Tuesday, June 27, 2017

Meals aren't always ONLY 50% deductible!

Pregame Away Day Meals Were Fully Deductible De Minimis Fringe Benef

A professional hockey team, organized as an S corporation, was entitled to deduct the entire cost of pregame meals for players and personnel at away games. The meals qualified as de minimis fringe benefits.
Although the contracts between the team and the hotels were not titled “leases,” the team paid consideration “to use and occupy” the hotel rooms where the meals were served. While the team did not pay separate consideration for the rental of the meal rooms, those rooms were essential to the team’s away game operations; in addition to meals, the team used the rooms to conduct team business. Further, the facility was operated by the team because the team contracted with the hotels to operate eating facilities for its employees.
The pregame meals were mandatory and the players used the time to meet with coaches and review game film and with public relations staff to prepare for interviews. In addition, the coaches, trainers and management used meal time to meet among themselves and make roster adjustments. The evidence also established that the team could not perform all of these activities at the opponent’s arena because of limited access and insufficient space and facilities. Moreover, without the preparatory activities that occurred at the hotels the team’s performance during games would likely be adversely affected. Thus, the hotels were vital to the team’s business objective (winning hockey games) and were where a significant portion of the traveling employees’ responsibilities and team business were conducted.
Finally, the pregame meals were provided to the traveling employees for substantial noncompensatory business reasons, including for nutritional and performance reasons, and were provided before, during or after the employees’ workday. Therefore, the meals qualified as de minimis fringe benefits and were not subject to the 50-percent limit on business meals.
Thanks to CCH for pulling this info together.

Tuesday, June 20, 2017

How to get IRS transcripts online

Issue Number:    How to Use Get Transcript Online

Inside This Issue

Here is a video tax tip from the IRS:
How to Use Get Transcript Online   English | Spanish | ASL
Subscribe today: The IRS YouTube channels provide short, informative videos on various tax related topics in English, Spanish and ASL.

Wednesday, June 07, 2017

Employers, your workforce expects to get raises!

Payroll problems may be the fastest way to send top talent to the exits. According to a new survey from The Workforce Institute at Kronos Incorporated, about half of the American workforce (49 percent) will begin searching for a new job after experiencing just two issues with their paycheck, an alarming rate that highlights the fragility of a carefully cultivated employee experience if organizations can’t first deliver on core business processes.

Part two of the “Engaging Employees through Payroll” series surveyed more than 1,000 U.S. employees to examine the hidden costs of payroll errors and explore the vital role payroll professionals serve in building an engaging employee experience. Part one revealed payroll problems affect 82 million U.S. employees, which is more than half (54 percent) of the American workforce.


Little patience for problems: nearly half of American workers (49 percent) will seek new employment after just two payroll mistakes, such as being paid late or incorrectly.
    Approximately one in four employees – 24 percent – will look for a new job after the first payroll mistake, while another 25 percent will seek new employment after the second issue.

    Salaried employees are more likely than hourly workers to start looking for a new job after the first problem (29 percent versus 19 percent.)

    Nearly a third of parents (30 percent) will kick off a job search after the first error (compared to 16 percent of non-parents), while men (29 percent) are more likely than women (17 percent) to do the same after just one issue.

Effective managers are vital: employees look to their direct supervisor before anyone else for help, making this a critical role to resolve pay issues through effective guidance.

    More than one in four employees (26 percent) say they would first turn to their manager, direct supervisor, or boss for help fixing a mistake.

    About one-fifth of employees (19 percent) would report their payroll problem directly to their human resources department, while 14 percent would turn to their payroll department.

    Surprisingly, seven percent of employees say they would not report a payroll error to anyone. Just four percent are not sure who they would turn to for help correcting a paycheck error.

Generational differences exist: Baby Boomers are most forgiving of payroll errors and have the deepest understanding of their paychecks.

   Nearly half (44 percent) of American employees aged 55 and older say they would stay at their job as long as they are eventually paid correctly. That’s in stark contrast to their colleagues aged 18-29 (13 percent,) 30-39 (17 percent,) and 40-54 (27 percent,) who are much less willing to stay even if they’re eventually paid correctly.

    Just 19 percent of Baby Boomers find the taxes and deductions on their paycheck confusing to read and understand. They once again outperformed other generations, as 45 percent of employees aged 18-29 found their paychecks confusing, while more than half (53 percent) of employees aged 30-39 were confused, along with 38 percent of those aged 40-54.

    While 43 percent of employees aged 18-29 and more than half (52 percent) of employees aged 30-39 have been forced to make a late payment on a bill such as a credit card, car loan, or home/apartment due to a payroll problem, just one in ten (11 percent) Baby Boomers report having ever encountered a similar situation.

