Small Business Taxes & Management

News and Tip of the Day


Small Business Taxes & ManagementTM--Copyright 2014, A/N Group, Inc.

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December 22, 2014

News

In an e-mail to IRS employees Commissioner Koskinen that hiring will be frozen with an exception for only a few mission critical positions. In addition, travel is being further The restricted and overtime eliminated except for critical situations. The Commissioner noted that the 2015 budget is comparable to the 1998 one after considering the effects of inflation, yet the IRS now receives 27.4 million more individual and 3 million more business returns than in 1998.

IRS Commissioner Koskinen has predicted the "upcoming filing season to be a very complex one". The Commissioner also indicated that the IRS is reprogramming its system to take into account the extenders package, but expects the filing season to open on time. He also noted that there are fewer people to perform audits and telephone service is expected to be significantly impacted.

Revenue Ruling 2014-34 (IRB 2014-52) provides tables of covered compensation under Sec. 401(l)(5)(E) for the 2015 plan year. The law defines covered compensation with respect to an employee as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

Tip of the Day

State estimated tax payments due . . . For most taxpayers the final estimated tax payment for state income taxes is January 15th. Many elect to pay that final installment in December to get a 2014 tax deduction. But before you do, check to see if you're going to be subject to the alternative minimum tax (AMT) this year and/or next. Because the payment is not deductible for AMT purposes, if you're hit with the tax in 2014 the payment will go unutilized. If you know you'll escape the AMT next year, it may be more beneficial to make the payment next year. For example, normally you're not subject to the tax, but this year you've got a large capital gain which ate up your AMT exemption. Best approach? Run the numbers with your tax software. There's a lot of factors to consider. Calling your tax advisor would be a good idea.

 

December 19, 2014

News

In Anthony E. Clifford (T.C. Memo. 2014-248) the taxpayer claimed the IRS Settlement Officer abused his discretion in rejecting the taxpayer's offer in compromise. The IRS claimed the taxpayer's offer was less than the taxpayer's reasonable collection potential (RCP) and, absent special circumstances, it could not accept an offer of less than the taxpayer's RCP. The Court found the Settlement Officer did not abuse his discretion by closing the case without soliciting another offer from the taxpayer, especially because the taxpayer's most recent offer was substantially below his RCP and because he was not in compliance with his current tax obligations.

Think twice before refusing to accept delivery of a tax notice. In Harold P. Kupersmit (T.C. Memo. 2014-247) the Tax Court held that by refusing delivery of notices of deficiency, the taxpayer repudiated his "opportunity to contest the notices of deficiency in this Court." He was precluded from challenging, both at a collection due process hearing and in Tax Court his underlying tax liability for the years at issue.

The IRS recently released Publication 5187, Health Care Law: What's New for Individuals and Families. The publication may be very helpful if you're doing your own return.

Tip of the Day

Asking rent vs. effective rent . . . If you're renting commercial property (e.g., office or retail space) the quoted asking rent or published rents may be very different than the effective rent. It's not just that the cost per square foot may be different, but there can be a number of other incentives or costs. For example, the asking rent may be $25 per square foot, but most landlords are giving five-months' free rent, providing an alterations allowance, etc. Or there can substantial rent steps that other landlords aren't writing. You've got to take those incentives or costs into account when comparing space or negotiating. A lease can be a significant expenditure, get good advice.

 

December 18, 2014

News

The Senate has passed the Tax Increase Prevention Act of 2014, or more popularly, the tax extenders package. The Act retroactively extends the provisions that expired at the end of 2013 for one year, through December 31, 2014. See our article Tax Extenders Package Passed for complete details.

Regulations Sections 1.6049-4(b)(5) and 1.6049-8(a) require the reporting of certain deposit interest paid to nonresident alien individuals on or after January 1, 2013. Revenue Procedure 2014-64 (IRB 2014-53) lists the countries with which the U.S. has in effect an income tax or other convention or bilateral agreement relating to the exchange of information.

As a result of severe storms and flooding during September 7-9, the president has declared the counties of La Paz and Maricopa in Arizona eligible for disaster assistance. Taxpayers in these counties who sustained losses as a result of the disaster can report them on their 2013 federal income tax return.

If the IRS tries to levy your property you may be able to stop the levy if you can show an abuse of discretion by the IRS. In Spencer Hosie et ux. (T.C. Memo. 2014-246) the taxpayers had outstanding liabilities for 2006 and 2011. The taxpayers asked for an installment agreement, but had defaulted on four previous installment agreements. They stated their intention to sell their personal residence by request that sale of their vacation home be delayed. After waiting for 3-1/2 months with no word from the taxpayers the Settlement Officer closed the case and sent the taxpayers notices of determination sustaining the collection actions for 2006 and 2011. The taxpayers argued the IRS abused its discretion by refusing to withdraw the notice of federal tax lien, (and contended it can complicate the sale of realty), and the Settlement Officer did not properly balance the need for efficient collection of taxes with the taxpayers' concerns that the collection action be no more intrusive than necessary. The Court found no abuse of discretion and granted the IRS summary judgment. The Court noted the Settlement Officer was generous. He was willing to consider a collection alternative despite the taxpayers' ten-year history of noncompliance, their default on four previous installment agreements, and their possession of $9.3 million of equity in their residence and vacation home.

Tip of the Day

Business related education expenses . . . Education expenses that maintain or improve skills that are required for your employment and those that are required by your employer for you to keep your job are deductible. For example, you're working as a licensed plumber for a contractor and take refresher courses or courses to learn about new developments in the field or in an area of plumbing where you aren't familiar would qualify for deduction. So would courses your employer requires you to take. Meeting the requirements can be tricky. One of the tests is would the courses qualify you for a new trade or business? If so, they're not deductible. The IRS has held that courses a accountant took so he could sit for the CPA exam were not deductible. Why? A CPA is a different trade or business than that of an accountant.

