Askey Askey Associates CPA LLC

Tax Alerts

Tax Briefing(s)

Middle Class Tax Relief and Job Creation Act of 2012

2011 Tax Year In Review

ADVICE FROM THE EXPERTS… RALEY, WATTS & O’NEILL TOGETHER WITH ASKEY, ASKEY & ASSOCIATES CPA, LLC, ROBERT BURKE LAW FIRM AND PRINCIPAL FINANCIAL GROUP SPEAK ON LONG-TERM CARE AND 401(K) HOT TOPICS AND TRENDS

Chris King, Bill Frazer, Glenn Frank, III, Robert Burke, Marty Smith and Chris Persak provided valuable information regarding Long-Term Care and 401(K) Hot Topics & Trends to a group at the Southern Maryland Higher Education Center.

Bill Frazer detailed the reasons long-term care insurance can be effective and the benefits for employers and employees. An estimated 70 percent of people who reach the age of 65 will need some form of long-term care. Long–term care takes many forms and can take place at home, in an assisted living facility, retirement communities, senior centers or nursing homes. According to Bill Frazer, “Surveys have shown offering long-term care insurance is good for increasing employee retention, improving recruitment and attitude, and lowering absenteeism.”

Glenn Frank, III, CPA identified the tax implications for long-term care insurance premiums and the potential tax benefits for employers and employees. The IRS Code sections dealing with long-term care insurance premiums generally permit employees to exclude the benefit from gross income and employers to deduct the premiums that it pays. Long-term care also generally falls into two categories, which greatly impact the next step, financing the long-term care. Those two categories are “medically necessary” care and “custodial” care. Medically necessary care is covered by Medicare, but custodial care is not. “The only sound general rule about tax answers is “it depends”, said Glenn. “ The actual tax treatment of a specific transaction or groups of transactions is based solely on their exacting facts and circumstances.”

Robert Burke, PA identified ways people fund long-term care and provided legal advice. “Ultimately, the choices may be limited by how much money there is to finance the long-term care. People are often shocked at the expense of long-term care, so make sure you plan well in advance”, said Mr. Burke. “Specific provisions should be examined, since the possible conditions can be complex. Policies are appropriate for those with substantial income and assets to protect and who wish to buy this form of protection against the potential costs of long-term care.”

Chris Persak and Marty Smith closed the discussion identifying key advantages for 401(k) plans. A 401(k) plan may be the most important part of your retirement investment plan. Chris outlined how 401(k) plans are designed to help employees prepare for retirement and an employers’ commitment to a comprehensive employee benefit program helps employees stay healthy, feel secure and maintain a work/life balance. “Long-term care insurance will help protect employees’ assets and their retirement plan”, stated Marty. “It’s part of a complete financial strategy.”

“As we grow another year older we’re looking for the best ways to keep and grow our wealth”, said Chris King, Financial Advisor at Raley, Watts & O’Neill. “We need to stay on the cutting edge of these important employee benefits.”

Askey, Askey & Associates, CPA, LLC principals Robert & Catherine Askey, Glenn Frank, III and McClure Group Business Strategies, LLC principal Joe McClure are delighted to announce the formation of a strategic business alliance to better serve our respective clients and the government contracting community. This strategic alliance was formed for the specific purpose of providing the government contracting community with the highest quality of specialized accounting and financial services available in the Southern Maryland market.

Joe McClure is a highly accomplished business professional with over 30 years professional experience within the government contracting industry and the founder and President/CEO of McClure Group Business Strategies, LLC. Mr. McClure has built this business on the following guiding principles: honesty and integrity; personalized commitment to quality and customer satisfaction; and a dedication toward professional growth. These principles are the driving forces behind his success and will continue to be the unwavering priorities of his company’s future.

Prior to founding his company he was a highly successful Acquisition Specialist/Lead Program Manager for Indian Head Division, NSWC. During his employment at NSWC, he successfully operated and managed the contracts, exceeding objectives, and increasing operational efficiency levels within the government acquisition office processing over 400 million dollars in contracting annually. His resourceful and analytical nature resulted in improved operational efficiency. Mr. McClure is extremely skilled and adept at making decisions and multi-tasking during fast-paced and stressful situations. He possesses excellent interpersonal skills; is a strong communicator, conveys expert knowledge of complex regulations, procedures, and instructions for procurement functions, operations, program requirements, and work methods. Mr. McClure is exceptionally skilled at maintaining positive relationships while working to resolve problems.

