Earlier this year, Citibank upset many card holders as it issued 1099-MISC Forms to customers reporting the value of miles acquired over the past year, sometimes adding hundreds of dollars to cardholders’ taxes. As the Journal of Accountancy reports, a class action lawsuit seeks to discontinue the practice and gain clarity as to the IRS’ position. “The law is vague at best, and the instructions to Form 1099-MISC call for reporting of “prizes and awards” as income.   While conservative, Citibank’s approach may not be unreasonable under the circumstances. Penalties for nonfilers of Forms 1099 were recently increased to as much as $100. Read More.

The Financial Accounting Standards Board (FASB) recently approved another revision to its intangible asset impairment testing guidance to simplify how an entity tests indefinite-lived intangible assets for impairment. Previously, annual testing was required and consisted of determining the fair value of the asset and then comparing the fair value to the carrying value. If the carrying amount was higher, then an impairment loss would be recognized. The update, ASU 2012-02, allows taxpayers to evaluate the likelihood of impairment on a qualitative basis using surrounding events and circumstances before having to go through the often costly process of determining the fair. Read More.

The Financial Accounting Standards Board (FASB) recently approved another revision to its intangible asset impairment testing guidance to simplify how an entity tests indefinite-lived intangible assets for impairment. Previously, annual testing was required and consisted of determining the fair value of the asset and then comparing the fair value to the carrying value. If the carrying amount was higher, then an impairment loss would be recognized. The update, ASU 2012-02, allows taxpayers to evaluate the likelihood of impairment on a qualitative basis using surrounding events and circumstances before having to go through the often costly process of determining the fair. Read More.

With the annual tax gap estimated at $450 billion, taxpayers can expect increased IRS compliance activity to be a large part of Treasury efforts to reduce the U.S. deficit. As Corporate Taxation Insider reports, the tax gap is caused mostly by taxpayer underreporting (84%), followed by underpayment (10%), and nonfiling (6%). The article outlines seven overarching efforts that are likely to address the complexities of closing the tax gap over the next decade, some of which include: 2. Increase compliance rate to 90% by 2017. The voluntary compliance rate is the amount taxpayers actually pay versus what they should report and pay. The. Read More.

In the most recent session of the Georgia State Legislature, Governor Deal and lawmakers passed several changes to tax laws that will affect nearly all residents: Tax Changes for Individuals Tax Exemptions Increase for Married Filers Beginning 2013, married taxpayers filing jointly will receive an exemption of $7,400, a marked increase of the current $5,400 exemption. Those married filing separately will be entitled to an exemption of $3,700. The personal exemption for unmarried individuals remains unchanged at $2,700. Motor Vehicle Property Tax Phased Out Vehicles purchased and titled after March 1, 2013 will no longer fall under existing sales and. Read More.