 

December 17, 2014

News

In Amazon.Com, Inc. and Subsidiaries (T.C. Memo. 2014-245) the taxpayer sought to quash a trial subpoena served by the IRS on Jeff Bezos, the founder, chairman of the board of directors, and chief executive officer of Amazon.com. The Court noted the parties conducted extensive discovery in the case. The IRS initially sought to depose up to 48 fact witnesses, and the taxpayer filed a motion for protective order pursuant to Rule 103 (Tax Court Rules) seeking to limit the total number of fact witnesses the IRS could depose. The IRS filed a response indicating that it wished to depose only 16 party and nonparty fact witnesses; the IRS did not list Mr. Bezos as one of those potential witnesses. In an order dated April 25, 2014, the Court permitted the IRS to depose a total of 12 witnesses; Mr. Bezos was not one of the individuals the IRS elected to depose. The IRS first identified Mr. Bezos as a potential witness in September 2014. In a pretrial memorandum, the IRS listed Mr. Bezos as a potential witness. The Court indicated it would postpone a ruling on the motion to quash until after the taxpayer had completed presentation of its case in chief, allowing the Court to better assess the IRS's need for Mr. Bezos' testimony. The Court felt that other witnesses comprehensively covered the subjects on which Mr. Bezos was to testify. The Court held that after balancing the IRS's need for the requested testimony against the burden on Mr. Bezos, it concluded that the burden imposed would be "undue" and granted the taxpayer's motion to quash the subpoena.

If you're going to make a claim of mental illness as an argument for not taking care of your tax obligations, you've got to keep the facts consistent. In Markus Brent Stanley (U.S. Court of Appeals, Fifth Circuit) the IRS argued his outstanding tax liabilities were not discharged in bankruptcy because he willfully attempted to evade his tax liability. The taxpayer argued that he failed the third prong of a three-pronged test to determine willfulness in tax evasion in that his bipolar disorder prevented him from voluntarily and intentionally attempting to evade payment of a tax. The Court noted that during the period in which he neglected his tax obligations, the taxpayer entered into several fairly complicated real estate transactions where he put the property in his wife's name, at least in part to protect it from being seized in the course of a lawsuit and made timely mortgage payments. Among other things he purchased a number of luxury items, and established a wholly-owned corporation, and paid various state taxes and a license plate fee on time. The Appeals Court upheld the district court's finding that the taxpayer willfully attempted to evade his federal income taxes.

Tip of the Day

Make hacking more difficult . . . If outsiders have access to your internal network through an internet or similar connection, there's virtually no way to fully protect the data on the network. But does all that data have to be accessible? The recent hacking of several major corporations brings this to light. Why is it necessary to have multiple years of e-mails instantly accessible? If it were on paper, boxes of the documents would be going to dead storage after three years. Social security numbers and sensitive personal information only should be accessible by human resources and payroll. Subcontractors should not routinely be allowed access. There's a lot you can do to make it more difficult for a hacker, albeit often at a cost of making access to information by employees less convenient. But the cost to the company resulting from the additional security is far outweighed by the direct and indirect costs if hackers steal sensitive financial data.

 

December 16, 2014

News

The IRS has published Rev. Proc. 2014-63 (IRB 2014-53) that will broaden what has been a limited post-appeals mediation procedure for offers-in-compromise and trust fund recovery penalty cases into a national program for more issues. The revenue procedure consolidates the procedures for mediation of examination cases and issues and collection cases and issues into a single revenue procedure. The revenue procedure supersedes Rev. Proc. 2009-44 and Announcements 2008-111 and 2011-6. Mediation after Appeals is not mandatory; it must be agreed to by both parties. Mediation is nonbinding; the mediator does not have settlement authority over any issue. and is available for legal issues and factual issues; it is not available for some issues specifically designated as inapplicable. You can find more information at Appeals Mediation Programs.

If you file a claim for refund and the IRS rejects the claim, you can take your case to U.S. Court of Federal Claims. That's what the taxpayer did in Jackie Ray Cearley (U.S. Court of Federal Claims). But the Court found that the taxpayer, a North Carolina state prisoner, had not pled sufficient facts to support a reasonable inference that he was owed a tax refund. The documents submitted were missing basic details and the taxpayer did not attach any form to show that he was entitled to a $20,024 tax refund, because there was no indication he paid that amount in taxes and that his claim was not plausible on its face. In addition, the taxpayer did not provide a valid tax return with his complaint. The Court held the taxpayer did not meet the requirements for a tax refund suit and granted the IRS's motion to dismiss for failure to state a claim upon which relief could be granted and for lack of subject matter jurisdiction.

Tip of the Day

Get the customer to spend when you want him to . . . There are certain times when store traffic is at a minimum. For a restaurant, it's often early in the week. You've probably got enough business on Friday and Saturday. Providing 25% off on bicycle tuneups before March 31 boosts sales during your slowest time. Helps the shop avoid the April/May crunch. By reducing your sales peaks and valleys you can avoid overtime and keep the staff busy. A steady cash flow will also help you reduce short term borrowing.

 

December 15, 2014

News

The IRS has issued final regulations (T.D. 9706) providing guidance relating to the provisions of the Hiring Incentives to Restore Employment (HIRE) Act that requires specified foreign financial assets to be reported to the IRS for taxable years beginning after March 18, 2010. The final regulations provide guidance relating to the requirement that individuals attach a statement to their income tax return to provide required information regarding specified foreign financial assets in which they have an interest.

The IRS's budget is under pressure from Congress while costs continue to rise because of additional mandates as well as an overall increase in costs. Taxpayers can expect a cutback in some services and longer wait times.

The IRS has announced that a new version of the Form 656-B booklet, with forms and instructions for submitting an Offer in Compromise (OIC), will be available on IRS.gov in January. The use of earlier versions after Jan. 1 will delay the processing of OIC applications.

Tip of the Day

Automate responses to inquiries . . . Still answering account questions using real people? Sometimes they're necessary. But you should try to let your computers do as much as possible such as providing information on shipping, account balances, inventory status, etc. The savings can be substantial. How much? The IRS estimates it costs about 17 cents to provide an automated answer to a taxpayer's question while using a live operator costs about $33. There could be reasons for the disparity other than simply using a human. For example, the questions posed the live operator could be much more complex. But there's no doubt the savings are significant. Moreover an automated response system can be on duty 24/7.

 

December 12, 2014

News

As a result of severe storms, tornadoes, straight-line winds and flooding during September 9-10, the president has declared certain counties in Missouri eligible for disaster assistance. Taxpayers who sustained losses attributable to the disaster in the counties of Adair, Andrew,, Atchison, Daviess, Gentry, Grundy, Harrison, Holt, Knox, Lewis, Linn, Livingston, Macon, Mercer, Nodaway, Putnam, Ralls, Shelby, Sullivan, and Worth may deduct losses on their 2013 federal income tax return.