Everyone wants a raise: an overwhelming majority of U.S. workers feel they deserve an annual pay raise.
    According to the survey, 84 percent of all employees expect a pay raise each year they stay with their organization, with hourly (85 percent), salaried (83 percent), young employees aged 18-29 (81 percent), Baby Boomers 55+ (81 percent), female (88 percent), and male (80 percent) respondents in nearly universal agreement.
Thanks to ADP for pulling this information together.

FATCA registration gets revamped

The Internal Revenue Service has updated its online registration system for the Foreign Account Tax Compliance Act to allow foreign financial institutions to renew their agreement with the IRS.

FATCA was included as part of the HIRE Act of 2010, requiring foreign banks and other financial institutions such as hedge funds to report on the holdings of U.S. citizens to the IRS, or else face stiff penalties of up to 30 percent on their income from U.S. sources. The controversial law led to the Treasury Department signing intergovernmental agreements with the tax authorities of other countries, in most cases allowing foreign banks to first send the information to their own country’s tax authorities, who in turn forward it to the IRS. The IRS had to delay the rollout of the initial online registration system in 2013, but now the FATCA FFI Registration system has been updated to allow foreign financial institutions to renew their agreement with the IRS.

From the home page link of “Renew FFI Agreement,” the financial institution will first need to determine whether it must renew its FFI agreement. The IRS is providing a table of guidelines to help them make this determination. Once they decide, the system allows a financial institution to review and edit its registration form. The financial institution will need to verify and update its registration information and submit to renew the FFI agreement.

Those institutions who are required to renew their FFI agreement and don’t do so by July 31, 2017, will be treated as having terminated their FFI agreement as of Jan. 1, 2017, the IRS warned Tuesday, and they may be removed from the FFI List. The IRS said all financial institutions should login to the system for this determination. For help logging in, see the FATCA FFI Registration system FAQ's.

The system update includes several new fields for renewing the FFI agreement, such as the renewal date and submitted date, along with information on account home pages. The IRS said the new system will notify all approved financial institutions of the renewal open period and due date to renew the FFI agreement. The due date for all renewals is July 31, 2017.

The system instructions and online help have been updated for the Renewal of FFI Agreement. The FATCA Registration User Guide has also been updated to include the necessary steps for financial institutions to renew their FFI agreement.

Along with system fixes, the update within the registration application includes the removal of the classification of “limited” for FIs and FI branches, as that classification option won’t be available anymore for new FI applicants or for renewing FIs. Two other changes in the new release are the inclusion of a warning banner, and the number of attempts to unsuccessfully login have now been reduced to three.
Thanks to Mike Cohn for this information!

Thursday, June 01, 2017

Sales tax holidays!

