Fall 2009 The Magazine Of The Pennsylvania Society of Public Accountants 3 2009-2010 PA Budget - Overview of Tax Changes 3 Order Tax Season Products through PSPA and SAVE! Visit us at www.pspa-state.org PSPA Officers Paul J. Cannataro, CPA, MST, President A Message From The President Barry L. Meyer, PA, President Elect Lamont B. Anderson, PA, 1st Vice President Francis J. Cellini, EA, ABA, ATA, ATP, The autumn is in full swing and the Fall Classic 2nd Vice President Frank H. Kelly, EA, Secretary is coming up soon. As I write this letter the Phillies John J. Komarnicki, CPA. Treasurer are up two games to one and have a tough road ahead with the Dodgers. But those darn (you Board of know what I wanted to say) Yankees look like they Directors have bought themselves another World Series Donald L. Allen, CPA championship. Nevertheless think Red and Go Lamont B. Anderson, PA Phillies! Randy L. Brandt, CPA Richard Brasch, Jr., CPA This season has been particularly busy with the Gerald L. Brenneman, CPA chapter visitations. But I have enjoyed meeting W. Raymond Bucks, CPA PSPA members from around the state. The welcome provided to me has Paul J. Cannataro, CPA been overwhelming and I want to thank the chapters I have visited for M. Stephen Caskey their overwhelming support. There is no doubt in my mind what makes B. Joseph Cellini, PA PSPA a great organization. It’s our members. Francis J. Cellini, EA Arlan Christ, EA IRS is concluding their final meeting on the Return Preparer Review Maureen Christy, CPA and they should begin discussions with their various components Frank L. Corso, CPA to finalize the Bernard A. Deverson, CPA recommendations Dawn L. Douglas they will make to the Penny Erbe, EA Debra S. Eremus President and Congress. David E. Fleck, PA We will keep our James S. Frederick, PA members apprised of the William C. Graham, PA developments that will Charles J. Hafer, PA shortly be forthcoming. John P. Hassler, PA Stay tuned. Joyce P. Huttman, PA Marvin R. Huttman, CPA, CFP, MST Our ad hoc committee Mary Lew Kehm, CPA will be meeting to make Frank H. Kelly, EA recommendations Richard B. Kelly, CPA on how our By-Laws John J. Komarnicki, CPA should change to M. Michael Lerner, PA accommodate the new Barry L. Meyer, PA Brenda Milovich, CPA Regulatory Model that H. Richard Neidermyer, CPA Commissioner Shulman Thomas E. Ostrowski, CPA will be introducing. Howard Pachter, PA In closing I want to Janet Pastor, CPA Norma J. Ridder, CPA wish all of our members Linda M. Roth, CPA and their families a Timothy Sundstrom, CPA happy and healthy Barbara Thomas, CPA holiday season. Be Neil C. Trama, Jr., PA grateful for the many Daniel J. Vecchio, CPA blessings that we have as Americans. And say a Sherry L. DeAgostino, Executive Director prayer for those who are experiencing some of life’s challenges. Respectfully Submitted, Pa. Society of Public Accountants Paul J. Cannataro, CPA 20 Erford Road, Suite 200A Lemoyne, PA 17043 1(717) 737-4439 1(800) 270-3352 2 Fall 2009 In this Sign UP FOr The PSPA e-MAil DiScUSSiOn Issue ... grOUP (liSTServe) - A Message From The YOUr MOST iMPOrTAnT President .................................................. 2 TAx SeASOn reSOUrce Pennsylvania Tax Update .................. 4 NSA State Director’s Message ............ 9 geT A MeMBer – geT A SeMinAr PSPA’S 2009 MeMBerShiP recrUiTMenT cAMPAign Professional’s Corner ......................... 10 PSPA is only as strong as its members. As a RIA Federal Tax Handbook, member of PSPA you 2010 Edition ........................................... 19 understand the value of the many benefits PSPA offers; your personal Classified Ads.........................................20 endorsement is very important to us and it is the most effective way we build membership. Help us spread the word and through PSPA’s GET A MEMBER-GET A SEMINAR program you’ll receive a FREE seminar of your choice. That’s right, for recruiting just ONE new member YOU will receive a seminar of your choice, absolutely FREE. The free seminar is a $150 value…another outstanding benefit of PSPA! Additional information can be found on the PSPA website Community Accountants or by contacting 1-800-270-3352. & Tax Professionals FOr The BeST Price PUrchASe YOUr TAx PUBlicATiOnS FrOM PSPA! Discounts on technical publications including all versions of the Thomson Quickfinder Handbook, the RIA Federal Tax Handbook, the Tax Book published by Tax Materials Inc., and ALL publications offered by CCH including the U.S. Master Tax Guide, the Guide to Pennsylvania Taxes, the U.S. Master Depreciation Guide, and Express Answers. PSPA members save 30-40% off of the list price of these publications. Order forms for these products appear in this issue. 3 Fall 2009 PENNSYLVANIA TAX UPDATE 2009-2010 PA BUDgET - oVErVIEw of TAX chANgES By Sharon R. Paxton Governor Rendell signed 12.5% of taxable income. appropriation and tax bills on pit CheCkoFFS extenDeD Friday, October 9th. Unfortunately, Cni SaleS FaCtor Personal Income Tax refund although the budget reduces Weighting inCreaSeD checkoffs for Breast and Cervical spending from 2008-2009 levels, it In addition, the Corporate Net Cancer Research and for Juvenile includes a substantial tax increase for Income Tax apportionment formula Diabetes Cure Research have Pennsylvania businesses. Adjustments will be modified. The weighting for been reenacted without sunset to major corporate taxes will generate the Sales Factor will be increased dates. Checkoffs for Wild Resource an additional $300 million in fiscal year from 70% to 83% for taxable years Conservation, Organ and Tissue 2009-10 and $460 million in 2010-11. beginning after December 31, 2008, Donation Awareness and Military and to 90% for taxable years beginning Family Relief Assistance have been Capital StoCk & FranChiSe tax after December 31, 2009. extended through 2013. phaSe-out DeFerreD The Capital Stock and Franchise ManageD Care groSS pit WithholDing reMittanCe Tax (“CSFT”) rate for calendar year reCeiptS tax DeaDlineS reviSeD 2009 and tax years beginning in 2009 Effective October 1, 2009, Managed New, accelerated deadlines have is increased by 53% - from 1.89 mills Care Organizations that are party to a been established for employers to 2.89 mills (the 2008 rate). And, Medicaid managed care contract are withholding more than $20,000 the phase-out of the tax is delayed - subject to a tax of 59 mills on gross of Personal Income Tax annually. the 2.89 mill rate will apply for 2010 receipts from Medicaid managed care Beginning in June 2010, such (previously scheduled at 0.89 mills) contracts. The tax will be terminated employers will be required to remit and 2011 (previously scheduled as the if determined to be in violation of the tax on the Wednesday following first post-phase-out year). Now, the federal law. Proceeds from the tax will payday if payday falls on Wednesday- rate will be reduced to 1.89 mills in augment the capitation appropriation Friday, and to remit by the following 2012 and to 0.89 mills in 2013, with full of the Department of Public Welfare. Friday if payday is on Saturday-Tuesday. elimination in 2014. The thresholds for classification of The rate change will be slightly Cigarette & “little CigarS” filers have also been revised to annual offset by an increase in the valuation tax amounts, instead of quarterly amounts. deduction, from $150,000 to $160,000, The Cigarette Tax is expanded to effective for taxable years beginning include “Little Cigars,” and the tax FilM proDuCtion tax CreDit after December 31, 2009. rate is increased by 25 cents per pack, The amount available under the The rate increase will not be effective November 1, 2009. Special Film Production Tax Credit program factored into estimated tax payments provisions apply to retailers and other is reduced from $75 million to $42 due prior to January 1, 2010. persons in possession, on the effective million for fiscal 2009-10, then While the CSFT rate change will date, of untaxed little cigars and increased to $60 million in 2010-11. have a broad impact on Pennsylvania cigarettes on which the additional tax businesses, some will enjoy at least a has not been paid, to ensure that the r&D tax CreDit small benefit from other changes. new and additional taxes will be paid. The R&D Tax Credit provisions have Cigarette stamping agent commission been amended to eliminate the one- Cni net loSS Cap expanDeD rates are adjusted. Procedures are year holding period before a credit In one of the few bright spots in established for remittance and may be sold. However, the amounts Pennsylvania business taxes, the enforcement of tax due on unstamped available for award have been reduced Corporate Net Income Tax (“CNI”) cigarettes. by 50% for fiscal 2009-10 and 55% for Net Loss Carryforward cap is increased 2010-11. to the higher of $3 million or 15% heliCopter Sale anD of Pennsylvania taxable income repair exeMption eDuCational for taxable years beginning after Effective immediately, the sale and iMproveMent tax CreDit December 31, 2008, and to the higher use of helicopter and similar rotorcraft The amount available under the of $3 million or 20% of Pennsylvania are exempted from Pennsylvania Educational Improvement Tax Credit taxable income for taxable years sales and use tax. Repair parts and program is reduced from $75 million beginning after December 31, 2009. components, as well as installation in to $60 million in fiscal 2009-10, and The cap previously was $3 million or such craft, also are exempted. to $50 million in 2010-11. The statute 4 Fall 2009 has been amended to clarify that eligible taxes. Participants who become panel reached the same result in a where a pass-through entity transfers delinquent beyond certain parameters companion case including a leased a tax credit to its shareholders, within two years after the end of the MRI scanning system on leased members or partners, an election amnesty period will lose their