FinCEN (Financial Crimes Enforcement Network) has issued an additional extension (Notice 2014-1) extending the filing date for Form 114-FBAR for certain individuals with signature authority over but no financial interest in one or more foreign financial accounts to June 30, 2016. For all other individuals with an FBAR filing obligation, the filing due date remains unchanged.

You don't always have to meet all the formal requirements for a formal claim. But an informal claim must meet three requirements, (1) writing delivered to the IRS within the period of limitations, (2) notice of the claim for refund and its basis, and (3) the Service waives the defect or the taxpayer perfects the claim before it is rejected. In Teresa Palomares a.k.a. Teresa Garcia (T.C. Memo. 2014-243) the Court held that requesting a refund of credits by filing Form 8379, Injured Spouse Allocation did not meet the informal claim doctrine.

Tip of the Day

Excess medical reimbursements by insurance company . . . What happens if you receive a reimbursement from your health insurance for more than the amount you paid? Is any part taxable? It depends. If you paid all the premiums with after tax funds, the excess is not taxable income. The same is true if your employer paid the premiums but the amount was included in your income. If you paid part of the premiums with after tax funds, part of the excess reimbursement is taxable. If you paid none of the premiums and no amount was included in your income, all the excess is taxable.

 

December 11, 2014

News

Senate Minority Leader Mitch McConnell has predicted that the Senate will pass the tax extenders bill passed by the House before leaving for recess on Friday, but Senate Majority Leader Harry Reid indicated that might not happen.

The IRS has announced (Notice 2014-79; IRB 2014-53) the standard mileage rates for substantiating the amount of deductible expenses for auto usage in 2015. For business use the rate will be 57.5 cents per mile (up from 56 cents per mile in 2014); for charitable use 14 cents per mile; and for medical or moving purposes, 23 cents per mile. The depreciation adjustment when using the standard mileage rate will be 24 cents per mile. The maximum vehicle cost when using the fixed and variable rate (FAVR) allowance will be $28,200 for autos and $30,800 for trucks and vans.

Senator Tom Coburn, (R. Okla) has released a report about the Internal Revenue Code. Called the "Tax Decoder" the document provides details on a myriad of tax breaks, more than a few used by wealthy individuals and large corporations, and discusses some of the complexities of the Code. The Tax Decoder notes that the original 1913 income tax statute was 27 pages long, in 2012 it was enough to fill 9,000 pages. Between 2001 and 2012 there were over 4,600 changes to the Code.

The IRS has reported (IR-2014-113) that it has begin issuing Records of Completion to tax return preparers who have met the requirements of a new voluntary program designed to help taxpayers determine return preparer qualifications in 2015. Participating practitioners in the new IRS Annual Filing Season Program (AFSP) for 2015 must complete the continuing education requirements by December 31, 2014. For more information go to www.irs.gov/Tax-Professionals/Annual-Filing-Season-Program

Tip of the Day

Participating in a trade show? . . . Check the rules in the state where the show is being held. One state's advisory opinion held that a company's participation at two 5-day trade shows was de minimus, too small a connection to subject it to the state's income tax. The corporation did not make any sales or take orders at the show. It merely displayed and demonstrated its products. If you limit your activities to simply demonstrating your products, you should be safe. Once you start taking orders or actually making sales, you'll have to check the laws for that state. That's for income tax purposes. Many states take the position that any sales at a trade show subject you to the sales tax. Again, check the rules carefully.

 

December 10, 2014

News

The Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) are refundable credits designed to help low-income individuals reduce their tax burden. The IRS estimated that it paid $63 billion in refundable EITCs and $26.6 billion in refundable ACTCs for Tax Year 2012. The IRS also estimated that 24 percent of all EITC payments made in Fiscal Year 2013, or $14.5 billion, were paid in error. The Treasury Inspector General for Tax Administration (TIGTA) initiated an audit because the IRS is required to identify and take actions to address the root causes of improper payments in Federal programs identified as being at high risk for improper payments. The only IRS program identified as a high risk is the EITC. The overall objective of the review was to assess the IRS’s efforts to identify and address the root causes of erroneous EITC and ACTC payments. TIGTA found that processes have been developed to identify improper EITC payments and their root causes. However, the IRS has not developed processes to quantify or identify the root causes of improper ACTC payments. The IRS has continually rated the risk of improper ACTC payments as low. However, TIGTA’s assessment of the potential for ACTC improper payments indicates the ACTC improper payment rate is similar to that of the EITC. Using IRS data, TIGTA estimates the potential ACTC improper payment rate for Fiscal Year 2013 is between 25.2 percent and 30.5 percent, with potential ACTC improper payments totaling between $5.9 billion and $7.1 billion. In addition, IRS enforcement data show the root causes of improper ACTC payments are similar to those of the EITC. Significant changes in IRS compliance processes would be necessary to make any significant reduction in improper payments. Expanded authority to make corrections to tax returns when data obtained from the Department of Health and Human Services indicate the taxpayer’s refundable credit claims are not valid would help reduce improper payments. TIGTA estimates such authority could have potentially allowed the IRS to prevent more than $1.7 billion in questionable EITC payments in Tax Year 2012. TIGTA recommended that the IRS ensure that the results of the ACTC Improper Payment Risk Assessment accurately reflect the high risk associated with ACTC payments, identify the root causes of the improper ACTC payments, and establish a plan to reduce erroneous payments. Furthermore, if correctable error authority is granted, the IRS should contract with the Department of Health and Human Services to obtain the complete National Directory of New Hires database.

Tip of the Day

Get someone else to sell your products . . . Selling can be one of the hardest parts of the business for many entrepreneurs. Some companies spend a large percentage of a product's selling price on marketing. And some companies spend very little. It often depends on the product, the market, competition, and other factors. While it won't work for all businesses, some form of co-operative marketing can often provide significant cost savings. The approach will depend on your product or service. In some cases it's easier to find a distributor, outside salesmen, etc. that going it alone.

 

December 9, 2014

News

It appears the extenders bill will go down to the wire--and maybe beyond. Friday, December 12th is the last day for action before recess and the Senate has indicated it will not pass the House version. While passage is still possible, it becomes more unlikely with every passing day. Making matters worse is there are several other bills pending of equal or greater importance.