Askey, Askey & Associates, CPA, LLC has extensive experience in all of the traditional roles of the accounting professional, as well as experience in some nontraditional areas. In addition to being a certified public accountant (CPA), Robert Askey is also a certified fraud examiner (CFE) and a certified forensic financial analyst (CFFA). As a CFE and CFFA, Mr. Askey is specially trained to perform financial examinations for the express purpose of detecting financial fraud. Mr. Askey also has over 30 years of concentrated experience in the field of taxation.

Catherine Askey, CPA is a certified valuation analyst (CVA) and maintains the Accredited in Business Valuation (ABV) credential, administered by the AICPA. The CVA & ABV training and designation provides Ms. Askey with the technical ability to perform qualified business valuations for the purpose of buy-sell agreements, succession planning, purchase and sale transactions, estate taxation, and litigation related matters. Ms. Askey also leads strategic planning events, team advisory boards, and customer advisory boards.

Glenn Frank, III, CPA brings experience in a wide variety of business consulting in tax related activities such as corporation, S-Corporation and partnership planning; individual tax planning, and administrative dealings with the Internal Revenue Service. He has detailed experience within many industries including government contractors, technology, real estate and construction, wholesalers and retailers, telecommunications, restaurateurs, professional and legal service organizations.

Janice Rohme, CPA is one of the leaders in our government contracting practice. Ms. Rohme works with a number of government contractors using various accounting software to account for their business operations. She leads three certified QuickBooks Pro Advisors on the Askey, Askey & Associates, CPA, LLC team and she has been a certified QuickBooks Pro Advisor, providing installation, training and support as a QuickBooks Pro Advisor since 1999. Ms. Rohme also has significant experience in business and individual tax compliance and planning.

Askey, Askey & Associates, CPA, LLC and McClure Group Business Strategies, LLC are already providing the government contracting and project based commercial community with the highest quality accounting and financial services available in the Southern Maryland region.

It is once again that dreaded time of year when law abiding Americans must “voluntarily” file their annual income tax returns. And once again the choices we face in accomplishing that task accurately and economically are far more daunting than ever before.

“Tax simplification” has apparently been buried deep within the halls of Congress. Each year our tax laws become increasingly complex. It is virtually impossible for the average citizen to prepare their income tax return without some kind of help. Typically that help comes in one of three alternatives: (1) help from the IRS; (2) help using off-the-shelf computer software; and (3) help from paid income tax return preparers. Since most taxpayers don’t believe that the IRS will actually “help” them, let’s focus on the other two.

Off-the-shelf tax preparation softwares promise free preparation, free e-filing, and free printing. Some even “guarantee” you your biggest tax refund possible. But is anything in life actually “free?” And what exactly is “guaranteed?”

Be sure to read the fine print. Typically “free” means you can complete part of the process, but anything additional is fee based. And “guaranteed” typically means that if you answer all questions correctly the calculations that result will be accurate. It does not guarantee that your tax liability will be correct. The software cannot determine if you are answering the questions completely and accurately and have included all of your information.

And will the software programmers be there when the IRS comes a calling? No. These providers rely on the fact that only a small percentage of the returns they process are audited by the IRS so in the event of an additional assessment the most the software company has to lose is the refund of the fees that you paid. Often this will not cover the interest assessed on the tax deficiency.

This is not to suggest that off-the-shelf tax preparation softwares should never be used. If the simplicity of the tax situation coupled with the competency of the person entering the data is properly matched, these softwares can produce reasonably accurate returns.

So what is the alternative to using the IRS taxpayer assistance or off-the-shelf tax preparation software? Hire a paid income tax return preparer. Simple, right? No, not at all. Just because someone charges you a fee to prepare your return is no guarantee that your return will be prepared correctly or accurately.

Until recently, paid income tax return preparers have for the most part been virtually unregulated. The IRS has created some new requirements for tax preparers, but will it be enough to shake all of the unqualified preparers out of the system? Probably not right away. Should you still be concerned? Absolutely!

Remember that when you sign your income tax return you attest under penalties of perjury that you have examined the return and it is true, correct and complete. Your paid preparer only declares that the return is accurate based upon that of which he/she has been made aware. In all likelihood, you will be the only one faced with interest and penalties if that return is not correct.