  • Alabama (July 21-23) Exemptions apply to purchases of clothing ($100 or less per item), computers (single purchase up to $750), school supplies, art supplies or school instructional materials ($50 or less per item) and books ($30 or less per item). Not all counties and municipalities are participating - so check the state link for a list of participating locations.
  • Arkansas (August 5-6) Exemptions apply to purchases of clothing and footwear ($100 or less, per item), clothing accessories ($50 or less per item), school supplies, art supplies and school supplies. All retailers are required to participate and may not charge tax on items that are legally tax-exempt during the Sales Tax Holiday.
  • Connecticut (August 20-26) Exemptions apply to purchases of clothing and footwear ($100 or less per item), excluding clothing accessories, protective or athletic clothing, and certain shoes including ballet, bicycle, bowling, cleats, football, golf, track, jazz, tap, and turf (but note that aerobic, basketball, boat, and running shoes are exempt).
  • Florida (June 2-4) Exemptions apply to items for disaster preparedness including reusable ice (reusable ice packs) selling for $10 or less; any portable self-powered light source (powered by battery, solar, hand-crank, or gas) including flashlights, lanterns and candles, selling for $20 or less; any gas or diesel fuel container, including LP gas and kerosene containers selling for $25 or less; Batteries, including rechargeable batteries (but excluding automobile and boat batteries) and coolers selling for $30 or less; tarps, radios and tie-down kits selling for $50 or less; and portable generators used to provide light or communications, or to preserve food in the event of a power outage selling for $750 or less.
  • Florida (August 4-6)  Exemptions include clothing, shoes, wallets, handbags and backpacks that cost $60 or less. Computers that cost less than $750 and school supplies, such as pens, pencils, binders and lunch boxes that cost less than $15 are also included.
  • Louisiana (August 4-5) Provides a 2% exemption from the state sales tax, meaning eligible purchases are subject to only 3% state sales tax.
  • Missouri (August 4-5) Exemptions apply to purchases of clothing ($100 or less per item), school supplies ($50 or less per purchase), computer software ($350 or less), personal computers or computer peripheral devices ($1,500 or less) and graphing calculators ($150 or less). Some cities have opted not to participate (check the website for specifics) although in those circumstances, the state's portion of the tax rate (4.225%) will remain exempt.
  • New Mexico (August 4-5) Exemptions apply to purchases of footwear and clothing, excluding accessories ($100 or less per item); school supplies ($30 or less per item); computers ($1,000 or less per item); computer peripherals ($500 or less per item); and book bags and backpacks ($100 or less per item).
  • Ohio (August 7-9) Exemptions apply to purchases of clothing ($75 or less per item). Note that the exemption applies to clothing selling for $75 or less: if an item of clothing sells for more than $75, tax is due on the entire selling price. Exemptions also apply to school supplies ($20 or less per item) and instructional materials ($20 or less, per item). 
  • Oklahoma (August 5-7) Exemptions apply to purchases of clothing and footwear ($100 or less per item). The exemption does not apply to the sale of any accessories, special clothing or footwear primarily designed for athletic activity or protective use that is not normally worn except when used for athletic activity or protective use, or to the rental of clothing or footwear. Qualified items are exempt from state, city, county and local municipality sales taxes.
  • South Carolina (August 4-6) Exemptions apply to purchases of clothing, clothing accessories and footwear (excluding rentals), school supplies and computers.
  • Tennessee (July 28-30) Exemptions apply to purchases of clothing ($100 or less per item), computers ($1,500 or less) and school and art supplies ($100 or less per item). Apparel that costs more than $100 remains taxable, as do items such as jewelry, handbags, or sports and recreational equipment.
  • Texas (August 11-13) Exemptions apply to most clothing, footwear, school supplies and backpacks priced less than $100.
  • Virginia (August 4-6) Exemptions apply to purchases of clothing and footwear ($100 or less per item) and school supplies ($20 or less per item). Sports or recreational items are not exempt from tax. The holiday also applies to hurricane and emergency preparedness items, and Energy Star™ and WaterSense™ products. 

  • The following states (marked with an *) are expected to offer a sales tax holiday this year but the information has not been confirmed:
  • Iowa* (August 4-5) Exemptions apply to purchases of clothing or footwear (up to $100 per item); for any item that costs $100 or more, sales tax applies to the entire price of that item.
  • Maryland* (August 13-19) Exemptions apply to purchases of clothing and footwear ($100 or less per item) including sweaters, shirts, slacks, jeans, dresses, robes, underwear, belts, shoes, and boots priced at $100 or less. Accessories, including jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, belt buckles, and backpacks will remain taxable, as will special clothing or footwear designed primarily for protective use and not for normal wear, such as football pads.
  • Mississippi* (July 28-29) Exemptions apply to purchases of clothing and footwear ($100 or less per item regardless of how many items are sold at the same time); accessory items such as jewelry, handbags, wallets, watches, backpacks, and similar items are not included. Footwear does not include cleats and items worn in conjunction with an athletic or recreational activity.
* Updated to reflect that Georgia did not renew their sales tax holiday for 2017.
Just ended:
  • Louisiana (May 27-28) A 2% state sales tax exemption applies to the first $1,500 of the purchase price of hurricane preparedness items, including portable self-powered light source, including candles, flashlights and other articles of property designed to provide light; any portable self-powered radio, two-way radio, or weather band radio; any tarpaulin or other flexible waterproof sheeting; any ground anchor system or tie-down kit; any gas or diesel fuel tank; any package of AAA-cell, AA-cell, C-cell, D-cell, 6 volt, or 9-volt batteries, excluding automobile and boat batteries; any cell phone battery and any cell phone charger; any nonelectric food storage cooler; any portable generator used to provide light or communications or preserve food in the event of a power outage; any storm shutter device; any carbon monoxide detector; and any reusable freezer pack such as "blue ice."
  • Texas (May 27-29) Exemptions apply to purchases of energy star products. You can buy, rent or lease only the following ENERGY STAR-labeled items tax free: air conditioners (with a sales price of $6,000 or less); refrigerators (with a sales price of $2,000 or less); ceiling fans; incandescent and fluorescent light bulbs; clothes washers; dishwashers; dehumidifiers; and programmable thermostats.
This list is meant to provide general guidelines for state sales tax holidays. Some states are pretty specific about what you can exempt so be sure to click on the links to your individual state's revenue announcement for more details. Also keep in mind that some states offer counties and towns the option not to participate so again, check with your state if you have questions.