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Trade Bills Pass Congress with Tax Provisions - Emil Estafanous, CPA : Emil Estafanous, CPA

Trade Bills Pass Congress with Tax Provisions

A taxation preparer chastisement relating to a warranted income taxation credit (EITC) will boost to $500, and a IRS will accept minute information about sovereign and state jail inmates, both measures in a contingent of unfamiliar trade agreements Congress upheld Oct 11.

The trade deals with South Korea, Colombia, and Panama upheld both a Senate and a House on a same day. They sanction agreements negotiated by a Bush administration with a countries 5 years earlier, and their thoroughfare had been advocated by President Barack Obama, who is approaching to pointer them. South Korean President Lee Myung-bak, in Washington on a state visit, seemed during a White House news discussion Thursday in that Obama praised a bipartisan support for a bills.

EITC Due Diligence Penalty

Section 501 of a U.S.-Korea Free Trade Agreement Implementation Act, H.R. 3080, increases a EITC due industry chastisement from $100 to $500. The Sec. 6695(g) 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.

Congress believes augmenting a chastisement will deter EITC noncompliance (see House Report 112-239);  a IRS has estimated that between 23% and 28% of EITC claims are improper. The increasing chastisement volume will request to earnings compulsory to be filed after Dec 31, 2011.

Last week, a IRS released due regulations (see “IRS Proposes Stiffer Preparer Requirements for EITCs”) that would also supplement new due industry mandate and procedures for a refundable credit in another bid to accelerate compliance. The due regulations would need preparers to contention an EITC eligibility checklist to a IRS rather than keep it in their annals as is now required. The due regulations would also make preparers’ firms as good as particular preparers potentially probable for a penalty.

Lists of Inmates

Section 502 of a Korea trade act adds (as new Sec. 6116) a requirement that a Federal Bureau of Prisons and state jail executive agencies annually send a IRS 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.

The legislation does not mention how or either a IRS contingency use a information; however, a IRS has pronounced formerly it lacks sufficient resources to pursue fake taxation refunds going to jail inmates. The Treasury Inspector General for Tax Administration reported in Dec 2010 that prisoners filed scarcely 45,000 fake earnings in 2009 for a sum of scarcely $300 million in crude refunds. The following month, Sens. Charles Schumer, D-N.Y., and Charles Grassley, R-Iowa, publicly called on a IRS to do some-more to stop invalid taxation fraud.

Corporate Estimated Taxes

The other dual acts are a U.S.-Colombia Trade Promotion Agreement Implementation Act, H.R. 3078, and a U.S.-Panama Trade Promotion Agreement Implementation Act, H.R. 3079. All 3 acts 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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