamlined application process that eligible organizations may use to apply for recognition of tax-exempt status under section 501(c)(3) were published in the Federal Register (79 FR 37630). The final and temporary regulations were effective and applicable on July 1, 2014. The 2014 final regulations removed and reserved certain paragraphs of the longstanding final regulations addressed by corresponding paragraphs of the new temporary regulations. Under the temporary regulations, the IRS instituted the streamlined application process on Form 1023-EZ, “Streamlined Application for Recognition of Exemption Under 501(c)(3) The detailed procedures are described in Rev. Proc. 2017-5, 2017-1 IRB 230, and in the instructions for Form 1023-EZ.

Eligibility Requirements:

An organization is an eligible organization if the organization meets all of the following criteria:

    • The organization has projected annual gross receipts of $50,000 or less in the current taxable year and the next 2 years;
    • The organization had annual gross receipts of $50,000 or less in each of the past 3 years for which the organization was in existence; and
    • The organization has total assets the fair market value of which does not exceed $250,000. For purposes of this eligibility requirement, a good faith estimate of the fair market value of the organization's assets is sufficient.

 Because the proposed regulations contemplate that guidance published in the Internal Revenue Bulletin may prescribe the information required of Form 1023-EZ filers, including regarding their proposed activities, the Department of the Treasury (Treasury Department) and the IRS have concluded that the proposed regulations are sufficiently flexible to allow such a revision to the Form 1023-EZ at a future date, as resources permit. Accordingly, this Treasury decision adopts as final regulations, without substantive change.