penalty premises (Medical Associates of the may be made to use the credit in the and interest forgiveness under amnesty. Lehigh Valley, P.C. v. Commonwealth, year of contribution or the following Participants will waive all rights to No. 50 F.R. 2006). On August 19, year. The definition of “pass-through file a petition for refund or otherwise 2009, the Commonwealth filed entity” now explicitly includes single contest taxes reported under amnesty. exceptions to the panel decisions member limited liability companies Any taxpayer failing to report and in both of these cases. The Court treated as disregarded entities for pay an eligible tax during the amnesty recently denied the exceptions filed federal tax purposes. Credits continue period will be subject to a special, by the Commonwealth, and a further to be granted on a “first-come, first- additional 5% penalty. The 5% penalty appeal by the Commonwealth to served basis” except that if applications will not apply where a taxpayer has the Pennsylvania Supreme Court is received prior to October 1, 2009, entered into a deferred payment plan expected shortly. exceeded the allocation, such or filed an administrative or judicial This is the first time that a applications will be granted pro-rata. appeal during the amnesty period. Pennsylvania court has applied the The Department of Revenue will Sheetz test for sales tax purposes. Under other tax CreDitS publish amnesty guidelines and sample the Sheetz test, in determining whether The total amount available in 2009- forms by December 8, 2009. items that are affixed to real estate 10 under the Call Center, EIP, REAP, but can be removed without material Job Creation, Neighborhood Assistance philaDelphia SaleS injury to themselves or to the real and First Class Cities Economic tax inCreaSe estate should be treated as realty or Development District Tax Credits Effective October 8, 2009, Act personalty, the following three factors are reduced by 50%. The Alternative 44 of 2009 authorized the City of must be considered: (1) the manner in Energy Investment Credit is suspended. Philadelphia to impose an additional which the item is physically attached or 1% sales and use tax, increasing the installed, (2) the extent to which the tax aMneStY planneD For 2010 total state and local tax to 8% within item is essential to the permanent use The fiscal 2009-10 Pennsylvania the City. This increased tax rate is of a building or other improvement, budget package includes a Tax effective until June 30, 2014. and (3) the objective intention of Amnesty to be conducted from the parties regarding permanence. April 26, 2010, through June 18, MeDiCal SCanning SYSteMS Importantly, the Court rejected the 2010. The amnesty will apply to ruleD “real eState” For pa Commonwealth’s contention that an state taxes (and related interest and SaleS tax purpoSeS – realtY/ item must be essential to all possible penalties) delinquent as of June perSonaltY teSt ClariFieD uses of a building to be essential to the 30, 2009. Taxpayers who, during On July 29, 2009, a three-judge permanent use of the building. The the amnesty period, report and pay panel of the Commonwealth Court, Court also reiterated that absolute eligible delinquent taxes and 50% with one dissent, issued a decision in permanence is not required for a of applicable interest will be relieved Northeastern Pennsylvania Imaging Center fixture to become part of the real of penalties and the other 50% of v. Commonwealth, No. 635 F.R. 2007, estate. Rather, it is sufficient if the item applicable interest. In the case of clarifying the “realty v. personalty” will remain in place so long as the liabilities for which no return has test for Pennsylvania sales and use property continues to be used for its been filed or liabilities that have been tax purposes. The court applied the current purpose or until the item wears underreported on a filed return, if the principles established in In re Appeal out or becomes obsolete. taxpayer has not been contacted by of Sheetz, in which the court ruled the Revenue Department, liability for that canopies placed over gasoline legiSlative reMeDY Sought similar taxes due prior to July 1, 2004, pumps became part of the real estate to ClariFY BuSineSS will be forgiven. Only the Pennsylvania for local property tax purposes, and privilege tax liaBilitieS oF portion of IFTA fuel taxes will be ruled that MRI and PET/CT scanning ConStruCtion ContraCtorS eligible for amnesty. Payment must be systems became part of the real estate anD other ServiCe proviDerS by certified check, money order, EFT, upon installation. Therefore, the Doing BuSineSS in Multiple credit card, cash or its equivalent. imaging center was entitled to a refund loCal tax JuriSDiCtionS In addition to filing a tax amnesty of sales tax paid on its purchase of Recent court decisions have created return, participants will be required these systems, which were installed confusion concerning the scope of to file complete tax returns for all pursuant to construction contracts. a municipality’s authority to impose unfiled taxes, and to file complete In an unreported opinion issued on a business privilege tax (“BPT”) on amended returns for all underreported August 5, a majority of a three-judge construction contractors and other 5 Fall 2009 service providers doing business in business” within a taxing jurisdiction. Pleas held that the job trailer was multiple local tax jurisdictions. Senate See, e.g., Township of Lower Merion v. a “field office” which constituted Bill 601 introduced by senator Pat QED, Inc., 738 A.2d 1066 (Pa. Cmwlth. sufficient presence to support Browne would amend the Local Tax 1999), appeal denied, 775 A.2d 811 (Pa. imposition of the tax. Enabling Act to provide that a BPT 2001). Earlier court decisions had On appeal, the parties treated the on the “privilege” of doing business also established that a construction tax as one imposed on the privilege within a local taxing jurisdiction may job trailer was not generally viewed of conducting business in the city, be imposed only on taxpayers with as a “base of operations.” See, e.g., as opposed to a tax on business a “base of operations” in that taxing Northwood Construction Co. v. Township “transacted” in the city. Following a jurisdiction. Senate Bill 601 would of Upper Moreland, 856 A.2d 789 (Pa. line of cases requiring the presence also define a “base of operations” as 2004); G.A & F.C. Wagman, Inc. v. of a “base of operations” before a “an actual, physical and permanent Manchester Township, 535 A.2d 702 (Pa. company could be subjected to a place of business from which a Cmwlth. 1988). Under the Rendina “privilege-based” tax, see, e.g., QED, taxpayer manages, directs and decision, it appears that a “privilege- supra, the parties focused their controls its business activities” and based” BPT may be imposed on a arguments on whether or not the job clarify that “permanent” means “a company that conducts significant trailer should be considered a “base of building or other structure owned activities within a taxing jurisdiction operations” in the city. A divided panel or rented or used by the taxpayer whether or not it regularly maintains of the Commonwealth Court reversed that is permanently attached to the an office or other place of business and struck the tax, holding that ground via a fixed foundation or there. Exactly how much “activity” is Rendina’s jobsite trailer was not a “base similar construction and which cannot required in a local taxing jurisdiction of operations.” The city then appealed be removed without demolition to support imposition of a “privilege- to the Pennsylvania Supreme Court. or dismantling.” Various interest based” BPT is not clear. Somewhat surprisingly, the groups are supporting this proposed Pennsylvania Supreme Court legislation. renDina DeCiSion completely side-stepped the question As discussed in more detail below, in In Rendina, the Pennsylvania of whether the job trailer constituted a late 2007, the Pennsylvania Supreme Supreme Court upheld the City of “base of operations.” In fact, the court Court issued a decision in V. L. Harrisburg’s right to impose its BPT on suggested that whether a company has Rendina, Inc. v. City of Harrisburg and a contractor performing construction a “base of operations” in the taxing Harrisburg School District (“Rendina”), work, but not maintaining a traditional municipality is relevant only when the 938 A.2d 988 (Pa. 2007), which business office, in the city. Three municipality seeks to tax income from rejected and eliminated the “bright- justices joined in the opinion of the activities outside the municipality. In line” test established by a line of court, one concurred, one dissented, Gilberti v. City of Pittsburgh, 511 A.2d Commonwealth Court decisions that and two did not participate. 1321 (Pa. 1986), the court ruled that had required the presence of a local From 1999 to 2001, Rendina revenues from activities outside the “base of operations” to support a tax constructed a major office building in city could not have been taxed by the imposed on the “privilege of doing Harrisburg. The company maintained City of Pittsburgh if its tax had been the usual imposed on business “transactions” jobsite trailer within the city. However, Pittsburgh’s but did not tax was imposed on the privilege of have any doing business from a location within other office the city. Since the services provided by in the city. Gilberti were directed and controlled Rendina from Gilberti’s office or “base of paid the operations” in the city, the court held city’s BPT that revenues from those services were and then fairly related to the exercise of the filed a privilege of doing business in the city refund and could be taxed. claim. The The Rendina court refused to require city’s appeals the inverse of Gilberti - to preclude board and a privilege-based tax in the absence the Dauphin of a “base of operations” in the County municipality. The court noted that Court of the Local Tax Enabling Act (“LTEA”) Common broadly authorizes local taxing 6 Fall 2009 bodies to impose taxes on “persons, C.D. 2008 (unreported opinion), the following general principles now transactions, occupations, privileges, affirmed the trial court’s finding apply to local business privilege taxes subjects and personal property that a construction company had in Pennsylvania (subject to potential within the limits of such political failed to meet its burden of proving modification by Senate Bill 601): subdivisions ....” 