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Audit Guides Help IRS Review Nonprofit Organizations

The Internal Revenue Service (“IRS”) wants to help nonprofits and their tax preparers avoid the possibility of being audited. Available for download on the IRS website are Audit Technique Guides for nonprofits exempt under IRC Section 501(c)(3) and other IRC Section 501(c) sub-sections. Used by IRS staff members, the guides give insight into what the IRS examines when deciding whether to audit tax-exempt organizations. More on the IRS’ Audit Technique Guides is available on the Nonprofit Quarterly website. Need help with audits? Contact a member of our Education or Nonprofits group.

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Help! The Government Took My Money and Gave it to a State!

By: John Ford , Senior Consultant, Government Contractor Services Group We all know from folk lore that the IRS can seize property from a taxpayer if the taxpayer is delinquent in paying its Federal taxes. However, did you know that the government can seize money from a taxpayer and pay it to a state? Cherry Bekaert’s GovCon Group recently had a client receive a notice that funds had been withheld on a contract with the Department of State related to a state income tax liability that the client and our tax department had received no prior notices of delinquency. After the outrage. Read More.

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Online FAFSA Tool Temporarily Down for Months

An online tool used by students to help them complete the Free Application for Federal Student Aid (“FAFSA”) might be unavailable for several months. In a joint statement last week, the Department of Education and Internal Revenue Service said the tool will be down until security protections are implemented. The added security measures are aimed to protect the taxpayer data of those who submit an application. Students should expect the tool to be back at the start of the next FAFSA season on October 1. More on the FAFSA online tool is available on the Inside Higher Ed website.

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Lower Standard Mileage Rates in 2017

For the second straight year, the Internal Revenue Service (“IRS”) has lowered the standard mileage rates for vehicles used for business purposes. The IRS announced that the 2017 rate will decrease 0.5 cents to 53.5 cents per mile. Also dropping is the mileage rate for medical or moving purposes; the rate next year will be 17 cents per mile (19 cents in 2016). More on the 2017 standard mileage rates is available on the Journal of Accountancy website.

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Loan Forgiveness Available for Qualified Student Loans

In case you missed it last year, the Internal Revenue Service (“IRS”) issued a revenue procedure (“Rev. Proc.”) that offers loan forgiveness to certain federal student loans. Rev. Proc. 2015-57 addresses tax implications for the discharge of student loans under the “closed school” and “defense to repayment” processes. Under the guidance, qualifying taxpayers can exclude from their income student loans discharged under either process. In addition, any prior-year deductions and/or tax credits a taxpayer receives under Rev. Proc. 2015-57 are not added back to the gross income and/or tax liability during the year the student loan is discharged. More on. Read More.

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Tuition Expense Reporting Rule Changes Proposed

The Internal Revenue Service (“IRS”) recently proposed regulations to change how students report qualified tuition and related expenses on Form 1098-T. Impacting higher institutions required to file Form 1098-T and taxpayers who can claim an education tax credit, the changes would align with the Tax Code amendments under the PATH Act and Trade Preferences Extension Act. More on the proposed regulations on tuition expense reporting is available on the Accounting Today website.

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