Our office has recently encountered two situations in which incompetent tax preparation has resulted in substantial tax deficiencies and interest upon IRS examination. Both taxpayers paid relatively significant fees to their preparers and were provided terribly deficient products in return. In one case the original preparer would not return calls relative to the examination. In the other the preparer was unqualified to adequately represent the taxpayer in the examination.

So where will your preparer be in the event your return is examined by the IRS? Will they be there to stand behind their work and represent you before the IRS? The statistical likelihood of an IRS examination may be slim, but proper, qualified representation is critical when it does occur.

The IRS has stepped up enforcement activity recently for two very simple reasons: (1) voluntary compliance with the tax laws has declined in recent years, and (2) the IRS is the Federal government’s collection agency and the Federal government needs revenue. Don’t you want to know that the professional preparing your return will be there to assist and defend you when the IRS shows up asking questions?

Anyone considering engaging a professional to prepare their income tax return should do so very carefully. Would you allow a surgeon from Peggy’s Online University perform surgery on your child? Would you invest your life savings with someone without determining if they have a criminal history? Hopefully not. Your due diligence in selecting an income tax return preparer should be no less.

Here are some helpful hints in choosing a competent income tax return preparer,

Avoid preparers who claim they can obtain larger refunds than other preparers.
Avoid preparers who base their fee on a percentage of the amount of the refund.
- Use a reputable tax professional who signs your tax return and provides you with a copy for your records.
- Consider whether the individual or firm will be around to answer questions about the preparation of your tax return months, or even years, after the return has been filed.
- Review your return before you sign it and ask questions on entries you don't understand.
- Never sign a blank tax form.
- Is the preparer a Certified Public Accountant (CPA), Enrolled Agent, or Tax Attorney?
- Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection and appeals.
- Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
- Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?

Robert W. Askey, CPA, CFE, CFFA is the managing partner of Askey, Askey & Associates, CPA, LLC, a duly licensed MD certified public accounting, and experienced income tax preparation firm dedicated to the financial success and security of our clients. We can be reached on the web at www.aaacpa.com or contacted by telephone at either of our local offices: Leonardtown 301-475-5671; La Plata 301-934-5780.

The IRS has released much-anticipated temporary and proposed regulations on the capitalization of costs incurred for tangible property. They impact how virtually any business writes off costs that repair, maintain, improve or replace any tangible property used in the business, from office furniture to roof repairs to photocopy maintenance and everything in between. They apply immediately, to tax years beginning on or after January 1, 2012.

These so-called “repair regulations” are broad and comprehensive. They apply not only to repairs, but to the capitalization of amounts paid to acquire, produce or improve tangible property. They are intended to clarify and expand existing regulations, set out some bright-line tests, and provide some safe harbors for deducting payments.

The regulations are an ambitious effort to address capitalization of specific expenses associated with tangible property. The regulations affect manufacturers, wholesalers, distributors, and retailers—everyone who uses tangible property, whether the property is owned or leased. The rules provide a more defined framework for determining capital expenditures.

Most taxpayers will have to make changes to their method of accounting to comply with the temporary regulations and will need to file Form 3115. Taxpayers who filed for a change of accounting method following the issuance of the 2008 proposed regulations will probably have to change their accounting method again.

The IRS has promised to issue two revenue procedures that will provide transition rules for taxpayers changing their method of accounting, including the granting of automatic consent to make the change. The regulations require taxpayers to make a Code Sec. 481(a) adjustment; this means that taxpayers will have to apply the regulations to costs incurred both prior to and after the effective date of the regulations.

The new regulations provide rules for materials and supplies that can be deducted, rather than capitalized. The rules provide several methods of accounting for rotable and temporary spare parts, and allow taxpayers to apply a de minimis rule so that they can deduct materials and supplies when they are purchased, not when they are consumed.

Costs to acquire, produce or improve tangible property must be capitalized. The regulations address moving and reinstallation costs, work performed prior to placing property into service, and transaction costs. Generally, costs of simply removing property can be deducted, but costs of moving and then reinstalling property may have to be capitalized.

To determine whether a cost incurred for property is an improvement, it is necessary to determine the unit of property. Generally, the larger the unit of property, the easier it is to deduct expenses, rather than have to capitalize them. The regulations provide detailed rules for determining the unit of property for buildings and for non-building tangible property. For buildings, the IRS identified eight component systems as separate units of property, requiring more costs to be capitalized. However, the new rules also provide for deducting the costs of property taken out of service, by treating the retirement as a disposition.