53 P.S. § 6924.301.1. that it maintained business offices 1. Pursuant to Rendina, a “privileged- And, the City of Harrisburg’s tax at locations outside of the taxing based” tax may be imposed ordinance and regulations defined district in which its headquarters was on revenues from significant “business” broadly, so as to encompass located, to which some of its income activities carried on within the local construction activities. In this was attributable for business privilege taxing jurisdiction, whether or light, the court held that Rendina’s tax purposes. The applicable taxing not the taxpayer has an office or presence in the City of Harrisburg ordinances contained an exemption other “base of operations” in the for “a major long-term construction for receipts attributable to an office or jurisdiction. It seems unlikely that project” represented an exercise of the place of business regularly maintained tax may be imposed for an isolated privilege of doing business afforded outside the limits of the taxing district. activity. by the city. Furthermore, the court The court held that this exemption 2. Pursuant to Gilberti and its indicated that Rendina’s activities were applies to offices serving as a “base of progeny, a properly-drafted subject to tax “regardless of whether operations” in another taxing district ordinance or resolution may the job site trailer was used as a ‘base and to revenues subject to BPT in impose a “privilege-based” tax of operations’ ..., or whether the three- another jurisdiction. There was no on intrastate gross receipts year construction project can, in some evidence that BPT had been imposed attributable to activities carried sense, be viewed as constituting a single on the disputed receipts by another on outside the jurisdiction but lengthy ‘transaction.’” local taxing district. In addition, the managed and controlled from a Justice Baer, in a concurring court stated that the taxpayer had not “base of operations” within the opinion, indicated that the Majority demonstrated that any of its “offices” jurisdiction. Opinion unnecessarily blurred the in other jurisdictions constituted a base 3. Under a “transaction-based” tax, lines between the local taxation of of operations. The taxpayer argued the taxing jurisdiction may not tax “privileges” and of “transactions.” He that the court did not apply the correct revenues from business transacted would adhere to the requirement standard in determining whether its outside the jurisdiction. See J&K of a “base of operations” to support various field offices qualified for the Trash Removal, Inc. v. City of Chester, imposition of a privilege-based tax, “office exemption.” The taxpayer’s 842 A.2d 983 (Pa. Cmwlth. 2004), and would not view a jobsite trailer application for reargument was denied appeal denied, 867 A.2d 524 (Pa. as a “base of operations.” However, on July 30, 2009. The taxpayer filed a 2005). However, the Rendina he also opined that, under the LTEA, Petition for Allowance of Appeal with majority’s reluctance to draw a local government was permitted the Pennsylvania Supreme Court on clean lines and the willingness to adopt a “hybrid tax” on both the August 28, 2009. The Supreme Court of the concurrence to view a exercise of a privilege to do business has not yet acted on that Petition. tax as both a “privilege-based” and on transactions within the taxing and “transaction-based” tax may jurisdiction. In his opinion, Harrisburg general Bpt prinCipleS encourage municipalities and had adopted a “hybrid tax.” Each “business privilege tax” school districts to argue that their Justice Cappy dissented, indicating ordinance or resolution must be tax ordinances and resolutions that he agreed with the reasoning of construed to give effect to its specific are both “privilege-based” and the Commonwealth Court majority, terms. For example, BPT ordinances “transaction-based.” We will that the contractor’s job trailer did not contain varying definitions of the term be faced with sorting out often constitute a “base of operations” within “business.” In addition, in contrast imprecise or conflicting language the taxing jurisdiction and that the tax to a traditional “privilege-based” tax, in tax ordinances and resolutions. could not be upheld in the absence of some local taxing jurisdictions have 4. A Pennsylvania municipality a “base of operations.” adopted taxes that are labeled as a or school district must fairly “business privilege tax,” but which apportion receipts derived from a&l DeCiSion impose tax only on the “volume of interstate operations, even when On June 4, 2009, in the first post- business transacted” within the taxing the taxpayer’s only permanent Rendina BPT decision issued by jurisdiction and not on a taxpayer’s place of business is located within an appellate court addressing the entire gross receipts. Although these the municipality. applicability of BPT to a construction “principles” are subject to the specific contractor, a three-judge panel of terms of a particular BPT ordinance Sharon R. Paxton is a member of McNees the Commonwealth Court, in A & L, or resolution, case law developments, Wallace & Nurick LLC’s State and Local Inc. v. Township of Rostraver, No. 1651 including the Rendina decision, suggest Tax Group. 7 Fall 2009 Firm: Contact: Address: City: State: Zip: Phone: Fax: Email: Annual Fees: $_________ YIE: __________ In the past three years, how many firm members attended a loss control seminar ____ Number of accountants (with years of On what date was the firm established___________ experience): Within the past 5 years: F/Time: P/Time*: 5+ years: ________ ________ Has the firm provided services to a client that is engaged in the issuance, offering, 4 years: ________ ________ registration or sale of securities or bonds; or provided clients with forecasts or projections for inclusion in sales literature, etc., of any securities or bonds? 3 years: ________ ________ YES o NO o 2 years: ________ ________ Has any member of the firm provided services or acted as a 1 year: ________ ________ director/officer/committee member for any financial institution? YES o NO o <1 year: ________ ________ Total: ________ ________ Has any member of the firm had an accounting license or authority to practice accounting revoked, or been subject to disciplinary action, fine reprimand, or criminal *Average of 25 hours per week or less penalty related to performance of professional services? YES o NO o Renewal: ___/___/___ Insurer: ___________________ Limit: $ ___________ Deductible: $ ___________ Premium: $ ________________ What is the retroactive date on your current policy ___/___/___ o None o N/A Approximately percentage of income received from the following activities for the last annual period: Activity % Activity % Audit: Public Companies** Litigation Support Audit: Other Management Advisory Services Review Assurance Services Compilation Financial Planning Bookkeeping Asset Management Tax Sale of Mutual Funds Business Valuation SEC/Sarbanes Oxley Related Services** Computer Consulting Other* Litigation Support Total 100% ••Calls for a supplement CLAIMS HISTORY (within the past five years): Date claim(s) Reported One: ____/____/19 ______ Two: ____/____/19 ______ Three: ____/____/19 ______ Amount Paid, including $ ______________________ $ ______________________ $ ______________________ Defense Expenses (if closed) $ ______________________ $ ______________________ $ ______________________ Reserve amount (if open) $ ______________________ $ ______________________ $ ______________________ Please return to Custom Brokers Insurance, 3659 Green Road Suite 209, Beachwood, Ohio 44122 Tel: 800-969-7475 – Fax: 216-831-6819 Email to: firstname.lastname@example.org – http:www.cpagold.com NSA State Director’s Message Report on 4) Proposed Bylaw To Allow Online preparers, Hawkins mentioned by NSA Annual Voting for NSA Officers, District way of example. However, Hawkins, Meeting held Governors, State Directors and Bylaw who is a licensed lawyer in California, in San Diego Amendments said that lawyers and CPAs have yet NSA held propoSeD BYlaW taBleD until to convince her that there is anything their 64th Annual next Year inherent in attaining their licenses that Meeting in San makes them qualified or competent tax Diego, CA on NSA Awards Banquet return preparers. “I am not convinced August 12-15, During the awards portion of the that they should be exempted from NSA State Director 2009. Elected event, PSPA was awarded a plaque testing by the mere fact that they are of the Year as President was for successfully “Monitoring the State licensed by their state bar or by their robert l. Cross of Board of Accountancy”. In addition, state accountancy board,” she said. Northglenn, CO. Donny J. Woods of Mary Lew Kehm won an award for In addition, many unenrolled and Nashville, AR was elected as First Vice the “Best Single Article in an ASO’s unlicensed preparers who have been President. In a contested election for publication.” preparing returns for a long time Second Vice President, former support the grandfathering concept, as District Governor Sharon Cook was More News Related to they do not think they should have to successful in her bid for election. Tax Preparer Registration take a test this late in their careers, she Steven J. hanson of Cokato, MN was In