Tip of the Day

Required minimum distribution . . . Taxpayers born before July 1, 1944, must generally receive payments from their individual retirement arrangements (IRAs) and workplace retirement plans by Dec. 31. Known as required minimum distributions (RMDs), these payments normally must be made by the end of 2014. But a special rule allows first-year recipients of these payments, those who reached age 70½ during 2014, to wait until as late as April 1, 2015 to receive their first RMDs. This means that those born after June 30, 1943 and before July 1, 1944 are eligible for this special rule. Though payments made to these taxpayers in early 2015 can be counted toward their 2014 RMD, they are still taxable in 2015. The required distribution rules apply to owners of traditional IRAs (not Roth IRAs) and to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans. While taxpayers who turned 70-1/2 in 2014 can delay receipt of their RMD, you may not want to do so. That would effectively double the distribution that would be taxable in 2015. That could result in more taxable income than in 2014. On the other hand, if you were still working in 2014 and your taxable income will be higher than in 2015 delaying receipt could save taxes.

 

December 8, 2014

News

You can deduct your gambling losses against winnings as an miscellaneous itemized deduction, however you've got to be able to prove your losses. In Armando Rios (U.S. Court of Appeals, Ninth Circuit) the taxpayer failed to keep records to support his deductions. In addition he did not testify as to his winnings and losses and produced no documents such as tickets, receipts, diaries, logs, canceled checks, credit records, or bank deposits or withdrawals the Court sided with the Tax Court in holding that there was no basis for applying the Cohan rule to estimate his losses because he did not establish that he was entitled to some deduction.

Tip of the Day

Track record important in securing a loan . . . If you're going for a loan, the lender is sure to look at your track record. A bad year may not be a deal breaker if you can explain the problem (recession, biggest customer going bankrupt, etc.). Going to a lender with only six months under your belt is unlikely to generate an audience, unless you've got a superproduct under patent. Talk to a CPA or financial advisor before going for a loan. He or she should be able to give you some guidance on whether or not your wasting your time and how to explain problems with your financials. Showing the lender you have no concept of what they're looking for may sour them on you for future lending as well as a current loan.

 

December 5, 2014

News

The IRS has announced (Rev. Rul. 2014-29) that interest rates will remain the same for the calendar quarter beginning January 1, 2015. The rates will be:

The House has passed a tax extenders bill (Tax Increase Prevention Act of 2014) that would extend all the important provisions that expired at the end of 2013--exclusion from income of debt forgiveness on principal residence; qualified tuition deduction; higher expensing limits for Sec. 179; bonus depreciation; work opportunity tax credit; 15-year straight-line recovery for qualified leasehold, restaurant, and retail improvement; extension of research credit. The bill goes to the Senate where passage is not guaranteed.

In Amir Safakish (T.C. Memo. 2014-242) the taxpayer was an engineer who also owned and operated an auto salvage yard and leasing business. The Court found the taxpayer provided no evidence he overstated his gross receipts from the auto business as claimed. The Court disallowed a number of the taxpayer's expenses for lack of substantiation. For some business travel the Court disallowed a deduction because he failed to show the business relationship.

Tip of the Day

Deduction for out-of-pocket costs for charitable work . . . You can deduct your costs of gas and oil directly related to volunteer work or you can take the standard mileage of 14 (2014 amount) cents per mile. You can also deduct out-of-pocket costs such as uniforms (if not suitable for everyday use) and the cost of cleaning the uniforms. You can't deduct the value of your services, nor can you deduct items such as child care incurred to perform the volunteer work. You can deduct amounts you pay to take underprivileged children to ball games, movies, etc. you can't deduct your portion of the costs. If you are a chosen representative attending a convention of a qualified organization, you can deduct unreimbursed travel expenses, including a reasonable amount for meals and lodging, which away from home overnight. You can only take a deduction if there is no significant element of personal pleasure, recreation, or vacation in the travel.

 

December 4, 2014

News

While the House is close to passing the "extenders" bill, whether or not the Senate will agree to the package is still unclear.

In James B. Budish (T.C. Memo. 2014-239) the taxpayer filed a return but did not pay the tax due. The IRS assessed the unpaid tax plus penalty and interest and issued a notice of intent to levy. The taxpayer requested and received a collection due process hearing which resulted in his agreeing with the Appeals officer on the terms of an installment agreement for full payment of his assessed liability. On the basis of her interpretation of relevant provisions of the Internal Revenue Manual (IRM) the officer insisted upon the filing of a notice of lien as a condition of entering into the installment agreement. The taxpayer argued that a notice of lien would destroy his business, rendering him unable to satisfy the terms of the installment agreement and he rejected the officer's proposal. Appeals then issued a notice of determination sustaining the notice of levy and authorizing collection by levy of the assessed liability. The taxpayer petitioned the Tax Court and alleged the officer abused her discretion by misinterpreting the requirements of the IRM and believing she had no choice but to require that a notice of lien by filed in conjunction with the installment agreement. The Court held the Appeals officer erroneously concluded that the IRM required the filing of a notice of lien. The Court also held the Appeals officer failed to balance the need for the efficient collection of the taxpayer's liability with his legitimate concern that collection action by no more intrusive than necessary as required by Sec. 6330(c)(3)(C). Finally, the Court held that the Appeals' determination to sustain the notice of levy and proceed with collection by levy was rejected and the case remanded to Appeals for a supplement collection due process hearing with direction to perform the balancing of factors required before determining the appropriate collection action.

Tip of the Day

Buy or build? . . . Almost every day you hear of a corporation acquiring another. Does it make sense? Like any other purchase, it depends on what you pay and what you get. Not a few businesses start out with a product or concept and grow rapidly, but eventually plateau. Organic growth becomes difficult to achieve for any number of reasons. At that point growing from within may be more costly than buying a firm that's in a new market, has a new product, etc. But an acquisition is not without its pitfalls. Many mergers don't pan out, often because the buyer pays too much, but frequently because the "fit" isn't good. A corporate culture that works for one business may not work for another. The first step is to analyze the potential acquisition carefully. Understand the business. Then don't focus on the target as though it's the only option and overpay.

 

December 3, 2014

News

While Senate and House leaders are working on an extenders agreement that would make permanent certain expired provisions. However, the President has indicated that we would veto a bill with those provisions if it jeopardized individual tax incentives.

