California Extends Filing and Payment Deadlines to July 15th

Posted on March 20, 2020 by Russ

California’s Franchise Tax Board announced late Wednesday that they have extended both the filing and payment deadlines until July 15th. This is for all individuals and business entities, and includes 2019 tax return, 2019 tax return payments, 2020 1st and 2nd quarter estimated payments, 2020 LLC taxes and fees, and 2020 non-wage withholding payments.

It would be nice if the IRS were to do the same thing. As of today, the federal filing deadline remains April 15th; however, federal payments due on April 15th are now due on July 15th. More on this in a second post shortly.

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IRS Issues Official Guidance Extending Payments (but NOT Tax Filing Deadline) Until July 15th

Posted on March 18, 2020 by Russ

The IRS issued Notice 2020-17 extending tax payments until July 15th for most individual and corporate taxpayers. The Department of the Treasury also issued a press release noting the deferment of payments.

Again, the tax filing deadline has not been extended from April 15th. It may be in the future–while I can still work, many areas of the country (such as the San Francisco Bay Area and the Puget Sound) are under virtual lockdown. It would make a lot more sense to simply extend the deadline…but that has NOT happened.

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Bozo Takes a Year Off

Posted on March 18, 2020 by Russ

Every year I’ve posted my Bozo Tax Tips. I will not be posting them for the 2020 Tax Season. There are too many serious issues going on, and I think it’s best to focus on the serious issues tax filers face.

You can still search for the past Bozo Tax Tips if you need some levity. And enjoy this picture (among other topics):

Rashia Wilson (Image Credit: Tampa Police Department)

For those wondering Ms. Wilson said the cops wouldn’t get her. She’s enjoying 20 years at ClubFed.

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Tax Deadline NOT Being Extended; Payment Deadline Extended for Most by 90 Days

Posted on March 17, 2020 by Russ

Secretary of the Treasury Mnuchin appeared at a press conference with President Trump. They stated that there will be a massive stimulus package. Additionally, Secretary Mnuchin stated that the tax deadline would not be extended because much filing can be done online:

We encourage Americans who can file taxes to continue to file taxes on April 15 because for many Americans, you will get tax refunds and we don’t want you to lose out on those tax refunds.

However, you can defer payment for 90 days in most circumstances:

If you owe a payment to the IRS, you can defer up to $1 million as an individual, and $10 million to corporations, interest-free and penalty-free for 90 days. File your taxes, you’ll automatically not get charged interests or penalties.

The problem with not extending the deadline is something we’re seeing in the San Francisco Bay Area: What if all non-essential businesses are ordered to close? (Tax preparation firms are not essential businesses.) I think there’s a good chance this will impact other areas of the country besides the Bay Area. We’ve already made plans for this. While we can do some work from home, the speed we can do things at is definitely reduced. Additionally, some of our staff simply can’t work from home because of security issues. If we’re ordered to close we will be forced to file extensions for many returns. Unfortunately, I strongly suspect this will happen throughout the United States.

In any case, there is some relief though I think it would have been far better to have simply extended the deadline to July 15th.

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Today *Is* the Partnership and S-Corp Filing Deadline

Posted on March 16, 2020 by Russ

During a news conference last week President Trump stated something to the effect that he was ordering Secretary of the Treasury Mnuchin to extend tax filing deadlines. That has not happened as of the moment I’m writing this.

Today is the deadline for filing S-Corporation and partnership returns (including LLCs that file as partnerships). If you have not filed your return you must file an extension today. Your tax professional can do this electronically. If you need to do it, download IRS Form 7004 (you can find the instructions here), complete it, and mail it using certified mail to the IRS. You now have a valid extension.

While the tax professional community expects the personal deadline to be extended, that has not happened yet. That means that personal returns are due on April 15th. It’s possible–indeed, highly probable–that deadline will be extended. But we all have to wait and see as to if or when that will occur.

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We’re Number One!

Posted on March 15, 2020 by Russ

I think we can all use a little levity right now, and in the email was a study from IPX1031 about where the biggest tax procrastinators are. Not surprisingly to me, it’s fabulous Las Vegas–my home.

A friend of mine is a tax professional in Orlando, and he tells me has few people who wait until September to file. Our rush in September – October is greater than the April tax deadline rush!

So where are the biggest procrastinators?

  1. Las Vegas
  2. Denver
  3. Seattle
  4. San Francisco
  5. Washington, DC
  6. Portland, OR
  7. Austin
  8. Baltimore
  9. Dallas
  10. Houston.

If we look at this based on states, Nevada is only number two:

  1. California
  2. Nevada
  3. Texas
  4. Colorado
  5. Oregon
  6. Washington
  7. Hawaii
  8. Georgia
  9. Arizona
  10. Maryland

Given that I expect an announcement in the coming days postponing the April 15th deadline (for those interested, as of today federal tax returns are still due on April 15th), I think statistics for the 2020 Tax Filing Season will be quite different.