October, NSA Executive Director said. These individuals often do not re-elected as Secretary/Treasurer. John Ams reported his attendance enroll or become licensed because they In addition, elections were held for at several IRS Tax Preparer Forums just want to prepare returns and do not all District Governors in the “odd” held in September. In October, want to represent taxpayers in front numbered districts and all State Executive Director Ams issued an of the IRS, Hawkins said. She noted Directors in the “even” numbered NSAlert regarding Tax Preparer that groups like NSA, H & R Block and districts. There was only one contested Regulation. As part of the NSAlert, the ABA have expressed the view there election for Governor of District IX. John referenced remarks presented should be some kind of examination Joyce Funkhouser-Lingelbach from by OPR Director Karen Hawkins at process to test an individual’s Oregon was successful in her bid, and the fall meeting of the American Bar minimum tax competency, with some will be the new Governor. All other Association. According to her remarks, exceptions for those who have already positions were unopposed. the introduction of tax preparation taken a competency exam that IRS software for commercial preparers has deems sufficient. The consensus at Proposed Bylaw Changes made it possible for people who never the Tax Preparer Forums held by In addition to election of officers, would have considered it before to start IRS, most recently on September there were four major bylaw changes their own tax preparation businesses. 30 in Chicago, is that “minimum proposed. She was particularly critical of those competency” is knowledge of the “who use this software and rely on it tax law as found in Publication 17. 1) Proposed Bylaw Amendment to as if it does everything for them.” She Clearly, since any ACAT examination is allow all Active and Life Members of noted that the software makers have more difficult than the Pub. 17-based NSA to participate in and vote on all expressed the view that their product test contemplated above, we have matters at the Annual Meeting does not make anyone a tax expert. asked the IRS to exempt from any propoSeD BYlaW Change Hawkins said she thinks it is legitimate testing requirement ACAT credential approveD to consider having individuals take holders who have passed a valid ACAT some sort of test to gain authorization examination. 2) Proposed Bylaw to Allow Board to prepare tax returns. Questions Even the potential requirement for Members to receive a salary or fees that have arisen on this issue include continuing education has caused some from NSA with Board Approval whether certain groups or individuals controversy, according to Hawkins. She propoSeD BYlaW Change should be exempt from an exam or if noted that some individuals, primarily approveD they can be “grandfathered” into the CPAs and attorneys, are required to system, she said. Individuals currently 3) Proposed Bylaw to Change the NSA subject to Circular 230 believe they NSA State Director’s Name should not have to take an additional Message propoSeD BYlaW DeFeateD test to qualify to register as paid continued on page 18 9 Fall 2009 New Video Series Helps for people who have questions about body, management, policies and Exempt Organizations the redesigned Form 990. It looks at procedures and disclosure practices. Understand Redesigned some of the key things to consider It also focuses on Schedule L, which Form 990 Requirements about the Form 990 and the various requests information on transactions The Internal Revenue Service schedules that exempt organizations with interested persons, such as has launched a new case study and may need to complete, particularly directors, officers, key employees and video program to help exempt Schedule R. their family members. organizations and their tax preparers better understand the newly revised revenue and expenses Summary, Schedules, Signatures Form 990 series which must be filed This segment covers two of the This segment covers Parts I, II for the 2008 tax year. financial statement portions: Part and IV of the Form 990—Summary, The Form 990 series, redesigned VIII, Statement of Revenue, and Part Signature Block and Checklist of for the first time in nearly 30 IX, Statement of Functional Expenses. Required Schedules. It also provides years, requires more disclosure It looks at how to fill out the required an overview of several new schedules and transparency by exempt columns of information for revenue to the Form 990. organizations. With some exceptions, and expenses. “The New Form 990: Getting organizations that are exempt for Started” is only one of the online federal taxation are required to file Balance Sheet, Supplemental resources the IRS offers for 990 filers. the Form 990 information return. Financial Statements, and Schedule D There is a five-part interactive course The additional information will give This video reviews Part X of the at www.stayexempt.irs.gov the IRS and the public a better view of Form 990, the Balance Sheet, and Part and a series of 990 filing tips, plus the how the exempt organizations work, XI, which covers Financial Statements 990 form, schedules and instructions especially in terms of expenditures and Reporting. It explains some at www.irs.gov/charities. and executive salaries. differences between the redesigned To help illustrate key points and and previous version of Form 990. It New IRS Retirement Plan answer important questions about also focuses on parts of Schedule D, Navigator Aims to Help the new Form 990, the IRS’ Exempt Supplemental Financial Statements. Small Businesses Organizations Division developed The Internal Revenue Service has “The New Form 990: Getting Started,” program Services, other irS Filings created a new Web-based tool to help a case study about a hypothetical and tax Compliance small business owners determine organization – Exempt Organization This video focuses on Part III, which tax-favored pension plan best for Disaster Relief (EODR). which allows an organization to suits their needs and how to keep The hypothetical case study “tell its story” and describe its their plans in compliance. includes a set of facts describing program services, and Part V, which The IRS Retirement Plan Navigator organizational and financial aspects covers other IRS filings and areas is intended to provide employers of EODR, and a completed Form 990 of tax compliance. Part V will alert with an easy-to-use guide that focuses based on those facts. A video series organizations if they have other filing on three areas: choosing a plan, walks you through key reporting obligations besides the Form 990 maintaining a plan and correcting a issues common to most organizations and will help them to determine if plan. required to file Form 990. they engage in activities that raise tax By using the navigator, employers Before starting the videos, people compliance concerns. may find that choosing and should read the hypothetical EODR maintaining a pension plan is not case study and review the example Compensation as daunting as they thought. Some Form 990. The series of videos, each This segment reviews the Form plan types are less costly and easier to between five and ten minutes long, 990 compensation reporting in Part establish than others. cover a key area of the Form 990, VII. It explains who needs to be listed The navigator does not suggest using facts from the case study. in Part VII and explains the three which plan may be best for a specific The videos are listed in an order types of compensation to report. employer but it does lay out the based on the sequencing list found on It also highlights Schedule J, the options to allow them to choose one page 5 of the Form 990 instructions. compensation continuation schedule. that best fits their situations. The However, they can be viewed in any navigator includes a side-by-side order. Included in the video series governance comparison of pension plans and are: This segment describes how to their requirements. complete Part VI of the redesigned The navigator provides a checklist overview Form 990, which requests information and suggested resources for This video is a good place to start about the organization’s governing maintaining compliance. Pension 10 Fall 2009 laws change frequently. Employers can who are not reimbursed to use in a purchase price determined prior minimize problems by doing a once- computing the deductible costs they to exercise if the parties reasonably a-year review to ensure they maintain pay or incur for business meal and believe that the price will not be less compliance. incidental expenses, or for incidental than the fair market value of the energy The IRS also recognizes that mistakes expenses only if they pay or incur no property at the time the right may be can be made unintentionally, and meal expenses, while traveling away from exercised, clarifies how section 469 many errors can be corrected without home. Use of a method described in this applies to credits generated by wind notifying the agency. The navigator offers revenue procedure is not mandatory, energy facilities, clarifies that the revenue suggested options to employers seeking and a taxpayer may use actual allowable procedure only provides safe harbor to correct errors and bring their plans expenses if the taxpayer maintains requirements and makes conforming back into compliance. adequate records or other sufficient changes to the revenue procedure to Although the Retirement Plan evidence for proper substantiation. The reflect these three changes. Navigator is aimed at small business new high-low rates are $258 for high cost owners, it also can help mid-size areas and $163 for all others. Enrollment of Actuaries businesses review their options as REG-159704-03 contains proposed well. Individuals who want to better The IRS has issued amendments to 20 CFR part 901 