The new regulations require virtually every business to review how repairs, maintenance, improvements and replacements are handled for tax purposes, with both mandatory and optional adjustments made to past treatment as appropriate.

Please feel free to call this office for a more targeted explanation of how these new regulations impact your business operations.

If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.

The fate of the employee-side payroll tax cut along with a host of tax extenders and other expired provisions could be decided in coming weeks. A conference committee of House and Senate members is negotiating a full-year extension of the payroll tax cut and could add some or all of the tax extenders to a final package. Lawmakers also could extend the payroll tax cut without acting on any tax incentives.

Payroll tax cut

The Temporary Payroll Tax Cut Continuation Act of 2011 extended the employee-side OASDI tax cut through the end of February 2012. The employee-share of OASDI taxes is 4.2 percent for the two-month period, rather than 6.2 percent. The employer-share of OASDI taxes remains at 6.2 percent for the two month period. Self-employed individuals also benefit from a two percentage point reduction in OASDI taxes.

Unless extended, the employee-share of OASDI taxes is scheduled to revert to 6.2 percent after February 29, 2012. The White House and the leaders of the two parties in Congress agree that the payroll tax cut should be extended a full-year. They disagree, however, how to pay for the extension; even if it should be paid for at all.

Congress could extend the two-month payroll tax cut through the end of 2012 without paying for it. The 2011 payroll tax cut was unfunded. Congress appropriated to the Social Security trust funds amounts equal to the reduction in payroll tax revenues. The 2011 payroll tax cut was estimated by the Congressional Budget Office cost approximately $111 billion. Extending it through the end of 2012 is estimated to cost just as much if not more.

House Republicans reportedly have proposed a number of revenue raisers to offset the cost of extending the payroll tax cut through the end of 2012. One GOP proposal would extend the current pay freeze for employees of the federal government. Another GOP proposal would require higher-income individuals to pay increased Medicare premiums.

One possible revenue raiser, increasingly under discussion by Democrats, is a change in the taxation of so-called carried interest. Current law generally taxes carried interest as capital gains and not as ordinary income. Past efforts to change the tax treatment of carried interest have failed to pass Congress.

Extenders

The so-called tax extenders, popular but temporary tax provisions, expired at the end of 2011. Many taxpayers are surprised to learn that their particular tax break, whether it be the state or local sales tax deduction, the teachers’ classroom expense deduction, or the research tax credit, are temporary. The extenders have been routinely revived many times in the past. This year, however, could be different. Faced with record federal budget deficits, lawmakers may decide to extend only some of the expired provisions.

President Obama’s FY 2013 proposals

President Obama is expected to release his fiscal year (FY) 2013 federal budget proposals in early February, which will reignite debate over the Bush-era tax cuts. President Obama is expected to urge Congress to allow the Bush-era tax cuts to expire after 2012 for higher-income taxpayers, which President Obama defines as individuals earning more than $200,000 or families earning more than $250,000. In recent weeks, there has been speculation that President Obama may revisit those definitions in his FY 2013 budget, possibly raising the amounts.

Few Capitol Hill observers expect Congress to take any action on the Bush-era tax cuts before the November elections. Instead, Congress may take up some of President Obama’s other proposals. As in past budgets, President Obama will likely propose to extend some energy tax breaks for individuals and businesses, extend tax incentives for education and provide some targeted-tax breaks to businesses. President Obama has also promised to introduce proposals to encourage U.S. companies to “insource” jobs at home.

On some issues, such as energy and education, lawmakers may find common ground but negotiations are likely to go down to the wire. Our office will keep you posted of developments.

If you have any questions about the payroll tax cut, tax extenders or the various tax proposals under discussion, please contact our office.

The IRS reopened its offshore voluntary disclosure program in early 2012 in response to what the government described as strong interest among taxpayers. The reopened program, the third of its type in recent years, encourages taxpayers with unreported foreign accounts to make full disclosures in exchange for a reduced penalty framework. Like its predecessors, the terms and conditions of the reopened program are very complex. The IRS has promised to provide more details. In the meantime, the prior offshore disclosure programs are guides to how the IRS intends to implement the third, reopened program.

