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NO Roundtable Group
Agenda

Thursday, August 20, 2009

SLCPA Conference Room 830AM-10AM

1. Louisiana Amnesty Program. http://www.revenue.louisiana.gov/sections/publications/LouisianaTaxAmnestyProgramFAQ.aspx
2. Topics for future meetings.

Unanswered questions below. We do not know if there will be answers from LDR before amnesty program starts on September 1st.

Will there be any acknowledgement?
How to figure interest? The rate has changed for the tax years included in the plan. How does LDR charge interest? A full month at a time, daily, etc.? Will interest be due until September 1st or date of filing?
What about those who have received notices now? If they do not pay by September 1st, can they file application?
If you use a vendor, will the work be done in Louisiana or the state where the vendor is located?
What to do with current notices for returns that could qualify for amnesty?

1. Advise clients to wait until 9/1/09 & apply for amnesty? Hopefully a levy is not issued in the meantime.
2. If possible, should we request a hold on the account?
3. How do we keep a levy from happening? Make a partial payment?
4. Does amnesty apply to just unpaid penalty & interest? Taxpayer paid tax only and not any penalties and interest on a return that has been filed..
5. Do you think LDR is suspending collection activity until 9/1/09?

Comments below from Paul Waldman:

Will there be any acknowledgement?
In addition to whatever acknowledgment LDR provides, the release of liens and LDR’s statement of account for each year should also signify zero balances upon payment.

How to figure interest?
LDR will do that for you. “Tax Interest” software also will do the calculation.

The rate has changed for the tax years included in the plan. How does LDR charge interest? A full month at a time, daily, etc.? What about those who have received notices now? If they do not pay by September 1st, can they file application?
If the tax period meets one of the following requirements:

What taxes and tax periods are included?

• All taxes administered and collected by the Louisiana Department of Revenue (LDR), except for motor fuel taxes;
• Taxes that became due on or after July 1, 2001 and before January 1, 2009 (since the last amnesty program);
• Taxes due before January 1, 2009 for which LDR has issued an individual or a business a billing notice or demand for payment on or after July 1, 2001 and before May 31, 2009;
• Taxes for which the taxpayer and LDR entered into an agreement to suspend the running of prescription until December 31, 2009;
• Taxes due on or before July 1, 2001, but that were ineligible for an earlier amnesty program because the matter was in civil litigation.

If you use a vendor, will the work be done in Louisiana or the state where the vendor is located?
What do you mean by “work?”

What to do with current notices for returns that could qualify for amnesty?
1) Advise clients to wait until 9/1/09 & apply for amnesty?
Yes if the period qualifies for amnesty and if enforced collection will be withheld.

Hopefully a levy is not issued in the meantime.
Inform LDR of the taxpayer intention and request no enforced collection action until after the expiration of the amnesty period; see if they will forbear from enforced collection action.

2) If possible, should we request a hold on the account?
Yes, per above.

3) How do we keep a levy from happening?
See above.

Make a partial payment?
The LDR statements of account I have received indicate that LDR applies payments to tax first; therefore, there would be no downside to making partial payment if necessary to get to the amnesty period, provided the payments are designated to periods for which tax is due, not just interest and penalties. I think that application of payments to tax first should be confirmed with LDR.

4) Does amnesty apply to just unpaid penalty & interest?
Yes. See FAQ below.

What are the benefits of participating in tax amnesty?

LDR will forgive civil penalties and one-half of the balance of the accrued interest charges for all participants granted Tax Amnesty.

Taxpayer paid tax only and not any penalties and interest on a return that has been filed.
5) Do you think LDR is suspending collection activity until 9/1/09?
See above.

Louisiana Tax Amnesty Program

Frequently Asked Questions

• What is Tax Amnesty?
• What taxes and tax periods are included?
• What are the benefits of participating in tax amnesty?
• Who qualifies for tax amnesty?
• Who does not qualify for tax amnesty?
• What is required to obtain tax amnesty?
• Louisiana Tax Delinquency Act of 2009

What is Tax Amnesty?

• A two-month period for resident and non-resident individuals, and in-state and multi-state businesses to pay their Louisiana state tax debts in exchange for the state waiving penalties and a portion of the interest;
• A voluntary program; each eligible taxpayer must determine if participation is in their best interest.

Tax Amnesty is not  an “issue resolution program,” so it may not always be the best option for taxpayers in litigation. And if not, alternative dispute resolution programs such as mediation, arbitration, and settlement may be utilized to resolve the tax dispute.