relating understand their employer’s plan may Publication 4128, Tax Impact to the enrollment of actuaries under also find it of use. of Job Loss section 3042 of the Employee Retirement The Web-based guide will be kept up The publication discusses the taxability Income Security Act of 1974 (ERISA) to date as pension laws and regulations of various employer and government The proposed amendments would change. payments, getting your W-2 from a update the eligibility requirements for bankrupt employer, tax consequences of performing actuarial services for ERISA- Microsoft’s HealthVault to taking money from your retirement plan. covered employee pension benefit plans, Assist in Disability Process including the continuing education Social Security has entered into an Overstatement of Basis requirements, and the standards for agreement with Microsoft to test the The IRS has issued temporary performing such actuarial services. The use of Microsoft’s HealthVault service (replacing an existing final regulation) proposed amendments would affect in the disability process. HealthVault is (T.D. 9466) and proposed (REG-108045- employee pension benefit plans and the a free online service people can use to 08) regulations defining an omission actuaries providing actuarial services to gather, store, and manage their families’ from gross income for purposes of the those plans. health information. They can share the six-year minimum period for assessment information with doctors and healthcare of tax attributable to partnership items Revenue Filing Out of State providers. and the six-year period for assessing Liens “The use of personal health records tax. The temporary regulations resolve The PA Department of Revenue has holds great promise for ensuring that a continuing issue as to whether an begun filing liens against out of state the medical information we collect from overstatement of basis in a sold asset businesses that owe Pennsylvania tax someone applying for disability benefits results in an omission from gross income. liabilities of at least $5,000. is accurate and complete,” said Michael J. The regulations will affect any taxpayer The goal of the lien effort is to Astrue, Commissioner of Social Security. who overstates basis in a sold asset encourage out-of-state businesses “Combined with other advancements creating an omission from gross income operating in the commonwealth to in health information technology, our exceeding twenty-five percent of the comply with Pennsylvania tax laws. use of HealthVault should result in faster income stated in the return. The program will make businesses decisions for disability applicants.” accountable in their home state for tax Learn more about this new partnership The IRS has released an liabilities assessed in Pennsylvania. by reading the press release at www. updated version of The Department of Revenue uses socialsecurity.gov/pressoffice/pr/ms Publication 393, Employment the original liens filed in Pennsylvania Tax Forms against a company to export and 2009-47 (IRB 2009-42) – The package includes sample Forms domesticate the liens in the business Change to: Travel Rules W-2 and W-3 and instructions for the taxpayer’s state of domicile. Prior to Updated 2009 tax year. filing a lien, however, the department 2009-47 (IRB 2009-42) updates the notifies each taxpayer of its intent to lien rules for employer who are reimbursed Clarification to Energy and provides one final opportunity for for lodging, meals, and incidental Property Purchases the taxpayer to satisfy its tax obligations. expenses, or meals and incidental Announcement 2009-69(IRB 2009-40) expenses only, while traveling away from includes changes to Revenue Procedure New Service Allows home, to substantiate the expenses by 2007-65. Specifically, the announcement Inheritance Tax Extension per diem allowance in lieu of actual expands the rights of developers and Requests to Be Submitted Via expenses. The revenue procedure owners to enter into agreements for the Email also provides an optional method for purchase of the wind energy property Taxpayers and professionals are employees and self-employed individuals owned by the partnership to permit encouraged to use the PA Department of 11 Fall 2009 Revenue’s Inheritance Tax Divisions new contribution plans under Section 415(c) remains unchanged at $550. e-mail address RE-InheritanceTaxExt@ (1)(A) remains unchanged for 2010 at The limitation under Section 408(p) state.pa.us to file for extension requests. $49,000. (2)(E) regarding SIMPLE retirement Questions may be directed to the division The Code provides that various other accounts remains unchanged at $11,500. at 717-787-8327. dollar amounts are to be adjusted at the The limitation on deferrals under same time and in the same manner as Section 457(e)(15) concerning IRS Announces Pension Plan the dollar limitation of Section 415(b) deferred compensation plans of state Limitations for 2010 (1)(A). After taking into account the and local governments and tax-exempt The Internal Revenue Service applicable rounding rules, the amounts organizations remains unchanged at announced cost-of-living adjustments for 2010 are as follows: $16,500. applicable to dollar limitations for The limitation under Section 402(g) The compensation amounts under pension plans and other items for Tax (1) on the exclusion for elective deferrals Section 1.61-21(f)(5)(i) of the Income Year 2010. described in Section 402(g)(3) remains Tax Regulations concerning the Section 415 of the Internal Revenue unchanged at $16,500. definition of “control employee” for Code provides for dollar limitations The annual compensation limit under fringe benefit valuation purposes on benefits and contributions under Sections 401(a)(17), 404(l), 408(k) remains unchanged at $95,000. The qualified retirement plans. Section (3)(C), and 408(k)(6)(D)(ii) remains compensation amount under Section 415(d) requires that the Commissioner unchanged at $245,000. 1.61-21(f)(5)(iii) remains unchanged at annually adjust these limits for The dollar limitation under Section $195,000. cost-of-living increases. Other limitations 416(i)(1)(A)(i) concerning the The Code also provides that several applicable to deferred compensation definition of key employee in a top-heavy pension-related amounts are to be plans are also affected by these plan remains unchanged at $160,000. adjusted using the cost-of-living adjustments under Section 415. Under The dollar amount under Section adjustment under Section 1(f)(3). After Section 415(d), the adjustments are to be 409(o)(1)(C)(ii) for determining taking the applicable rounding rules into made pursuant to adjustment procedures the maximum account balance in an account, the amounts for 2010 are as which are similar to those used to adjust employee stock ownership plan subject follows: benefit amounts under Section 215(i)(2) to a 5-year distribution period remains The adjusted gross income limitation (A) of the Social Security Act. unchanged at $985,000, while the under Section 25B(b)(1)(A) for The limitations that are adjusted by dollar amount used to determine the determining the retirement savings reference to Section 415(d) will remain lengthening of the 5-year distribution contribution credit for married taxpayers unchanged for 2010. This is because the period remains unchanged at $195,000. filing a joint return is increased from cost-of-living index for the quarter ended The limitation used in the definition $33,000 to $33,500; the limitation September 30, 2009, is less than the cost- of highly compensated employee under Section 25B(b)(1)(B) remains of-living index for the quarter ended under Section 414(q)(1)(B) remains unchanged at $36,000; and the limitation September 30, 2008, and, following the unchanged at $110,000. under Sections 25B(b)(1)(C) and 25B(b) procedures under the Social Security The dollar limitation under (1)(D), remains unchanged at $55,500. Act for adjusting benefit amounts, any Section 414(v)(2)(B)(i) for catch-up The adjusted gross income limitation decline in the applicable index cannot contributions to an applicable employer under Section 25B(b)(1)(A) for result in a reduced limitation. For plan other than a plan described in determining the retirement savings example, the limitation under Section Section 401(k)(11) or Section 408(p) contribution credit for taxpayers filing 402(g)(1) on the exclusion for elective for individuals aged 50 or over remains as head of household is increased from deferrals described in Section 402(g) unchanged at $5,500. The dollar $24,750 to $25,125; the limitation (3) will be $16,500 for 2010, which is limitation under Section 414(v)(2)(B) under Section 25B(b)(1)(B) remains the same amount as for 2009. This (ii) for catch-up contributions to an unchanged at $27,000; and the limitation limitation affects elective deferrals to applicable employer plan described in under Sections 25B(b)(1)(C) and 25B(b) Section 401(k) plans and to the Federal Section 401(k)(11) or Section 408(p) (1)(D), remains unchanged at $41,625. Government’s Thrift Savings Plan, among for individuals aged 50 or over remains The adjusted gross income limitation other plans. unchanged at $2,500. under Section 25B(b)(1)(A) for Effective January 1, 2010, the limitation The annual compensation limitation determining the retirement savings on the annual benefit under a defined under Section 401(a)(17) for eligible contribution credit for all other taxpayers benefit plan under Section 415(b)(1) participants in certain governmental is increased from $16,500 to $16,750; the (A) remains unchanged at $195,000. For plans that, under the plan as in effect limitation under Section 25B(b)(1)(B) participants who separated from service on July 1, 1993, allowed cost-of-living remains unchanged at $18,000; and the before January 1, 2010, the limitation adjustments to the compensation limitation under Sections 25B(b)(1)(C) for defined