In RSW Enterprises, Inc. et al. (143 T.C. No. 21) the taxpayers, domestic corporations, each established a retirement plan and received a favorable determination letter from the IRS regarding the plans' qualified status under Sec. 401(a). The IRS later revoked the plans' qualified status on the basis that each plan failed to satisfy the coverage requirements of Sec. 401(a)(3) and 410(b) and also failed to satisfy the minimum participation requirements of Sec. 401(a)(26). The taxpayers petitioned requesting declaratory judgments that the plans' qualified status should not have been revoked. The IRS sought summary judgment in its favor. The Court denied the IRS's motion for summary judgment because genuine disputes of material fact remained. The Court also held that it was not limited to considering the administrative record alone in a proceeding concerning a revocation where the parties disagree as to whether the administrative record contains all the relevant facts and as to whether those facts are in dispute.

Tip of the Day

Repair or replace? . . . If you ask a CPA he'll probably analyze current and anticipated repair costs, the cost of and operating savings from replacing the item, etc. and then do a discounted cash flow. While that's the correct approach for expensive machines, using a rule of thumb makes more sense for inexpensive items. Here are some thoughts:

For most appliances (washer, dryer, etc.) if the cost to repair is more than half the cost of a new item, you should probably replace. Exceptions may be an appliance that's only a few years old.

For autos and trucks, if the cost is more than half the vehicle's fair market value, replace. Temper the rule with the mileage on the vehicle and the general condition. Check the published repair history. You might want to replace if there are other major expenses on the horizon.

For computers, consider the software. Buying a new machine could mean replacing software, transferring files, etc. That could make repairing more attractive. Consider the age of the machine. A laptop that's used heavily and is more than three years old probably should be replaced if repair costs exceed 25 percent of the cost of a new machine.

Consider not only the cost of a replacement, but any efficiencies from replacing. For example, a new machine could provide faster production, less energy use, etc.

There are some machines that are rarely replaced. For example, airplanes that are not used in airline service have a very long service life. Most operators think nothing of paying $40,000 for a rebuilt engine for a single engine plane valued at $90,000. That's because the rest of the plane has many years of life left.

Can you find a suitable replacement? We think of all new products as being better than the old, but that's not always true, particularly when it comes to ruggedized equipment. Remaining DC-3s are more than 70 years old but the planes are still in service because they can land on unimproved fields, carry heavy loads, and use easily available fuel.

If you expect the question to recur regularly (e.g., you've got 20 laptops in the office) you might want to devise a rule of thumb for your business that will reduce any decision time.

 

December 2, 2014

News

The IRS's computer system uses coding to identify situations that either require special handling by the IRS or for which the IRS is awaiting the outcome of a future event. These situations are commonly referred to as freeze conditions. Taxpayer accounts in "credit" status (payments exceeding assessments) and also coded with at least one freeze condition are commonly referred to as frozen credit accounts. If freeze conditions are not adequately identified and resolved, IRS processing of taxpayer frozen credit accounts can be delayed and taxpayers can be adversely affected by delayed refunds or payments not applied to the proper tax modules. The Treasury Inspector General for Tax Administration (TIGTA) recently initiated an audit to determine with actions the IRS has taken to resolve both individual and business accounts with certain frozen credits. The audit found that the IRS has procedural requirements and standardized systemic checks in place to identify and resolve most frozen credit accounts. However, TIGTA determined that further action is needed to resolve some accounts. TIGTA made 10 recommendations to the IRS to help resolve the frozen credit accounts. For the complete report go to www.treasury.gov/tigta/auditreports/2014reports/201430089fr.html.

The IRS has announced that, beginning with Internal Revenue Bulletin 2015-1 it will no longer publish an index to the Bulletins due to the availability of electronic search tools. The Service will also eliminate the Bulletins on CD-ROM format and the Cumulative Bulletins.

The IRS has updated its Frequently Asked Questions: Annual Filing Season Program Web page. The FAQ answers many of the questions around the Annual Filing Season Program and provides information about the Directory of Federal Tax Return Preparers with Credentials that is expected to be launched by the IRS by January, 2015.

Tip of the Day

Price testing . . . Pricing a product can be one of the most difficult tasks for some businesses. Many industries have benchmarks. Cost to produce plus 50%, local hourly rate, what your competitor charges, etc. But what if you have a unique product or service? Price it too low and you're leaving money on the table; price too high and you may reduce your total revenue and allow competition to get a foothold. Often you can test the pricing by offering the product or service at several different prices. Too much work? We know one business that tested its product at $39 and $79. It sold more units at $79. The customers perceived the product was worth more at $79.

 

December 1, 2014

News

The IRS can issue a summons to get your records. But what will satisfy the summons? In Mehdi Ghafourifar (U.S. District Court, N.D. California, San Jose Div.) the taxpayer argued that he had already given the IRS his QuickBooks files produced in Microsoft Excel format and that the full files might contain privileged information. The information provided to the IRS were the financial statements from the QuickBook files. The Court noted that where the IRS already possesses copies of particular records obtained from the taxpayer, it cannot issue repeated summons for the exact same records. The Court also noted this requirement is construed narrowly and some redundancy as to requested information will not bar enforcement of a summons. The IRS sought a copy of the original electronic backup file of the QuickBooks books and records along with the password and version. The Court held that although the taxpayer provided certain information from the files, he did not produce the QuickBooks files themselves and the files are likely to have independent evidentiary value in the IRS investigation. The Court also dismissed other arguments and ordered the taxpayer to provide the requested information.

Tip of the Day

One big machine or several small ones? . . . Sometimes ordering one big machine to handle all the work of a department or company can make sense. One machine may cost less than purchasing a number of smaller ones to handle the same throughput. And the operating costs may be lower. On the other hand, if that machine goes down, you're out of luck. Purchasing several smaller ones can mean production is only reduced, not stopped. Look at all your options. How critical is the machine? Is fast service available? How much of a saving will there be using a single machine? Can you get an inexpensive backup? You may be able to get another machine to perform the same function, but at much slower speed or with more employees. Or you may just be able to keep an older machine in the corner that can be put on line quickly.

