IRS Voluntary Classification Settlement
The Internal Revenue Service has announced a new Internal Revenue Service Voluntary Classification Settlement program that provides partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat workers as employees. The Voluntary Classification Settlement Program (VCSP) allows eligible taxpayers to voluntarily reclassify their workers for federal…
Estate Planning in 2010
As 2009 drew to a close, most trust and estate practitioners believed that Congress would freeze the estate tax threshold at the 2009 exemption and rate structure of $3.5 million for estate planning in 2010. This “fix” never happened! As a consequence, for individuals who pass away in 2010 there…
President Homebuyer Credit Extension
The Homebuyer Assistance and Improvement Act of 2010 (H.R. 5623) was signed on July 2, 2010, by President Obama. The bill permits first-time homebuyers to qualify for the $8,000 credit. It also allows who have lived for five years in their current residence to purchase a new home and receive a…
NJ Announces Private Ruling Procedures
Beginning September 15, 2010, the New Jersey Division of Taxation will initiate a private letter ruling procedure. The new procedure will allow taxpayers to obtain a written determination from the Regulatory Services Branch of the Division. The private rulings will be based on the law and Division policies in effect…
President Signs Small Business Tax Bill
President Obama signed H.R. 5297, the Small Business Lending Fund Act of 2010 (click link to download). The bill includes eight new small business tax cuts – all effective immediately, and applying to small businesses’ taxes for 2010 – providing an immediate incentive for businesses to make new investments and expand. Here…
New Rules Proposed for NJ Death Tax Escrows
The New Jersey Division of Taxation has proposed new rules for title insurance companies holding escrow amounts from real estate closings for the payment of transfer inheritance and/or estate taxes. New N.J.A.C.18:26-11.21 would require title companies to notify the Division in writing, within 10 days of receipt of the transfer…
Estate Planning and Circular 230
“Circular 230” is the body of federal government regulations which regulate individuals that “practice before” the Internal Revenue Service on tax matters. By now, many professionals have either adopted firm procedures for dealing with “Circular 230” or have begun to notice Circular 230 “disclaimers” plastered over letters, memos and even…
Many More Taxpayers Will Create Trusts Because of IRS Ruling
In Revenue Ruling 2004-64, the IRS settled a long-standing question about the gift and estate taxation of grantor trusts. As a result of this favorable ruling, many more advisers will recommend that clients place income-producing assets into irrevocable trusts in order to achieve estate tax benefits. A grantor trust is a trust…
What Every Pennsylvania Estate Planner Needs to Know about the New Jersey Estate Tax
In 2002, the Commonwealth of Pennsylvania, like the State of New Jersey, “decoupled” the state estate tax from the federal state death tax credit amount allowed by 2011 of the Internal Revenue Code. This may be where the similarity between the two states ends. After the Economic Growth Tax Relief…
Treatment of Madoff Losses Under GIT Explained
The New Jersey Division of Taxation has revised a previously reported notice clarifying how taxpayers should report losses from the Bernard Madoff Ponzi scheme for purposes of the gross (personal) income tax. In a recent ruling, the IRS stated that the investment losses resulting from the Madoff Ponzi scheme should be written…