benefit plans under Section limitation under the plan under Section and 25B(b)(1)(D), remains unchanged 415(b)(1)(B) is computed by multiplying 401(a)(17) to be taken into account, at $27,750. the participant’s compensation remains unchanged at $360,000. The deductible amount under § limitation, as adjusted through 2009, by The compensation amount under 1.0000. Section 408(k)(2)(C) regarding Professional’s Corner The limitation for defined simplified employee pensions (SEPs) continued on page 14 12 Fall 2009 Professional’s Corner Corporation Tax Package X 2009-50) that because of very mild continued from page 12 (instructions, tax reports and schedules inflation, tax rate brackets and various will no longer be printed and mailed. tax benefits indexed for inflation will 219(b)(5)(A) for an individual making Personal Income Tax Package X remain unchanged or change only qualified retirement contributions (instructions, returns and schedules) slightly in 2010. remains unchanged at $5,000. will no longer be printed and mailed – a By law, the dollar amounts for a The applicable dollar amount under letter/order form will be mailed in its variety of tax provisions must be revised Section 219(g)(3)(B)(i) for determining place. each year to keep pace with inflation. the deductible amount of an IRA PA-V (Payment Voucher for Individual As a result, more than three dozen contribution for taxpayers who are Income Tax Returns) will only be printed tax benefits are subject to inflation active participants filing a joint return and mailed to those taxpayers who used a adjustments each year, but because or as a qualifying widow(er) remains 2008 PA-V to submit their payment to the recent inflation factors have been unchanged at $89,000. The applicable department. minimal, many of these benefits will dollar amount under Section 219(g)(3) 2010 PA-40ES (Individual, Fiduciary remain unchanged or change only (B)(ii) for all other taxpayers (other than and Partnerships/PA S Corporation slightly for 2010. Key provisions affecting married taxpayers filing separate returns) Estimated Payment Coupons) estimated 2010 returns, filed by most taxpayers in is increased from $55,000 to $56,000. coupon packets for taxpayers who used early 2011, include the following: The applicable dollar amount under coupons prepared by their practitioner’s The value of each personal and Section 219(g)(7)(A) for a taxpayer software in 2009 will no longer be dependency exemption available to most who is not an active participant but mailed. taxpayers is $3,650, unchanged from whose spouse is an active participant is PA Schedule C-F Reconciliation 2009. increased from $166,000 to $167,000. (Adjusting Federal Business Expenses for The new standard deduction for The adjusted gross income limitation PA Tax Purposes) is being discontinued. heads of household is $8,400, up from under Section 408A(c)(3)(C)(ii)(I) for PA Schedule A/B (Interest Income/ $8,350 in 2009. For other taxpayers, the determining the maximum Roth IRA Dividend Income) duplicate copy is standard deduction remains unchanged contribution for married taxpayers filing being removed from PA-40 booklet. at $11,400 for married couples filing a a joint return or for taxpayers filing PA Schedule E [Rents and Royalty joint return and $5,700 for singles and as a qualifying widow(er) is increased Income (Loss)] duplicate copy is being married individuals filing separately. from $166,000 to $167,000. The removed from PA-40 booklet. Nearly two out of three taxpayers take adjusted gross income limitation under PA Schedule J/T (Income from the standard deduction rather than Section 408A(c)(3)(C)(ii)(II) for all Estates or Trusts/Gambling and Lottery itemizing deductions, such as mortgage other taxpayers (other than married Winnings) duplicate copy is being interest, charitable contributions, and taxpayers filing separate returns) remains removed from PA-40 booklet. state and local taxes. unchanged at $105,000. PA-20S/PA-65 (PA S Corporation/ Various tax bracket thresholds will see Partnership Information Return) will no minor adjustments. For example, for a Philadelphia Local Sales and longer be printed and mailed. married couple filing a joint return the Use Tax Rate Increase Went All the above mentioned forms will be taxable income threshold separating the into Effect October 8, 2009 available on the department’s Web site, 15 percent bracket from the 25 percent The City of Philadelphia raised its local www.revenue.state.pa.us. bracket is $68,000, up from $67,900 in sales and use tax rate form 1 percent to 2 2009. percent, except for the Philadelphia local No Social Security COLA in The annual gift tax exclusion remains hotel occupancy tax which will remain at 2010 unchanged at $13,000. 1 percent. This is in addition to the state Because consumer prices were down sales, use and hotel occupancy tax rate over the past year, Social Security and IRS Issues Erroneous which remains at 6 percent. Supplemental Security Income benefits Requests for Form 941 Under Act 44 of 2009, signed into will not automatically increase in 2010. Schedule B law on September 18, 2009, this tax rate This will be the first year without an The IRS has announced that due to change is effective from October 8, 2009 automatic Cost-of Living Adjustment a scanning error some small businesses to June 30, 2014. (COLA) since they went into effect in have received notices asking them to 1975. submit Form 941 Schedule B although PA Revenue Department to Social Security has creased a they filed the form with their return. Reduce Printing and Mailing prominent link on their home page If you received one of the erroneous in 2010 at www.socialsecurity.gov/cola to a notices please resubmit the appropriate Pennsylvania taxpayers and portal site with useful information about Schedule B along with the notice to practitioners will see fewer materials the COLA, as well as frequently asked the IRS as soon as possible to avoid printed and mailed from the PA questions (FAQs). additional erroneous notices. Department of Revenue this coming year. The following changes will be made for Various Inflation Adjustments First-Time Homebuyer’s tax year 2009 and 2010 forms, booklets Remain Unchanged Credit Extended and coupon packets: The IRS has announced (Rev. Proc. President Obama signed the Worker, 14 Fall 2009 Homeownership and Business Tax Act of 2009. The provision of most interest IRS Provides Additional Clarification is the extension of the $8,000 home (Frequently Asked Questions) buyer tax credit until April 30, 2010 for purchases under contract and June Regarding 7216 30, 2010 for sale closing. The benefits have expanded to include a $6,500 The following questions (number 21-25) have recently been posted by the IRS. Questions 1-20 were credit for all home buyers and a higher formerly posted on the IRS website and can be obtained by going to: www.irs.gov. income phase-out amount. The bill includes some new restrictions, mostly Q21. on the Consent to use, do both the taxpayer and spouse have to sign before a aimed at preventing fraud. The bill also practitioner can begin the return and discuss a bank product with them? Many times, includes an expansion of the carryback one spouse comes by, does the return and then the other comes by and signs later. of operating losses for 2008 or 2009 a.21. If it’s a joint return, yes. (removing the size restriction). The bill increases the failure-to-file penalties Q22. is a tax practitioner required to obtain a disclosure consent for financial planning for S corporations and partnerships advice when the practitioner is both the tax preparer and the financial advisor for the and delays the effective date for the client. worldwide interest allocation benefit. a.22. In this case the preparer is required to obtain a signed consent to use tax return information if the financial planning advice will be based on information obtained Military Spouses Residency in connection with the preparation of a tax return. A separate signed consent form Relief Act to disclose tax return information would be required in order for the taxpayer to On Veterans Day, President Obama authorize the preparer to share tax return information with another person for a signed the Military Spouses Residency purpose other than tax return preparation, e.g., to obtain financial advice, products Relief Act (S. 475), which will affect or services. Refer to Treasury Regulation section 301.7216-3(b) regarding timing how the income and property of some requirements and limitations for soliciting consents. spouses of military personnel are taxed. http://www.irs.gov/irb/2008-05_IRB/ar07.html The Act amends the Servicemember Q23. is a practitioner required to get written disclosure consent from their client to Civil Relief Act (hereinafter, “SCRA”) disclose tax return information if the client’s tax return information is to be used for to provide that a spouse shall neither financial planning purposes by the practitioner who prepared the return? lose nor acquire domicile or residence a.23. In this case the preparer is required to obtain a signed consent to use tax return in a state when the spouse is present information if the financial planning analysis will be based on information obtained in the state solely to be with the in connection with the preparation of a tax return. A separate signed consent form servicemember in compliance with the to disclose tax return information would be required in order for the taxpayer to servicemember’s military orders if the authorize the preparer to share tax return information with another person for a residence or domicile is the same for purpose other than tax return preparation, e.g., to obtain financial advice, products both the servicemember and spouse. or services. Refer to Treasury Regulation section 301.7216-3(b) regarding timing requirements and limitations for soliciting consents. New York Posts Tax