IRS E-Filings for Individuals and Businesses Break Record in 2008 (IR-2008-128)

The IRS has announced that the 2008 filing season broke all records, with nearly 90 million electronically filed individual tax returns and more than 329 million visits to the IRS website, www.irs.gov. Businesses also broke e-file records by filing almost 2 million corporate and partnership income tax returns, an increase of more than 50 percent over the prior year. According to IRS Commissioner Doug Shulman, "more people with home computers and businesses embraced electronic filing this year." He noted that "every year, more people realize that electronic filing is the safe, accurate way for taxpayers to complete their taxes and get faster refunds."

The IRS received nearly 4.8 million Free File returns, a 24 percent jump over last year's total of almost 3.9 million. During 2008, taxpayers with an adjusted gross income of $54,000 or less, or about 70 percent of individual taxpayers, had the option of choosing to e-file for free through IRS Free File, a partnership between the IRS and some software manufacturers.

The latest IRS statistics, taken through October 31, show that the near 90 million e-filed returns represent a 12.4 percent increase over the same period last year. Of the 155 million tax returns filed, about 58 percent were filed electronically. In addition, while the total number of returns increased by 23 percent during the past decade, the number filed electronically increased by 206 percent. Filings from home computers accounted for 30 percent of all returns e-filed by individuals.

Additional statistics indicate that more taxpayers chose to receive their refunds through direct deposit during 2008. The IRS made 66 million direct deposit payments in 2008, an increase of 8 percent from 61 million in 2007. Overall, the IRS issued 107 million tax refund payments in 2008, an increase of almost 2 percent from 105 million refund payments for the same time in 2007. As of October 31, the average 2008 refund was $2,400, a jump of 4 percent from $2,309 at the same time in 2007.

2008FED ¶46,646

Other References:

Code Sec. 6011

CCH Reference - 2008FED ¶35,141.47

Tax Research Consultant

CCH Reference - TRC FILEBUS: 12,306

IRS Issues Procedure for Multiemployer Plans to Obtain Amortization Period Extension (Rev. Proc. 2008-67)

The IRS has issued guidance under which the sponsor of a multiemployer pension plan may request and obtain approval of an extension of an amortization period in accordance with Code Sec. 431(d). The new procedure is effective for all ruling requests received with respect to plan years starting after December 31, 2007. Rev. Proc. 2008-4, I.R.B. 2008-1, 90, is modified, and Rev. Proc. 2004-44, 2004-2 CB 134, is superseded effective for applications submitted with respect to plan years starting after December 31, 2007.

Under plan funding changes implemented by the Pension Protection Act of 2009 (P.L. 109-280), a sponsor of a multiemployer plan can apply for an automatic extension of up to five years of the plan's funding liability amortization period, or an alternative extension of up to 10 years, minus the period obtained under an automatic extension.

The procedure provides a model notice the plan must send to each union, participating employer, participant, beneficiary and alternative payee, notifying them that the plan has filed an application for an amortization extension. Information required in the application for an alternative extension is substantial, and the procedure provides a checklist to ensure that submissions are complete.

All extension requests must be submitted by the last day of the first plan year for which the extension is intended to take effect. The IRS will consider applications for extensions submitted after this date only upon a showing of good cause. If a significant number of employers or any of the principal employers file a bankruptcy petition after the request for an extension of an amortization period is submitted to the IRS, the applicant must provide updated financial information.

Rev. Proc. 2008-67, 2008FED ¶46,647

Other References:

Code Sec. 381

CCH Reference - 2008FED ¶17,031.223

Code Sec. 401

CCH Reference - 2008FED ¶17,507.042

CCH Reference - 2008FED ¶17,507.2531

Code Sec. 412

CCH Reference - 2008FED ¶19,125.296

CCH Reference - 2008FED ¶19,125.905

Code Sec. 414

CCH Reference - 2008FED ¶19,156D.40

Code Sec. 431

CCH Reference - 2008FED ¶20,181.0273

Code Sec. 509

CCH Reference - 2008FED ¶22,812.50

Code Sec. 529

CCH Reference - 2008FED ¶22,945.30

Code Sec. 4942

CCH Reference - 2008FED ¶34,047.70

Code Sec. 4966

CCH Reference - 2008FED ¶34,317C.30

Code Sec. 4967

CCH Reference - 2008FED ¶34,319C.30

Code Sec. 6033

CCH Reference - 2008FED ¶35,425.116

26 CFR 601.201

CCH Reference - 2008FED ¶43,360.103

CCH Reference - 2008FED ¶43,360.175

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CCH Reference - TRC RETIRE: 57,204

State Headlines

Missouri --Insurance Tax: Stop-Loss Insurance Policy Premiums Taxable

Stop-loss insurance policy premiums received by an insurer were subject to the Missouri direct premium tax, according to the Missouri Supreme Court. The insurer argued that the stop-loss policies were reinsurance and were not subject to the direct premium tax. However, Missouri law neither imposes a tax upon insurance nor exempts reinsurance from tax, but taxes direct premiums received. Here, the employers who purchased the stop-loss policies did not collect any specific amounts from employees for the health benefits provided, and no tax was imposed on those benefits under Missouri law. The employers were the insureds, and the premiums paid by those employers were the first premiums paid. Thus, those premiums were subject to the direct premium tax. Furthermore, the tax did not violate the Equal Protection Clauses of the federal and state constitutions. According to the court, the Missouri law is valid because all insurance companies are taxed on the direct premiums received.

Subscribers to CCH Tax Research NetWork can view the text of the decision.

American National Life Insurance Co. of Texas v. Director of Revenue and Director of Insurance, Missouri Supreme Court, November 4, 2008

New York --Sales and Use Tax: Bad Debt Refund Denied for Sales Financed by Third Parties

It was proper for the New York Division of Taxation to deny a corporation's claim for a refund of sales and use taxes paid on certain transactions that were financed by third parties and later became uncollectible. The Division based its denial on a regulation clearly prohibiting sales tax refunds for transactions financed by third parties, and the corporation's claim that the regulation conflicted with the governing statute was rejected.

In addition, even though the law was subsequently amended in 2006 to provide for a sales tax bad debt credit or refund with respect to certain sales financed by third parties, that amendment was irrelevant because it was not retroactive. The corporation's contention that the refund denial was contrary to the spirit of the law and worthy of equitable relief was without merit. The corporation's equal protection and due process arguments were also rejected. The administrative law judge fully and properly addressed the issues raised by the taxpayer. The taxpayer offered no evidence below, and no argument on exception, that provided a basis for modifying the administrative law judge's determination in any respect.

Subscribers to CCH Tax Research NetWork can view the decision.

Home Depot U.S.A., Inc., New York Division of Tax Appeals, Tax Appeals Tribunal, DTA No. 821034, November 6, 2008