accounting, audit, business advisory and tax services
New for the 2017 filing season, the employer deadline for Forms W-2 and 1099-MISC to be submitted to the IRS has changed. The new filing deadline is now the same as the due date for employers to issue these forms to recipients, January 31.
Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2017. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you.
There are many ways to save for a child’s or grandchild’s education. But one has annual contribution limits, and if you don’t make a 2016 contribution by December 31, the opportunity will be lost forever. We’re talking about Coverdell Education Savings Accounts (ESAs).
A tried-and-true estate planning strategy is to make tax-free gifts to loved ones during life, because it reduces potential estate tax at death.
Last month, the IRS issued Notice 2016-66, which classifies a significant number of micro- captive arrangements as “Transactions of Interest.”
Under this Notice, these arrangements are now subject to detailed reporting obligations. In addition, captive insurance companies, insured parties and certain owners, and other involved parties and advisors (including captive managers) are required to meet certain disclosure and recordkeeping requirements.
By January 30, 2017, parties that have entered into these “Transactions of Interest,” potentially going back to 2006, will have to file a disclosure statement with the IRS detailing the circumstances surrounding their involvement in the captive arrangement. The disclosures will be utilized by the IRS for various purposes including potential guidance and enforcement.
Failure to file a complete and accurate disclosure statement can present a stiff penalty. Taxpayers will face a penalty of 75% of the decrease in tax as a result of the transaction, with a minimum penalty of $10,000 and a maximum penalty up to $50,000.
Captive managers and other advisors are subject to a $50,000 penalty for each failure to file and a penalty of $10,000 per day after the 20th day of not filing an information list requested by the IRS.
Given these stiff penalties, it is critical that those affected by this Notice pay close attention to the specific requirements imposed.
We hope this information has been helpful to you, and if you have questions about how this notice may affect you, please contact your Whalen & Company representative.
Sources:
https://whalencpa.wpengine.com/
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