http://www.irs.gov/irb/2008-05_IRB/ar07.html Preparer Registration Information Q24. What happens when a practitioner sells their tax practice to another practitioner? The New York State Department how is the disclosure of the client’s tax information to the purchasing practitioner of Taxation and Finance has posted handled? information on its Web site about its a.24. Refer to Treasury Regulation section 301.7216-2(o). Disclosures are permitted new tax return preparer registration without taxpayer consent. The purchaser of the practice is subject to the section 7216 requirements at: http://www.tax.state. statute and regulations. ny.us/tp/tpreg.htm Only New York-licensed CPAs and Q25. if a client wants to have the practitioner forward a copy of their tax return to attorneys are exempt from this law. a bank for mortgage purposes how is this going to be done if the client did not sign You can see a list of who else is exempt a disclosure statement before the tax returns was prepared. For example: return is at http://www.tax.state.ny.us/tp/ prepared in March. no disclosure consent was signed. Client gets new job in June and tpregmore.htm has to move. they need a copy of the return for the bank to get a mortgage for their There will be online registration new home. is the only option for the practitioner to send the copy of the tax return to available soon, according to the site. the client who will then give it to the bank? A bill (A9028) to repeal the law was a.25 Refer to Treasury Regulation sections 301.7216-3(b) and 3(c)(2).* Preparers passed in the Assembly during the may not solicit consents after a completed return is provided to the taxpayer for summer, but after it was referred to the signature. The same restriction does not apply to taxpayers. Taxpayers may ask their Senate Rules Committee, no action has preparer to use or disclose their tax return information at any time. In this case been taken. the preparer is required to secure a signed consent form from the taxpayer before PSPA will continue to update the disclosing the tax return to the bank. Taxpayers may also obtain a copy of their return membership of future developments. from the preparer and supply it to the bank without signing a consent form. 15 Fall 2009 Introducing Quickfinder’s Guide to the 2008 and Spring 2009 Tax Acts Be prepared to answer client questions and save tax dol- 2 0 0 9 TA X Y E A R P R O D U C T S lars! This new perfect-bound book is packed with all the significant tax acts and legislation passed in 2008 and through the spring of 2009. Pennsylvania Society of Public Accountants Premium Quickfinder Handbook A handy combination of the most important 1040 and Small Business topics that you need to complete tax returns. Price: $65 $63 Donation $6 Discount Code : Q760 Customer Number..........................(If known.) Company Name ................................................................................................................ Product Qty Retail Assoc. Shipping Quickfinder Handbooks (Print or CD): 1 $43 $40 Name................................................................................................................................ 1040 • Small Business • Individuals— 2 – 10 $41 $38 $4.00 ea* Special Tax Situations • Tax Planning 11 – 20 $38 $35 Address..................................................................(If P.O. Box, please include physical address for UPS.) for Individuals • Tax Planning for Businesses • 21+ $36 $33 ......................................................................................................................................... Depreciation • Accounting and Bookkeeping • NEW! Guide to the 2008 & Spring 2009 City, State, Zip ................................................................................................................... Tax Acts All States Quickfinder Handbook 1 $76 $71 Email .......................................................................................... (Required for order confirmation.) (Print or CD) 2 – 10 $72 $67 11 – 20 $68 $63 $4.00 ea* Day Phone (..................) .................................................................................................. 21+ $63 $58 NEW! Premium Quickfinder Handbook 1 $65 $63 ORDER INSTRUCTIONS (Available 12/09) 2 $62 $61 3 – 10 $60 $59 $4.00 ea* Use your association discount code (listed above) on every order! 11 – 20 $59 $58 • Phone: 800-510-8997, option 1 21+ $57 $56 NEW! California Tax Quickfinder 1 $49 $47 • Fax: 817-877-3694 Handbook 2 $47 $46 3 – 10 $44 $42 $4.00 ea* • Mail check to: 11 – 20 $41 $39 Quickfinder 21+ $39 $36 36786 Treasury Center NEW! Efficient Tax Office (Print Only) Each $39 $34 $4.00 ea Chicago IL 60694-6700 Client Quick Reference Tax & Wealth Schedules (Set of 5) Each $12 $11 $1.00 ea • Online: Quickfinder.Thomson.com Wall Calendar w/ Discount Coupons Each $12 $9 $3.00 ea Package QF-X (Individuals or Businesses) Each $12 $9 $3.00 ea Tax Tables (Individuals or Businesses) Each $12 $9 $3.00 ea Credit Card Account # Visa MasterCard Discover AMEX Tax Tips Newsletter 1 yr/12 iss. $59 $50 $4.00 ea - - - Handbook-Based Self-Study CPE Per course $25 $19 $3.00 ea Ethics Self-Study CPE Per course $25 $19 $3.00 ea Expiration Tax Training CPE (DT1T, DT2T, DT3T, DCTT) Per course $89 $79 $3.00 ea Date Federal Tax Handbook-Quickfinder Edition Each $29.95 (no donation) $7.50 ea Month Year Cardholder’s Signature Please Note: Our policy is to charge your credit card at the time of order. *When ordering quantities greater than 11, call for discounted shipping/handling pricing. Your association receives a donation for each product purchased under your special discount code—and you receive a discounted price on every product! All Discounts: The highest available dis- count will be applied to your order; discounts Line Product Print Qty CD-ROM Qty CPE Unit TOTAL and special offers cannot be combined. Price Quantity Discounts: Combined quanti- ties of the SAME TITLE are eligible for a 1 quantity discount (e.g., you buy six 1040 2 Handbooks and pay $38 each, instead of $40 each). Discount does not apply when 3 purchasing different titles (e.g., you buy two 1040 Handbooks and three Small Business 4 Handbooks). 5 CD Discount: 20% off each CD when purchased with the print version (e.g., 20% 6 Subtotal: Add lines 1 through 5. off three 1040 CDs when purchased at the same time as three print 1040 Handbooks). 7 Shipping & Handling: Please see the chart above for costs. S&H and Sales Tax: Applicable state and local 8 Sales Tax: Add your exact state and local tax. Call 800.510.8997 for assistance. sales tax and shipping and 9 GRAND TOTAL: Add lines 6, 7, and 8. handling charges will be added at time of order. FOB Shipping Point 800.510.8997 • quickfinder.thomson.com SPECIALÊ PRICING Pennsylvania Society FOR of Public Accountants For Discounts Order By Mail, $5 donation to PSPA for every copy of TheTaxBook™ purchased using code 395. Mention Code: 395 Online or Phone! The more MVP STEP 1 STEP 2 Determine Your MVP Price Column STEP 3 Items you order, Total MVP Items Calculate Cost Order any Order any Order any Order any Order any Order any the more you save on each item! A 1 2 3–5 6 –10 11– 20 21+ Example: If “Total MVP Total MVP Total MVP Total MVP Total MVP Total MVP Total MVP Items” equals 7 Total MVP Item, use this Items, use this Items, use this Items, use this Items, use this Items, use this Items, then use the “6 – 10 Build Your Own Sum of Quantity price column price column price column price column price column price column Total MVP Items” price Value Package! Column for the item. for both items. for each item. for each item. for each item. for each item. column for each item. MVP Items Quantity Use the Price Column equal to your “Total MVP Items” Item Price Cost Deluxe Edition × $ 69 $ 65 $ 67 $ 63 $ 65 $ 61 $ 64 $ 60 $ 63 $ 59 $ 62 $ 58 $ =$ TheTax Book 1040 Edition × $ 44 $ 41 $ 43 $ 40 $ 42 $ 39 $ 41 $ 38 $ 40 $ 37 $ 39 $ 36 $ =$ Series Small Business Edition × $ 44 $ 41 $ 43 $ 40 $ 42 $ 39 $ 41 $ 38 $ 40 $ 37 $ 39 $ 36 $ =$ and All States Edition × $ 76 $ 71 $ 74 $ 69 $ 72 $ 67 $ 70 $ 65 $ 68 $ 63 $ 67 $ 62 $ =$ Binder TheTaxBook Binder × $ 16 $ 13 $ 15 $ 12 $ 14 $ 11 $ 13 $ 10 $ 12 $9 $ 11 $8 $ =$ TheTaxBook WebCD × $ 99 $ 91 $ 92 $ 84 $ 85 $ 77 $ 78 $ 70 $ 71 $ 63 $ 64 $ 56 $ =$ WebCD WebCD Site License × $ 289 $ 279 $ 269 $ 259 $ 249 $ 239 $ 229 $ 219 $ 209 $ 199 $ 189 $ 179 $ =$ ClientTax Pocket Calendars (30 pack) × $ 45 $ 42 $ 42 $ 39 $ 39 $ 36 $ 36 $ 33 $ 33 $ 30 $ 30 $ 27 $ =$ Tools Donation Trackers (30 pack) × $ 45 $ 42 $ 42 $ 39 $ 39 $ 36 $ 36 $ 33 $ 33 $ 30 $ 30 $ 27 $ =$ 1040 and Small Business × $ 16 $ 13 $ 14 $ 12 $ 12 $ 11 $ 11 $ 10 $ 10 $9 $9 $8 $ =$ FastTax Starting a Business × $ 16 $ 13 $ 14 $ 12 $ 12 $ 11 $ 11 $ 10 $ 10 $9 $9 $8 $ =$ Facts Employee Benefits × $ 16 $ 13 $ 14 $ 12 $ 12 $ 11 $ 11 $ 10 $ 10 $9 $9 $8 $ =$ Series Depreciation × $ 16 $ 13 $ 14 $ 12 $ 12 $ 11 $ 11 $ 10 $ 10 $9 $9 $8 $ =$ TheTax New Tax Law Review × $ 38 $ 35 $ 35 $ 32 $ 32 $ 29 $ 29 $ 26 $ 26 $ 23 $ 23 $ 20 $ =$ Review Deluxe Tax Review × $ 49 $ 47 $ 45 $ 43 $ 41 $ 39 $ 37 $ 35 $ 33 $ 31 $ 29 $ 27 $ =$ Series Individual Tax Review × $ 38 $ 36 $ 35 $ 33 $ 32 $ 30 $ 29 $ 27 $ 26 $ 24 $ 23 $ 21 $ =$ (Self- Study CPE Small Business Tax Review × $ 38 $ 36 $ 35 $ 33 $ 32 $ 30 $ 29 $ 27 $ 26 $ 24 $ 23 $ 21 $ =$ Courses) IRS Rules for Ethics × $ 32 $ 31 $ 30 $ 29 $ 28 $ 27 $ 26 $ 25 $ 24 $ 23 $ 22 $ 21 $ =$ Quantity Item Price Cost 2009 Order Form Non-MVP Pre-Punched Paper Pack × $7.95 $6.95 =$ Items ClientTaxTools Holder × $6.95 $5.95 =$ Customer # Total Non-MVP Items: B (enter if known, not required) Shipping & Handling Charge Total Shipping & Shipping & Company Name Quantity of Handling Total Quantity of All Items × Handling All Items Charge Per Item Charge* Shipping & Handling Charge per Item A + B (see chart below) Name Shipping & Handling Charge × $ /item = $ Shipping & Handling Charge Per