 

November 28, 2014

News

In William D. Evans et ux. (T.C. Memo. 2014-237) the Court found the taxpayers' sponsorship of their son's motocross motorcycle racing activities were ordinary and necessary business expenses. The motocross racing activity produced direct promotional benefits for the taxpayers' construction company.

If you rent your vacation home but use it for personal purposes more than 14 days or 10% of the number of days the dwelling is rented at a fair rental value your deductions are limited. In Mark A. Van Malssen et ux. (T.C. Memo. 2014-236) the taxpayers claimed the rental of a condominium for a week to the taxpayer's brother was at a fair rental value. However, the taxpayer provided no documentation that showed the amount paid. On a related issue the taxpayers were able to show the Court that they engaged in repair and maintenance work for a number of days and the Court found that these days were not considered personal. Some days were considered personal where the taxpayer was not primarily engaged in repair and maintenance.

Tip of the Day

What to reward customers? . . . Give a rebate or a gift card. Rebates are great if you make the customer do some work. For example, the item costs $75, but you give a $25 rebate, either in cash (or debit card) or as a gift card. The catch? The customer has to apply for it, either by mail or on line. There's a good chance (often more than 50% depending on the amount of the rebate) that the customer won't apply and you've sold the item for full price. If you provide a gift card, either with or without an application, the customer has to buy from you in the future. Chances are the customer will spend more than he would have, seeing the gift card as almost "free money". Or you might get the customer to spend it with you rather than your competitor. The best of all worlds? He doesn't use the gift card.

 

November 26, 2014

News

You can't deduct expenses associated with a business until you're actually in business. In James Clement Powell et ux. (T.C. Memo. 2014-235) the taxpayer could not deduct expenses associated with an activity of growing hops. The taxpayer testified he planted seeds, but whether conditions stalled their growth. The taxpayers provided no evidence they were successful in harvesting or selling any hops during the years at issue. The Court held the activity was not a functioning concern.

In Ronald L. Kirkpatrick, Sr. (T.C. Memo. 2014-234) the taxpayer was assessed a trust fund recovery penalty as the responsible person for employment taxes on a corporation he controlled. The taxpayer argued that the corporation had entered into an installment agreement to pay the taxes, and thus he should no longer be liable for the penalty. The Court noted that the Internal Revenue Manual (IRM) does not suggest that collection should be suspended on previously assessed trust fund recovery penalties of a responsible person. The Court found the settlement officer did not abuse her discretion in sustaining the proposed levy.

Tip of the Day

Try before you buy . . . Just what do you need? Many products are available in a dizzying array of options. While that's been true of vehicles for some time, it seems to now be true for many more products. For example, one chain saw manufacturer has over 10 different models with a similar size chain bar. Sometimes you can upgrade easily; sometimes adding an option after delivery can substantially increase the price of the option. In some cases it may be unavailable. Just forget the choices and go for the top-of-the line? If you're just buying one and the price difference isn't prohibitive, that approach may make sense. But if you're buying several units that can get expensive. Here are some thoughts:

 

November 25, 2014

News

Notice 2014-74 (IRB 2014-50) amends the two safe harbor explanations in Notice 2009-68, that can be used to satisfy the requirement under Sec. 402(f) that certain information be provided to recipients of eligible rollover distributions. Amendments to the safe harbor explanations reflected in this notice relate to the allocation of pre-tax and after-tax amounts, distributions in the form of in-plan Roth rollovers, and certain other clarifications to the two safe harbor explanations. The amendments to the safe harbor explanations (and attached model notices) may be used for plans that apply the guidance in section III of Notice 2014-54, with respect to the allocation of pretax and after-tax amounts.

The IRS has issued final regulations (T.D. 9705) relating to the requirement to maintain minimum essential coverage enacted by the Patient Protection and Affordable Care Act. The regulations provide individual taxpayers with guidance under Sec. 5000A. The regulations also provide guidance on the exemptions from that requirement.

The Treasury Inspector General for Tax Administration (TIGTA) performed an audit to determine whether the IRS has controls in place to provide reasonable assurance that outside employment requests are documented and reviewed for conflicts with employees’ official duties. IRS records indicate that, in Calendar Year 2011, nearly 3,000 of the more than 6,000 active, full-time IRS employees who held jobs or participated in business activities outside the IRS did not obtain documented approval, as required by Department of the Treasury regulations and IRS policies. IRS Human Capital Office management was generally not aware of the number of employees with unapproved outside employment because responsibility has not been assigned for overseeing the overall outside employment process. It will be difficult for the IRS to monitor outside employment because 93 percent of the existing records in the database used to compile outside employment requests are out of date. Improving controls will be important because TIGTA identified current and former IRS employees with both actual and potential conflicts of interest. One employee pled guilty to engaging in a criminal conflict of interest for accessing taxpayer information for the purpose of conducting a private tax and accounting business, 44 IRS employees prepared tax returns for compensation (a prohibited practice), and TIGTA’s analysis identified 20 employees with a high risk of potential conflicts of interest who received outside income without documented approval. For example, four employees operated businesses with annual gross receipts ranging from more than $500,000 to more than $7 million, and six employees had wages of more than $50,000 from outside of the IRS. Significant outside income could impact the employee’s effectiveness on the job. For the complete report go to www.treasury.gov/tigta/auditreports/2014reports/201410073Ffr.html.

The Department of Justice has announced the sentencing of Credit Suisse for conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS. Credit Suisse pleaded guilty to conspiracy earlier this year. There have also been indictments of seven Credit Suisse employees. At sentencing the U.S. District Court judge entered judgment for $1.8 billion dollars. The company will pay the Justice Department's Crime Victims Fund a fine of approximately $1.136 billion and the IRS $666.5 million in restitution. The agreement provides that Credit Suisse cannot challenge the restitution amount, which can also provide the basis for an IRS civil tax assessment. In the plea agreement Credit Suisse stated it employed a variety of means to assist U.S. clients including destroying account records sent to the U.S. for client review, structuring transfers of funds to evade currency transaction reporting requirements, providing offshore credit and debit cards to repatriate funds in undeclared accounts, and assisting clients in using sham entities.

Tip of the Day

Home sale exclusion . . . If you used part of your home for business, or rented it out, you can't claim the $250,000/$500,000 exclusion on that portion. For example, you have a $200,000 gain on the sale of your home but used 20% of the home for business. You've got to pay tax on $40,000 of the gain. On the other hand, if you sell the home for a loss, you can claim a loss on the portion of home used for business.

