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President Signs Bill Increasing EITC Due Diligence Penalty - Emil Estafanous, CPA : Emil Estafanous, CPA

President Signs Bill Increasing EITC Due Diligence Penalty

President Barack Obama sealed into law on Oct 21 a trade agreement with South Korea (H.R. 3080) that increases from $100 to $500 a Sec. 6695(g) chastisement for disaster by preparers to practice due industry with honour to a warranted income taxation credit (EITC). Under another sustenance of a agreement, a IRS will accept minute information about sovereign and state jail inmates.

Congress upheld a Korea trade agreement on Oct 12, along with agreements with Colombia (H.R. 3078) and Panama (H.R. 3079), that a boss also sealed on Oct 21 (see “Trade Bills Pass Congress with Tax Provisions”).

The EITC chastisement relates to any disaster of a taxation lapse preparer to practice due industry in last taxpayer eligibility for, or a volume of, an EITC. The increasing chastisement volume will request to earnings compulsory to be filed after Dec 31, 2011. Earlier this month, a IRS due new regulations (see “IRS Proposes Stiffer Preparer Requirements for EITCs”) that would also supplement new due industry mandate and procedures for a refundable credit. The due regulations would need preparers to contention an EITC eligibility checklist to a IRS in further to gripping it in their records, as is now required. The due regulations would also make preparers’ firms as good as particular preparers potentially probable for a penalty.

The Korea trade act also requires a Federal Bureau of Prisons and state jail executive agencies to send a IRS annually a list of all inmates jailed in a jail complement during any time during a prior dual calendar years and a initial 8 months of a stream year.

All 3 trade acts also accelerate a volume of corporate estimated taxation due by companies with $1 billion or some-more in assets, by a total boost of 0.5% for a third calendar entertain of 2012 and 3.5% for a third entertain of 2016. Affected taxpayers might revoke their estimated taxation payments for a following entertain by a same amount.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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