Item Address * Please (If P.O. Box, please include physical address) Total Quantity 1 2 3–5 6 – 10 11 – 20 21+ call for of All Items Item Items Items Items Items Items international City, State, Zip Shipping & Handling $ 4.75/ $ 4.50/ $ 4.00/ $ 3.50/ $ 2.75/ $ 2.00/ orders. Charge Per Item item item item item item item Email (Needed for order and shipping confirmation, TheTaxReview courses, and TheTaxAuthority Email Updates) TheTaxAuthority Update Service: Free with each book $ 29 or $ or WebCD ordered…or purchase separate for $ 29. FREE Day Phone Please send me TheTaxAuthority Email Updates…FREE with book or WebCD orders! MAIL CODE Step 4 Total of Cost Column (include S&H charge) $ 3 9 5 Step 5 MN residents add 7.275% sales tax $ PAYMENT OPTIONS Remember to include credit card number & expiration date. Step 6 Step 4 + Step 5 = Grand Total $ – – – Orders are shipped first-in, first-out starting on the start ship date of the product. Credit Card: ❑ MasterCard ❑ Discover ❑ Visa ❑ American Express Toll Free: 866-919-5277 • www.thetaxbook.com Thank – 15105 Minnetonka Ind. Rd., Suite 221 Minnetonka, MN 55345 Expiration Date Cardholder’s Signature Local: 952-746-5276 Credit cards are charged for the entire order when the first item ships. ❑ Check or Money Order payable to: Tax Materials, Inc. Toll Free: 866-919-5277 Fax: 952-746-5278 Email: email@example.com You! NSA State Director’s $1,000 to NSA’s Message Scholarship continued from page 9 program. NSA’s Scholarship have a specified number of hours on Foundation is continuing education, but that CPE now accepting is not necessarily required to be tax- applications for related, raising the question of what its 2010 program. to require for those who are currently Applications must licensed and must participate in be postmarked continuing education anyway. IRS does by March 10, not want to increase burden on anyone 2010 and sent concerning continuing education, to Scholarship “although I would say that I don’t think Management it would do anybody any harm to have Services, a division to take maybe a couple extra hours a of Scholarship year that was on current developments America, which and hot topics in tax law,” Hawkins manages the said. She gave the distinct impression application that there would be a requirement for process. tax-related CPE for those who are not Additional otherwise required to have any CPE. information can be found online Scholarship News at: www.nsacct. Society of Accountants is currently Since 1969, the National Society org/foundation.asp offering 4 Bonuses for active and of Accountants (NSA) Scholarship Foundation has provided nearly $1 associate first year applicants joining at Education Programs $189/year: million to deserving undergraduate Following is a rundown of webinars B • onus 1: A Free 2009 TAx and graduate students who are scheduled so far to be held from YeAr 1040 or SmAll BuSineSS committed to pursuing a career in November 2009 – January 2010: QuickFinder—A $44 VAlue! accounting, helping to develop more qualified young accountants. This year, B • onus 2: Free AcceSS To The 2010 S • ign Your Work with Excellence income & FeeS SurVeY—A $125 28 students will receive scholarships (Creating a New Image for Your VAlue! ranging from $500 - $2,000. These Practice) B • onus 3: Free SuBScripTion To recipients were selected from more Dec. 17, 2009, 2:30 p.m. EDT cch’S WhAT’S neW in TAx—dAilY than 750 applicants on the basis of CPE Credit: 1 Hour/Business TAx & AccounTing neWS! an overall outstanding academic Management and Organization B • onus 4: $25,000 group Term liFe record, demonstrated leadership and D • oing the Right Thing, Even When inSurAnce AT no coST For 1 YeAr! participation in school and community the Right Thing is Unpopular activities, honors, work experience, January 21, 2010, 2:30 p.m. EDT Please feel free to contact me with stated goals and aspirations, and CPE Credit: 1 Hour/Regulatory any questions via email at rbraschcpa@ financial need. This year’s recipients Ethics verizon.net sponsored by PSPA are as follows: Jennifer Viens from Harrison City, Newest Member Benefit Respectfully submitted, PA (Penn Township) was the recipient NSA members will now get access to richard Brasch Jr., Cpa of the PSPA sponsored scholarship. free Tax Research and updates using NSA State Director - She attends the State University of New NSA’s newest member benefit, CCH Pennsylvania York at Binghamton. IntelliConnect. The free service is now Nathan Weaver from Harleysville, online on the member only webpage at PA (Buxmont PSPA Sponsored) was www.nsacct.org. the recipient of the Robert Zaleski Scholarship. He attends Messiah College. MEMBERSHIP PSPA once again contributed For a limited time only, The National 18 Fall 2009 RIA FEDERAL TAX HANDBOOK, 2010 Edition. Place Your Order Today and Pay Just $33! Designed to answer the tax questions of 2008 and the Emergency Economic Stabilization, Energy, and resolve the tax problems that arise Extenders and AMT Relief Acts of 2008. It also reflects other key in everyday business and personal developments (such as new regulations, rulings and revenue transactions. procedures) affecting the 2009 reture and the 2010 tax year. The RIA Federal Tax Handbook helps in preparing 2009 federal income tax returns The Handbook includes: and provides specific guidance to tax D • etailed coverage of the latest tax legislation consequences of transactions occurring C • urrent and future income tax rates, current estate, in 2010. The 2010 edition is now available in print and for gift and excise tax rates, excise and Social Security tax thresholds Checkpoint subscribers online. G • uidance on which forms to use to report transactions The RIA Federal Tax Handbook continues to be the premier A • nd extensive professional guidance based on the source for today’s federal tax law. experience of RIA’s expert editorial team C • heckpoint subscribers who receive the Handbook The 2010 Handbook reflects federal tax legislation to the date of online can utilize the RIA Speedlink icon to help them publication, including the American Recovery and Reinvestment enhance and speed their tax research. act of 2009, The Worker, Retiree, and Employer Recovery Act NAME ____________________________________________ FIRM ____________________________________________________ ADDRESS (Cannot Ship to a PO Box) __________________________________________________________________________ CITY __________________________________________________________________ STATE __________ ZIP ______________ PHONE (_____) ______________________________________ FAX (_____) ___________________________________________ E-MAIL _____________________________________________________________________________________________________ ria Federal tax handbook Quantity_________ @ $33 ________ Total (includes shipping) 6% Sales Tax: ($1.98 per book) ________ GRAND TOTAL: ________ Method of Payment: o Check Enclosed o Visa # ______________________________________________________ CV Code _______ Exp. Date ____________________ o Mastercard # ________________________________________________ CV Code _______ Exp. Date ____________________ Signature ___________________________________________________________________________________________________ Make check Payable to PSPA. Send to: pSpa attn: ria orDer 20 erford road, Suite 200a, lemoyne, pa 17043 19 Fall 2009 PRSRT STD U.S. Postage PA I D Permit No. 557 Harrisburg, PA P.S.P.A. • 20 ERFORD ROAD • SUITE 200A • LEMOYNE, PA 17043 Return Service Requested CLASSIFIED ADVERTISEMENTS ACCOUNTING PRACTICE(S) WANTED - PITTSBURGH, PA BUSINESS OPPORTUNITY - DAUPHIN OR Established accounting firm is interested in acquiring local accounting LEBANON COUNTY AREA practice(s). Interested persons should contact RLO & Company, CPA interested in purchasing a tax/accounting practice in Dauphin or Lebanon Robert L. Omer at 412-279-8110, firstname.lastname@example.org County Area. Interested parties should fax a letter of interest to the PSPA All responses will be held in strictest confidence. Executive Office at 717-737-6847. Please reference #0307 in your letter. BERKS OR EASTERN LANCASTER COUNTY If you are thinking of retiring, scaling back or your clients are just plain ACCOUNTING PRACTICE WANTED grating on your last nerve, I am interested in aquiring your practice... (while Lehigh Valley CPA Firm is seeking to purchase an accounting practice for I still have some nerve left). Contact me at John@johnandrascpa.com if retirement minded practitioners wishing to retire in the next year or two. interested. Interested parties should fax a letter of interest to the PSPA Executive Office at 717-737-6847. Please reference #230 in your letter. BUSINESS OPPORTUNITY OR mERGER Licensed tax professional in Yardley PA seeking to associate with The PA Accountant is published four times annually by the Pennsylvania like-minded practitioner. Inquiries to P.O. Box 417 Yardley, PA 19067 Society of Public Accountants, 20 Erford Road, Suite 200A, Lemoyne, PA 17043. All editorial correspondence, manuscripts, etc, should be sent to: PSPA, 20 Erford Road, Suite 200A, Lemoyne, PA 17043. This ACCOUNTING PRACTICE WANTED publication is designed to provide accurate and authoritative information CPA Firm located in Plymouth Meeting wishes to purchase an accounting in regard to the subject matter covered. The publication is not engaged in practice. Good opportunity for retirement minded practitioners wishing to rendering legal, accounting or other professional services. retire in one to two years. Please contact Fred Katz at 610-238-5311. Editor’s Note: If you would like to submit an article for publication please contact the PSPA Executive Office at 1-800-270-3352 or (717) 737-4439 for submission deadlines and for a copy of the author guidelines.
Pages to are hidden for
"2009-2010 PA Budget - Overview of Tax Changes Order Tax Season"Please download to view full document