|
IRS Agents Requesting Electronic Copy of QuickBooks Records
NATP has learned that IRS agents are being instructed to obtain a copy of the taxpayers data base for examinations for any taxpayer who uses QuickBooks. This will not be done in all examinations, only for those that the IRS agent deems necessary based on the judgment of the agent. If the taxpayer refuses to provide the database and the revenue agent (RA) or manager determines it is necessary, a Summons to obtain the information would be issued. The agents would look at only the information for the year under audit unless they decided to expand the examination to prior years, then information for those years would be reviewed.
The IRS has purchased 1,500 to 2,000 licenses from Intuit and will have one agent trained and licensed per group to assist others in the examination of taxpayers who use QuickBooks. You may not have heard of this yet, but as the software finds its way into RA groups and more agents are trained in its use, we could definitely be seeing a trend in the way exams are conducted since so many small businesses use QuickBooks.
New 1099 Rules Effective in 2011.
The passage of the Healthcare reform bill included some of the most drastic changes to 1099 information reporting in over a decade. The bill included revenue raising provisions meant to seek greater compliance of the tax code via 1099 information reporting. General provisions included:
Ø The elimination of the corporate exemption from 1099-MISC reporting. (Public Law 111-148)
Ø The requirement to report payments for property (goods, materials, merchandise, supplies, etc.). (Public Law 111-148)
Ø A six-fold increase in penalties from $250,000 to 1.5 million. (H.R.4213, H.R.4849)
Ø A doubling of penalties per record from $50 to $100. (H.R.4213, H.R.4849)
Beginning for payments made after December 31, 2011, companies will be required to furnish and file form 1099-MISC for payments made to all for-profit companies regardless of corporate status. In addition all payments for goods, materials, merchandise, supplies, and other property will need to be reported as well. Early indications reveal that these changes will likely cause the 1099 reporting volume to increase significantly for most companies as well as the associated B-Notices.
While the law applies to payments made after December 31, 2011 companies need to make broad changes to: 1) W-9 procedures to include all vendors. 2) Solicit W-9's for corporate vendors. 3) Prepare for larger 1099 year-end printing, mailing, and filing. 4) Make the appropriate budgetary and system updates to accommodate these changes.
2010 Standard Mileage Rates:
Beginning 1/1/10, the standard mileage rates for using a vehicle (including an auto, van, pickup, or panel truck) will be 50 cents per mile for business purposes, 16.5 cents per mile driven for medical or moving purposes, and 14 cents per mile for charitable purposes. The standard mileage rates for 2010 reflect lower transportation costs, so the new rates are slightly lower than last year's rates. A taxpayer using the business mileage rate treats the following amounts as depreciation: 16 cents per mile for 2003 and 2004, 17 cents per mile for 2005 and 2006, 19 cents per mile for 2007, 21 cents per mile for 2008 and 2009, and 23 cents per mile for 2010. A taxpayer cannot use the business mileage rate in certain situations (such as for vehicles used for hire, or five or more vehicles used simultaneously, such as in fleet operations) or if the vehicle was previously depreciated using a method other than straight-line (such as claiming the Section 179 deduction or bonus depreciation). News Release IR-2009-111 and Rev. Proc. 2009-54, 2009-51 IRB .
.
|