What taxes and tax periods are included?

• All taxes administered and collected by the Louisiana Department of Revenue (LDR), except for motor fuel taxes;
• Taxes that became due on or after July 1, 2001 and before January 1, 2009 (since the last amnesty program);
• Taxes due before January 1, 2009 for which LDR has issued an individual or a business a billing notice or demand for payment on or after July 1, 2001 and before May 31, 2009;
• Taxes for which the taxpayer and LDR entered into an agreement to suspend the running of prescription until December 31, 2009;
• Taxes due on or before July 1, 2001, but that were ineligible for an earlier amnesty program because the matter was in civil litigation.

What are the benefits of participating in tax amnesty?

LDR will forgive civil penalties and one-half of the balance of the accrued interest charges for all participants granted Tax Amnesty.

Who qualifies for tax amnesty?

• Those who failed to file a tax return or report;
• Taxpayers who failed to report all income or pay all tax, interest and penalties that were due;
• Taxpayers who claimed incorrect credits or deductions;
• Taxpayers who misrepresented or omitted any tax due; or
• Certain taxpayers under audit or in litigation.

Who or what does not qualify for tax amnesty?

• Taxpayers involved in a criminal investigation or criminal litigation for taxes administered by LDR.

What is required to obtain tax amnesty?

• Filing of an amnesty application and applicable returns or reports;
• During the Tax Amnesty period, payment of the tax and any collection fees assessed, billed, noticed, or demanded by LDR;
• During the Tax Amnesty period, payment of 50% of the accrued interest charges;
• By accepting amnesty, the participant agrees to waive appeal rights for the specific tax and periods upon which amnesty is granted;
• For eligible audits and litigation, participants agree to abide by LDR’s interpretation of the law at the time returns for all issues involved in the audit or litigation that are resolved through amnesty for taxable periods beginning in 2010, 2011, and 2012;
• For cases in litigation, participant agrees to pay attorney fees if outside counsel represents LDR.

Louisiana Tax Delinquency Act of 2009

Click here to read Act 519 of the Regular Session of the 2009 Louisiana Legislature.

* * * * *

Tax Alert for September 4, 2008

Hurricane Gustav Victims Qualify for IRS Disaster Relief

The Internal Revenue Service is providing tax relief to victims of Hurricane Gustav in affected areas of Louisiana.

The IRS is postponing until Jan. 5, 2009 deadlines for taxpayers who reside or have a business in the disaster area. The postponement applies to return filing, tax payment and other time-sensitive acts otherwise due between Sept. 1, 2008 and Jan. 5, 2009. This includes:

• Individual estimated tax payments due Sept. 15, 2008.
• Corporate extended 1120 tax returns due Sept. 15, 2008.
• Individual extended 1040 tax returns due Oct. 15, 2008.

In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 as long as the deposits are made by Sept. 16, 2008.

Other provisions are listed in the Grant of Relief section below.

Taxpayers who reside in or have a business located in the following parishes qualify for the relief announced today: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Rapides, Sabine, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, Terrebonne, Vermilion, Vernon, West Baton Rouge and West Feliciana.

IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request tax relief.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing or payment due date between Sept. 1, 2008 and Jan. 5, 2009.

Covered Disaster Area

The Louisiana parishes listed above constitute a covered disaster area for purposes of Treas. Reg. Section 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. Section 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose books, records, or tax professionals offices are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area are eligible for relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Jan. 5, 2009 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns) or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 1, 2008 and on or before Jan. 5, 2009.

The IRS also gives affected taxpayers until Jan. 5, 2009 to perform other time-sensitive actions described in Treas. Reg. Section 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007) that are due to be performed on or after Sept. 1, 2008 and on or before Jan. 5, 2009. This relief also includes the filing of Form 5500 series returns in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098 or 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 provided the taxpayer made these deposits by Sept. 16, 2008.

Casualty Losses

Affected taxpayers in a presidentially declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this years return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements but they must first subtract $100 for each casualty event and then subtract 10 percent of their adjusted gross income from their total casualty losses for the year. For details on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts.

Affected taxpayers claiming the disaster loss on last years return should put the Disaster Designation Louisiana/Hurricane Gustav at the top of the form so that the IRS can expedite the processing of the refund.

Free Return Copies and Transcripts

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS Web site, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

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