IRS Digital Dispatch

Sun, 05 Dec 2004 15:35:04 -0800

IRS e-News for Tax Professionals - Digital Dispatch

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December 3, 2004

Issue: 2004-12-01

Inside This Issue:

  1. December Tax Talk Today Focuses on Upcoming Filing Season
  2. Quarterly Interest Rates Remain the Same for First Quarter of 2005
  3. Schedule M-3 Instructions Available
  4. IRS Simplifies Tax Deposit Rules for Small Businesses
  5. IRS Officials Urge Care for Those Making a Car Donation; New Law Changes Rules at End of the Year
  6. IRS and Treasury Issue Proposed Regulations on Partnership Transfers
  7. Recent Technical Guidance


  1. December Tax Talk Today Focuses on Upcoming Filing Season

    On Tuesday, December 14 from 2:00 pm - 3:00 pm ET, to help tax professionals prepare for the 2005 tax filing season, the Tax Talk Today webcast will bring together all the tax law changes and IRS processing issues that will impact filing returns for most individual taxpayers. The program will focus on the Earned Income Tax Credit, recent tax law, and hwo to avoid the most common errors. CPE credits are available. For more information or to participate please visit the Tax Talk Today Web site.


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  2. Quarterly Interest Rates Remain the Same for First Quarter of 2005

    The Internal Revenue Service has announced there will be no change in the interest rates for the calendar quarter beginning Jan. 1, 2005. The interest rates are as follows:

    • 5 percent for overpayments (4 percent in the case of a corporation)
    • 5 percent for underpayments
    • 7 percent for large corporate underpayments
    • 2.5 percent for the portion of a corporate overpayment exceeding $10,000

    To read the whole story please read news release IR-2004-144 located in the Newsroom section of the IRS.gov Web site.


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  3. Schedule M-3 Instructions Available

    The Treasury Department and Internal Revenue Service have released the final instructions for the Schedule M-3, Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More. Schedule M-3 is to be used by certain corporate taxpayers filing Form 1120, U.S. Corporation Income Tax Return. The original draft version of the Schedule M-3 instructions was released for public comment on March 10, 2004. The final draft version of the Schedule M-3 Instructions was issued on October 25, 2004. For more information please read press release JS-2123 located in the Press Room on the Department of Treasury Web site.


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  4. IRS Simplifies Tax Deposit Rules for Small Businesses

    The Internal Revenue Service has announced it will increase the minimum threshold for Federal Unemployment Tax Act (FUTA) deposits, a move that will reduce burden for more than 4 million small businesses.

    Under the new rules effective Jan. 1, 2005, employers are required to make a quarterly deposit for unemployment taxes if the accumulated tax exceeds $500. The current threshold is $100. For more information read news Release IR-2004-143 located in the Newsroom section of the IRS.gov Web site.


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  5. IRS Officials Urge Care for Those Making a Car Donation; New Law Changes Rules at End of the Year

    Next year, if the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale. For more information read news release IR-2004-142 located in the Newsroom section of the IRS.gov Web site.


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  6. IRS and Treasury Issue Proposed Regulations on Partnership Transfers

    The Treasury Department and the Internal Revenue Service have issued proposed regulations providing guidance for determining when a transfer of consideration to a partnership by a partner and a transfer of consideration from that partnership to a different partner constitute a disguised sale of a partnership interest. For more information please read news release IR-2004-41 located in the Newsroom section of the IRS.gov Web site.


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  7. Recent Technical Guidance

    Revenue Ruling 2004-109 and Revenue Ruling 2004-110 clarify that payments by employers to employees made in connection with employment contracts are wages for employment tax purposes. Both rulings revoke or modify prior rulings that failed to apply the correct interpretation of the statute and regulations. The rulings provide relief in certain circumstances from the application of the rulings to certain agreements entered into or payments made before January 12, 2005.

    Revenue Ruling 2004-112 provides guidance as to whether Internet activities conducted by trade associations meet the requirements for the exception to unrelated trade or business for qualified convention and trade show activity.


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    For more information on Federal Taxes please visit the IRS.gov Home Page

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