Previous disclosure programs

The IRS launched two previous offshore disclosure initiatives: one in 2009 and another in 2011. Both programs offered reduced penalties in exchange for full disclosure. In early 2012, the IRS reported it received 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. The government has collected over $4.4 billion from the 2009 and 2011 programs. The IRS predicted it will collect more revenue as it continues to work cases.

Reopened program

The reopened program operates very similarly to the 2009 and 2011 programs but with some key differences. The previous programs were temporary. The 2011 program ended in mid-September 2011. The reopened program has no set end date. The IRS cautioned, however, that it could close the program at some future date. The decision to end the program is solely at the discretion of the IRS.

The reopened program requires taxpayers to file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as pay accuracy-related and/or delinquency penalties. Additionally, taxpayers must pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. In comparison, the highest penalty in the 2011 program was 25 percent. IRS officials have said that the penalty was increased because the agency does not want to reward taxpayers who did not participate in the 2009 or 2011 disclosure programs because they anticipated that a future penalty would be lower.

In limited circumstances, taxpayers may qualify for a 12.5 percent penalty or a five percent penalty. Generally, taxpayers whose offshore accounts or assets did not surpass $75,000 in any calendar year may qualify for the 12.5 percent penalty.

The requirements for the five percent penalty are very narrow. The IRS has explained that taxpayers must meet four conditions: (1) The taxpayer did not open or cause the account to be opened; (2) the taxpayer exercised minimal, infrequent contact with the account, for example, to request the account balance, or update account holder information such as a change in address, contact person, or email address; (3) except for a withdrawal closing the account and transferring the funds to an account in the United States, the taxpayer did not withdraw more than $1,000 from the account in any year for which the taxpayer was non-compliant; and (4) the taxpayer can show that all applicable U.S. taxes have been paid on funds deposited to the account (only account earnings have escaped U.S. taxation).

The penalty amounts in the reopened program are not set in stone, the IRS cautioned. It may eventually increase penalties in the program for all or some taxpayers or defined classes of taxpayers.

Quiet disclosures

One goal of the three programs is to caution taxpayers against so-called “quiet disclosures.” A quiet disclosure occurs when a taxpayer files an amended return and pays any tax delinquency without making a formal voluntary disclosure. The IRS warned taxpayers making quiet disclosures that they risked being sanctioned to the fullest extent allowed by law.

Critics

The offshore disclosure programs were not without their critics. The National Taxpayer Advocate recently told Congress that the IRS should streamline what is a very complicated process. The National Taxpayer Advocate also reported that IRS examiners were assuming that all violations were willful unless a taxpayer presented evidence to the contrary. It is possible that the IRS may revisit some of the terms and conditions of the reopened program in light of the National Taxpayer Advocate’s report.

If you have any questions about the reopened offshore voluntary disclosure program, please contact our office.

Taxpayers with children should be aware of the numerous tax breaks for which they may qualify. Among them are: the dependency exemption, child tax credit, child care credit, and adoption credit. As they get older, education tax credits for higher education may be available; as is a new tax code requirement for employer-sponsored health care to cover young adults up to age 26. Employers of parents with young children may also qualify for the child care assistance credit.

Dependency Exemption

In addition to the personal exemption an individual taxpayer may take for him or herself to reduce taxable income (Line 42 on Form 1040), that taxpayer may also take an exemption for each qualifying dependent who has lived with the taxpayer for more than half of the tax year. A dependent may be a natural child, step-child, step-sibling, half-sibling, adopted child, eligible foster child, or grandchild, and generally must be under age 19, a full-time student under age 24, or have special needs. The amount of the exemption is the same as the taxpayer’s personal exemption, $3,700 for the 2011 tax year and $3,800 for the 2012 tax year.

Child Tax Credit

Parents of children who are under age 17 at the end of the tax year may qualify for a refundable $1,000 tax credit. The credit is a dollar-for-dollar reduction of tax liability, and may be listed on Line 51 of Form 1040. For every $1,000 of adjusted gross income above the threshold limit ($110,000 for married joint filers; $75,000 for single filers), the amount of the credit decreases by $50.

Child and Dependent Care Credit

If a taxpayer must pay for childcare for a child under age 13 in order to pursue or maintain gainful employment, he or she may claim up to $3,000 of his or her eligible expenses for dependent care. If one parent stays home full-time, however, no child care costs are eligible for the credit.

