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Washington Alert – IRS LITC application period is underway; Estimated federal budget deficit; IRS webinar May 19 titled “Understanding the Universal Availability Rules in a 403(b) Retirement Plan”

The application period for the 2017 Low Income Taxpayer Clinic (LITC) grant process is now underway and will run through June 20. (IR 2016-70) The LITC program awards matching grants of up to $100,000 per year to qualifying organizations for the development, expansion or maintenance of a LITC. As described by IRS, LITCs offer assistance to low-income taxpayers and those who speak English as a second language in several ways – by providing pro bono representation on their behalf in tax disputes with IRS; by educating them about their rights and responsibilities as taxpayers; and by identifying and advocating for issues that impact low-income taxpayers. The clinics provide their services at no cost or for a nominal fee.

The estimated federal budget deficit for the first seven months of fiscal year 2016 was $352 billion, according to the latest update from the Congressional Budget Office (CBO) that was released on May 6. (Monthly Budget Review for April 2016) Receipts were up by 1% and totaled $1.92 trillion. “But those receipts were roughly $50 billion, or 2.5%, smaller than CBO expected when it published its March 2016 report (Updated Budget Projections: 2016 to 2026),” the document said. According to CBO, the bulk of the shortfall reflects payments of individual income taxes, including final payments with tax returns and amounts from withholding. The estimated payments of corporate income taxes also have been smaller than expected, the budget review noted. “The sources of the shortfall in receipts for final payments of 2015 taxes will be better understood once data from tax returns start to become available later this year,” CBO said. “Smaller-than-expected receipts could continue in coming months, further reducing revenues for the fiscal year relative to CBO’s March projections,” it added. Corporate income taxes declined by $19 billion (or 11%), with the decline in those receipts reflecting taxable profits in both 2015 and 2016, CBO said. The budget review made special note of the provisions in the Consolidated Appropriations Act, 2016, which allow businesses with large amounts of investment to accelerate their deductions for those investments. “As a result of the enactment of that law, businesses now know that those tax rules will be in effect for all of 2016 and some of them are expected to reduce their estimated payments relative to those they made in 2015, when the rules had temporarily expired,” CBO said. The budget review is available at cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51534-MBR.pdf

IRS will conduct a webinar on May 19 titled “Understanding the Universal Availability Rules in a 403(b) Retirement Plan.” (FSLG Newsletter, May 3) According to the agency, the webinar will cover the following topics: basic universal availability rules; treatment of adjunct faculty at universities; treatment of part-time, seasonal, and temporary employees; the 20 hours per week and the 1,000 hours rules; controlled group situations and concerns; the Mayo ruling (i.e., Mayo Foundation for Medical Education and Research v. U.S. (S Ct 1/11/2011) 107 AFTR 2d 2011-341107 AFTR 2d 2011-341, see Weekly Alert ¶ 19 01/20/2011) on medical residents and its impact; the required annual notice to employees; and ways to find, fix, and avoid universal availability errors. To register for the webinar, go to https://www.webcaster4.com/Webcast/Page/925/14493

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney