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Federal Headlines
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The IRS has provided procedures for taxpayers on how to make the election to no longer maintain a surety bond or Treasury Direct Account (TDA) to avoid recapture of the low-income housing credit. The guidance is aimed at taxpayers who are maintaining a surety bond or TDA to satisfy the low-income housing tax credit recapture exception in Code Sec. 42(j)(6), as in effect on or before July 30, 2008. The procedures apply to all taxpayers that disposed of a qualified low-income building on or before July 30, 2008, for which the IRS has approved a Form 8693, Low-Income Housing Credit Disposition Bond. The election is allowed by section 3004(i)(2)(B)(ii) of the Housing Tax Act of 2008 (P.L. 110-289).
A taxpayer who seeks to make the election must submit a letter to the IRS containing the following information: (1) the taxpayer's name, address, and taxpayer identification number; (2) a statement affirming that the taxpayer reasonably expects that the building will continue to be operated as a qualified low-income building for the remainder of the building's compliance period; and (3) an "under penalties of perjury" declaration. The taxpayer must attach the signature page of an IRS-approved Form 8693 to the letter and mail to: Internal Revenue Service, Box 331, Attn: LIHC Unit, DP 607 South, Philadelphia Campus, Bensalem, Pa. 19020.
Rev. Proc. 2008-60, 2008FED ¶46,600
Other References:
Code Sec. 42
CCH Reference - 2008FED ¶4385.72
Tax Research Consultant
CCH Reference - TRC BUSEXP: 54,222
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State Headlines
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Legislation subjects specified individuals to electronic California personal income tax payment requirements, accelerates the changes made to the nonresident group return requirements made earlier in the legislative session, expands the Franchise Tax Board's (FTB) collection authority, and increases various alcohol-related license fees.
Electronic Payments
Applicable to all installments due after 2008, California personal income taxpayers are required to make their tax payments electronically, including utilizing a pay by phone option, if their estimated personal income tax installment payment or extension request payment exceeds $20,000 or if their total annual post-2008 tax liability exceeds $80,000. Taxpayers may make a written election to not make their payments electronically if they did not meet the $20,000 or $80,000 threshold requirements for the preceding taxable year. A penalty of 1% of the tax owed will be imposed against taxpayers who fail to make an electronic payment unless reasonable cause exists. In addition, the FTB may waive the electronic payment requirement if it determines that the particular amounts paid in excess of the threshold amounts were not representative of the taxpayer's tax liability.
Nonresident Group Returns
With the exception of the effective dates, this legislation also makes changes to the group nonresident return requirements that are identical to those amendments made by Ch. 305 (A.B. 3078) (see
TAXDAY, 2008/09/29, S.3), thereby allowing group nonresident returns to be filed on behalf of a single nonresident shareholder or partner, and allowing nonresident shareholders and partners with taxable incomes in excess of $1 million to be included in the nonresident group return. However, as a result of the urgency clause contained in this legislation these changes will go into effect earlier and are applicable beginning with the 2008 taxable year.
Other Changes
Finally, additional amendments made by this bill (1) reinstate the FTB's authority to collect delinquent assessments and penalties that are levied against employers for violation of specified labor and occupational safety and health laws and (2) effective January 1, 2009, increase various license fees imposed under the Alcohol Beverage Control Act.
Ch. 751 (A.B. 1389), Laws 2008, effective September 30, 2008, and applicable as noted above.
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