Adoption Credit

Taxpayers who have incurred qualified adoption expenses in 2011 may claim either a $13,360 credit against tax owed or a $13,360 income exclusion if the taxpayer has received payments or reimbursements from his or her employer for adoption expenses. For 2012, the amount of the credit will decrease to $12,650, and in 2013 to $5,000.

Higher Education Credits

There are two education-related credits available for 2012: the American Opportunity credit and the lifetime learning credit. The American Opportunity credit amount is the sum of 100 percent of the first $2,000 of qualified tuition and related expenses plus 25 percent of the next $2,000 of qualified tuition and related expenses, for a total maximum credit of $2,500 per eligible student per year. The credit is available for the first four years of a student's post-secondary education. The credit amount phases out ratably for taxpayers with modified AGI between $80,000 and $90,000 ($160,000 and $180,000 for joint filers). The lifetime learning credit is equal to 20 percent of the amount of qualified tuition expenses paid on the first $10,000 of tuition per family. The phaseout for 2012 ranges from $52,000 to $62,000 ($104,000 to $124,000 for joint filers). Parents also find tax relief in saving for college though Coverdell accounts, section 529 plans and specified U.S.. savings bonds.

Extended Health Care Coverage

Effective since September 23, 2010, the new health care law requires plans to provide coverage for children until they attain age 26. Further, effective on or after March 30, 2010, children under the age of 27 are considered dependents of a taxpayer for purposes of the general exclusion from income for reimbursements for medical care expenses of an employee, spouse, and dependents under an employer-provided accident or health plan. Therefore, a plan must provide coverage to a child who is still a dependent up to age 26; but can do so up to age 27 without income tax consequences. A child includes a son, daughter, stepson, or stepdaughter of the taxpayer; a foster child placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction; and a legally adopted child of the taxpayer or a child who has been lawfully placed with the taxpayer for legal adoption.

Child Care Assistance Credit (for businesses)

Employers may take up to $150,000 of the eligible costs of providing employees with child care assistance as tax credit. These costs may include a portion of the costs of acquiring, constructing, improving, and operating a child care facility.

If you have any questions about these provisions and how they may benefit you, please contact our office.

The Treasury Department is authorized to offset a taxpayer’s tax refund to satisfy certain debts. A spouse who believes that his or her portion of the refund should not be used to offset the debt that the other spouse owes may request a refund from the IRS.

Offset

If an individual owes money to the federal government because of a delinquent debt, the Treasury Department’s Financial Management Service (FMS) can offset that individual's tax refund (and certain other federal payments) to satisfy the debt. The debtor will be notified in advance of the offset.

A taxpayer’s refund may be reduced by FMS and offset to pay:

Past-due child support
Federal agency non-tax debts
State income tax obligations, or
Certain unemployment compensation debts owed a state.

FMS advises taxpayers by written notice of an offset. FMS has explained that the notice will reflect the original refund amount, the taxpayer’s offset amount, the agency receiving the payment, and the address and telephone number of the agency. FMS will notify the IRS of the amount taken from your refund.

Form 8379

If a taxpayer filed a joint return and is not responsible for the debt of his or her spouse, the taxpayer may request his or her portion of the refund by filing Form 8379, Injured Spouse Allocation, with the IRS. Form 8379 may be filed with the original return or by itself after the taxpayer is aware of the offset.

The IRS has instructed taxpayers filing Form 8379 by itself to attach a copy of all Forms W-2 and W-2G for both spouses, and any Forms 1099 showing federal income tax withholding to Form 8379. Failure to attach these items may result in a delay in processing by the IRS.

The IRS has reported on its website that it generally processes Forms 8379 that are filed after a joint return has been filed in approximately eight weeks. The timeframe for processing a Form 8379 that is attached to a joint return is approximately 11 weeks (14 weeks if the joint return is filed on paper).

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of February 2012.

February 1

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates January 25–27.

February 3

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates January 28–31.

February 8

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 1–3.

February 10

Employees who work for tips. Employees who received $20 or more in tips during November must report them to their employer using Form 4070.

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 4–7.

February 15

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 8–10.

Monthly depositors. Monthly depositors must deposit employment taxes for payments in January.

February 17

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 11–14.

February 23

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 15–17.

February 24

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 18–21.

February 29

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 22–24.

March 2

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 25–28.

March 7

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 29–March 2.