 

November 24, 2014

News

Revenue Ruling 2014-32 (IRB 2014-50) updates previous guidance on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringe benefits to employees. This revenue ruling also provides guidance on the use by employees of debit cards for paying mandatory shipping fees on transit passes. Finally, the revenue ruling provides that after December 31, 2015, employers may no longer provide qualified transit fringe benefits under a bona fide cash reimbursement arrangement in cases in which a terminal-restricted debit card is the only readily available transit pass in the employer’s geographic area.

Notice 2014-76 (IRB 2014-50) provides a list of the Sec. 5000A hardship exemptions that taxpayers may claim on a Federal income tax return without obtaining a hardship exemption certification from the Marketplace.

Revenue Procedure 2014-62 (IRB 2014-60) announces the indexed applicable percentage table in Sec. 36B(b)(3)(A) of the Code, which is used to calculate an individual’s premium tax credit for taxable years beginning after calendar year 2015. It also announces the indexed required contribution percentage in Sec. 36B(c)(2)(C)(i)(II) used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage for purposes of Sec. 36B for plan years beginning after calendar year 2015. Finally, the Rev. Proc. cross-references the required contribution percentage, as determined under guidance issued by the Department of Health and Human Services, used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage under Sec. 5000A(e)(1)(A) for plan years beginning after calendar year 2015.

Tip of the Day

Roth or traditional? . . . The earlier you put money in an IRA, the better. A one-time investment of $1,000 in a stock returning just 5% and you'll have $7,040 at the end of 40 years. Make the same investment 10 years later and you'll have only $4,322 at the end of 30 years. When you're in high school, college, or just starting to work you'll probably be in a low bracket, or may even be paying no taxes. The tax deduction of a traditional IRA won't give you any benefits. Go with a Roth. The same is true in a year you're in the 10% or even the 15% bracket, but are normally in a high bracket and expect the same when you retire.

 

November 21, 2014

News

Senate Finance Committee Chairman Ron Wyden, D-Ore. issued a statement after the GAO released a report on IRAs with large balances, also known as "mega IRAs". The GAO reported that for 2011 roughly 600,000 taxpayers had IRA accounts worth more than $1 million, and some 9,000 taxpayers had IRAs worth more than $5 million. That contrasts with the median IRA account balance of about $21,000.

The Department of Labor has announced the jurisdictions that will have a Federal Unemployment Tax Act credit reduction for 2014. Normally an employer can claim a credit of 5.4% on the first $7,000 of wages subject to FUTA for unemployment taxes paid to state or other jurisdiction, effectively reducing the 6% FUTA rate to 0.6%. However, if a state borrows from the Federal fund, an employer can't claim the full FUTA credit for that year. For 2014, California, Connecticut, Indiana, Kentucky, New York, North Carolina, Ohio and the U.S. Virgin Islands are credit reduction jurisdictions. Thus, after reduction the FUTA tax rates are 2.3% for Connecticut, 2.1% for Indiana and 1.8% for the other jurisdictions cited. Follow the instructions on Form 940 when completing the form next January.

Tip of the Day

Fees matter . . . Fees to manage investment accounts and mutual fund fees can vary widely. And often there's little correlation between performance and the fee. In some cases there's actually a negative correlation. The difference can add up to a substantial amount. For example, assume you're investing $500 a month and getting a return of 7% in one fund or a return of 6% in alternate fund because of an extra 1% fee. Over 40 years the 6% fund will accumulate to $995,700; the 7% fund will accumulate to $1,312,400--an extra $316,700. That's a substantial amount.

 

November 20, 2014

News

The IRS has issued final and temporary regulations (T.D. 9704) relating to the consequences to U.S. and foreign persons for failing to file gain recognition agreements (GRAs) or related documents or to satisfy other reporting obligations, associated with certain transfers of property to foreign corporations in nonrecognition exchanges. These regulations affect U.S. and foreign persons that transfer property to foreign corporations in nonrecognition exchanges.

The IRS has recently issued a number of updates to forms. Of particular interest are:

4684 Casualties and Thefts
8801 Credit for Prior Year Minimum Tax-Individuals, Estates, and Trusts
8889 Health Savings Accounts (HSAs)
8962 Premium Tax Credit
8965 Health Coverage Exemptions
2106 Employee Business Expenses

For the latest forms go to IRS.gov.

Tip of the Day

Covering up is usually a bad idea . . . It didn't work well when you were a kid, it's even less acceptable in business. Unlike your mother or father, customers, the press, etc. are likely to keep digging and when they find the truth the consequences are usually a lot worse than admitting a mistake up front. There may be legal implications so make sure your attorney is involved from the start. Don't wait for the disaster to happen. Have a plan for the likely disasters and a team to handle it. Chances are you know where you're vulnerable--a chemical manufacturer is most likely to have a defective product, a spill, or a fire. Any company dealing with food products is vulnerable to health hazards. The planning process should also provide valuable information on what you can do to reduce the impact and maybe even avoid the disaster.

 

November 19, 2014

News

For the past several years, the IRS had included fuel tax credit scams on its list of the "Dirty Dozen". (Taxpayers who purchase fuel with a highway use tax included in the price but use it off-highway, such as in a bulldozer, farm equipment, etc., are entitled to a credit.) The Treasury Inspector General for Tax Administration (TIGTA) initiated an audit to evaluate whether opportunities exist to improve the return classification and examination process for individual income tax returns claiming a fuel tax credit. The audit discovered that some returns above the threshold for manual screening were not properly coded for review. In addition, some 198,000 returns with fuel tax credit claims below the manual screening threshold amount that were questionable because they did not report any business income to support the business use of the fuel. As a result of just these two errors the IRS may have released payments of some $167 million over a three-year period. For the complete report go to www.treasury.gov/tigta/auditreports/2014reports/201430067Ffr.html.

Tip of the Day

Material participation in rental real estate . . . We've discussed this issue before. You may be able to deduct losses from rental real estate without regard for the usual $25,000 allowance if you can show you're a real estate professional. One way is by showing you've spent a certain amount of time in the real estate trades. In one recent case the taxpayer had a business installing automobile and residential glass. The Tax Court noted that in order to be in the real property trade or business he must be involved in construction or reconstruction. The Court found that installing original or replacement windows in newly built or existing buildings constituted construction or reconstruction, but cutting and installing mirrors and table tops, cutting and installing shower and bath glass enclosures, and replacing window panes did not. Would that mean hanging drywall would be construction but painting it would not be? If you're planning on claiming to be a real estate professional, get good advice.

