Reminders... October 17th is the deadline for filing 2015 individual income tax returns. No additional extension is available. Employers on a monthly payroll tax deposit schedule, need to deposit payroll taxes via EFTPS for settlement on or before October 17th.
Mike Henderson, CPA attended the course 'Farm Income Tax Cases, Rulings and Legislative Update' as part of his annual continuing education. One of the topics raised related to charitable contribution issues raised during recent IRS audits. The IRS is using a narrower interpretation of tax law to deny legitimate deductions, and so far, are withstanding legal challenge. Here are two of the most common issues:
1. Must have a contemporaneous, written receipt for contributions of $250 or more. In this case, contemporaneous means received and in your possession before you file your tax return. If they question a contribution during the examination, you are not allowed to go to the charity at that point and get a receipt.
2. The receipt must contain the wording “No goods or services were received in return for this contribution”. Some specific variations of this are also allowed. This has been an issue for many people, as they rely on the charities for their receipts. Your local church may not be up on the laws and regulations unless they are lucky enough to have a CPA as their treasurer, or were informed of the rules in some other way. The amounts disallowed using these rules to disallow have been very large amounts in some cases.
It was also noted by conference attendees that they and their clients are experiencing delays of 6 to 12 months on amended tax returns filed before a response is received from the IRS. This, and wait times of a half hour to an hour when calling the IRS is the currently service level being received from the IRS.