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2010 IFS Tax Corner. . . . . . . . . . . . . . . . . . . . . . . . . . January 28, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . December 7, 2009 – Big tax newsThis will be the first of a regular posting here. We will try to keep the topics to those of interest to our clients and avoid chatter. Two items to report this morning. Estate TaxOn December 3rd, last Thursday, the House passed the Permanent Estate Tax Relief for Families, Farmers and Small Businesses Bill of 2009. Basically, the Bill permanently extends the top federal estate tax rate of 45% with a $3.5 million exclusion ($7 million for married couples who fully utilize their exclusions). The House Bill also provides for the continuation of the gift and generation-skipping transfer tax provisions as they currently exist. The effect of the House Bill is the elimination of the one-year repeal of the federal estate tax and the establishment of some permanency to the estate and gift tax law. The maximum tax rate would be set at 45%, the estate tax exclusion at $3.5 million and the gift tax exclusion at $1 million. The basis of property received via an estate would continue to receive a stepped up basis to the value on the date of death. Of course the Senate is busy with health care reform, making the likelihood of the Senate taking up the House Bill before year-end unclear to remote. Further, the vote in favor of the House bill was 225 to 200 and lacked the support from the GOP, making the odds of passage in the Senate something less than a given. We will keep you posted on this issue. . . . . . . . . . . . . . . . . . . . . . . . . . . New IRS Enforcement InitiativesWe at Beason & Nalley have been feeling something very clearly this past year. I say “feeling” only because it seemed very real but with no confirmation from the Internal Revenue Service. We just received that confirmation. With the backdrop of government revenue shortfalls and enhanced technology combined with a poor economy in which it is difficult to raise tax rates, it is probably obvious that the Treasury/Service is looking for means to increase revenue with the laws on the books. The U.S. Government Accountability Office, Internal Revenue Service, in their Review of the Fiscal Year 2010 Budget Request, provided a Return on Investment analysis of four major initiatives. Three of the four, along with anticipated cost, revenue and ROI are as follows: Improve reporting compliance of small business/self-employed taxpayers The bottom line is obvious. The Internal Revenue Service is increasing compliance efforts and technology is making the need for good accounting and qualified tax preparation ever more important. . . . . . . . . . . . . . . . . . . . . . . . . . . Also see: |
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