 

November 18, 2014

News

In Janetta Lee Perry (T.C. Memo. 2014-231) the taxpayer filed a petition for redetermination with the Tax Court on June 6, 2014. Some 3-1/2 hours later that same day she filed a petition for bankruptcy with the U.S. Bankruptcy Court in California. The IRS moved to dismiss the Tax Court case for lack of jurisdiction on the ground that the automatic stay imposed by the bankruptcy law (11 U.S.C. sec. 362(a)(8)) operated to bar the commencement of a case in the Tax Court. The Tax Court held that the taxpayer filed her petition with the Tax Court before she filed her bankruptcy petition and thus before the automatic stay took effect. Thus, the taxpayer properly invoked the Tax Court's jurisdiction. The Court dismissed the IRS's motion.

Tip of the Day

Payments for physical injury . . . Awards from a lawsuit, settlement, etc. for physical injury are not taxable. But it's difficult to stretch the concept of physical injury. In one case the taxpayer was taking a drug for a recognized disability that had a side effect. At first his employer accommodated the problem from the side effect and permitted an exception from company rules but then disciplined him for violating company policy, eventually terminating him. The taxpayer filed a suit claiming the company discriminated against him because of his disability and that he suffered emotional distress, anxiety, depression and other damages. The employer settled the claim and agreed to pay $35,000 for a release. In the settlement $5,000 was allocated to lost wages. The court noted the settlement agreement made no mention of physical injuries or sickness. The claim of emotional distress is not physical. The court found the proceeds fully taxable.

 

November 17, 2014

News

There is more talk about the extenders package going through the House and Senate before the end of the year. There is also some indication that some of the provisions could be made permanent rather than expire at the end of 2014. That could provide less incentive for Congress to pass meaningful tax reform.

Tip of the Day

Medical marijuana business attractive? . . . Maybe not as much as you think. Currently Section 280E prohibits a deduction or credit for amy amount paid or incurred in carrying on a trade or business if the business consists of trafficking in controlled substances which is prohibited by Federal law or the law of any state in which the business is conducted. And, while medical marijuana may be legal in several states, it's still not legal under Federal law. That means the IRS will deny a deduction for your "cost of goods sold". That will increase your tax bill.

 

November 14, 2014

News

The IRS has released frequently asked questions and answers on the Additional Medicare Tax.

Using a private foundation for charitable contributions can provide some tax advantages, but you must file a Form 990-PF each year. In Grace Foundation, et al. (T.C. Memo. 2014-229) the return was due on May 15, 2004, but was not filed until February 16, 2011. The IRS assessed a delinquency penalty of $10,000 ($20 per day up to a maximum of the lesser of $10,000 or 5% of the gross receipts of the organization for the year. The taxpayer argued the IRS did not follow proper procedure since the Section requires the approval of an immediate supervisor before asserting this penalty. The IRS argued approval was not required because it was a penalty calculated through electronic means and managerial approval is not required. The taxpayer also argued that the Attachment to Notice of Determination erroneously referred to Section 6552 rather than Section 6652. The Court saw this as a typographical error and noted the taxpayer was not misled by the error. The Court rejected the taxpayer's arguments and allowed the penalty.

Tip of the Day

Self-constructed property . . . It's not that unusual for a taxpayer to self-construct property. A farmer who builds a new barn, the service business that has its own welders and machinists construct some new equipment, etc. The expense of the in-house labor used to construct the property can't be deducted as a current expense. Instead it has to be capitalized and depreciated as part of the equipment cost. There may be other costs that have to be capitalized. Talk to your accountant before starting the project to make sure you're capturing all the costs correctly.

 

November 13, 2014

News

In an audit, the Treasury Inspector General for Tax Administration (TIGTA) found that while e-filing of business tax returns continues to increase, the e-filing rate still lags behind that of individual tax returns. While 81 percent of individual tax returns were e-filed in 2012, only 41 percent of business returns were electronically filed. Employment tax returns provide the most significant opportunity for growth in business e-filing. For Tax Year 2012, more than 21.1 million (71 percent) employment tax returns were paper-filed. Processes have not been established to consistently ensure compliance with e-filing requirements and assessment of penalties. In addition, establishing a requirement for paid preparers to e-file business returns corresponding to the individual return requirement of 11 or more returns filed would result in an increase of electronically filed business returns. The review of Tax Year 2012 business tax returns found that the IRS could increase its e-filing rate by 23.8 percent and reduce IRS paper return processing costs by more than $17 million. TIGTA recommended that the IRS develop a business tax return e-filing Service-wide strategy, continue to expand the types of business tax returns that can be e-filed, and evaluate providing business filers with the option of Free Fillable Forms. In addition, the IRS should develop a less burdensome electronic signature process for employment tax returns, evaluate the feasibility of using the Electronic Federal Tax Payment System to e-file employment tax returns, and develop processes and procedures to consistently identify business filers that are not compliant with the e-filing requirements and assess penalties. www.treasury.gov/tigta/auditreports/2014reports/201440084Ffr.html.

The IRS has issued updated forms 8822, Change of Address and 8822-B, Change of Address or Responsible Party-Business. The Service has also released an updated version of Publication 509, Tax Calendars. The November 7th update corrects an error in an earlier version in the table of deposit dates for withheld and Social Security taxes.

Tip of the Day

What's your's is your's, what's mine is mine . . . The line between business and personal assets and expenses is often crossed in a closely held business. But that's exactly what the IRS often looks for in an audit, and, while usually unintentional, it can prove costly. For example, you purchase a building in your own name and lease it to your S corporation. Your attorney helps you draft a lease where the corporation pays you $5,000 a month (a fair rental). You're responsible for taxes, utilities, etc. You're off to a good start, but some time later things start to go awry. Here are some actions taxpayers have taken that can cause both tax and legal problems:

Some mistakes can be more costly than others. Many can be corrected, sometimes by some simple accounting entries. Talk to your accountant. If legal assistance is needed, talk to your attorney.

 


Copyright 2014 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536


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