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California’s Franchise Tax Board Extends Deadlines

Posted on March 14, 2020 by Russ

Yesterday, California’s Franchise Tax Board, the state’s income tax agency, extended the deadlines for taxpayers to both file and pay 2019 California income taxes (and 2020 California estimated taxes) by 60 days. Here is the announcement in full:

Sacramento — The Franchise Tax Board (FTB) today announced special tax relief for California taxpayers affected by the COVID-19 pandemic. Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments until June 15, 2020, in line with Governor Newsom’s March 12 Executive Order.

“During this public health emergency, every Californian should be free to focus on their health and wellbeing,” said State Controller Betty T. Yee, who serves as chair of FTB. “Having extra time to file their taxes helps allows people to do this, as the experts work to control the spread of coronavirus.”

This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through June 15, 2020, to June 15, 2020. This includes: 

·       Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15.

·       Individual filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15.

·       Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15.

The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period.

Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert FTB of the special extension period. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.

The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.  

I expect we will see a similar announcement from the IRS next week. It appears (at least for now) that the March 16th deadline for filing federal S-Corp and partnership returns will hold.

Kudos to the FTB for being proactive during this crisis.

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No Face to Face Appointments

Posted on March 12, 2020 by Russ

Taxes are a personal business, and providing service to our clients is what we’re about. That means face-to-face interactions. But I’m also an employer, and I must look at the health of my employees. Thus, beginning tomorrow we are no longer having any face-to-face meetings. We are happy to use Skype, phone, or any other interaction for any scheduled appointments. We encourage all clients to use our Web Portal (we will email any of you who need that information), fax, or mail.

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Will the April 15th Deadline be Extended?

Posted on March 11, 2020 by Russ

The Wall Street Journal has a story (pay link) this morning speculating that the Department of the Treasury will push back the April 15th deadline.  There are no specifics given in the story, but given that politicians on both sides of the aisle are talking about this, there’s a reasonable chance this will happen.

The reason, of course, is the current coronavirus (Covid-19) outbreak.  As the outbreak worsens (which, it appears, it will), there will be disruptions.  Consider tax professionals in Seattle, where a large number of individuals have fallen ill.  Do you want to meet with someone right now, especially given asymptomatic individuals can spread the disease?  And for those who are ill (or are treating family members, or who have to deal witch their children who are now home on an extended ‘break’) they have more important things to deal with.

It’s something I, as a business owner, have to deal with.  We wash our hands after seeing someone, but let’s face reality: we operate in close quarters.  If one of us gets this, it’s likely that all of us in the office would get this.  As for working at home, that’s near impossible for our office given the technology infrastructure we use.

I had initially thought we would see a larger number of extensions (and it’s something I think still could happen).  I now suspect we will see this extension–probably something similar to the automatic two-month extension given to individuals outside the United States on April 15th.  Whether it will include a waiving of interest is to be determined.

I’ll close with something that’s obvious.  This week long-time clients called me and said they had colds, and wished to postpone their appointment.  We fit them in in two weeks.  If you’re sick, use some common sense (be it a cold, the flu, or anything else): Don’t take actions that will infect others!  We have a rule in our office that if you have a fever, you go home, and you cannot come into work until 24 hours after the fever has broke.  If all of us use some common sense and good hygiene, we will likely whether this storm with minimal damage.

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Online Gambling and Offshore Cryptocurrency Exchange Mailing Addresses for 2020

Posted on February 27, 2020 by Russ

If you have one or more foreign financial accounts and you have $10,000 aggregate in those account(s) at any time during 2019, you must file the Report of Foreign Bank and Financial Accounts (the “FBAR”). This is Form 114 from FINCEN. (The IRS and FINCEN now allege that foreign online poker accounts are “casino” accounts that must be reported as foreign financial accounts. The rule of thumb, when in doubt report, applies—especially given the extreme penalties.) You also should consider filing an FBAR if you have $10,000 or more in a non-US Cryptocurrency Exchange.

There’s a problem, though. Most of these entities don’t broadcast their addresses. Some individuals sent email inquiries to one of these gambling sites and received politely worded responses (or not so politely worded) that said that it’s none of your business.

Well, not fully completing the Form 114 can subject you to a substantial penalty. I’ve been compiling a list of the addresses of the online gambling sites. It’s presented below.

FINCEN does not want dba’s; however, they’re required for Form 8938. One would think that two different agencies of the Department of the Treasury would speak the same language…but one would be wrong.

You will see the entries do include the dba’s. Let’s say you’re reporting an account on PokerStars. On the FBAR, you would enter the address as follows:

Rational Entertainment Enterprises Limited
Douglas Bay Complex, King Edward Rd
Onchan, IM31DZ Isle of Man

Here’s how you would enter it for Form 8938:

Rational Entertainment Enterprises Limited dba PokerStars
Douglas Bay Complex, King Edward Rd
Onchan, IM3 1DZ Isle of Man

You will also see that on the FBAR spaces in a postal code are removed; they’re entered on Form 8938. You can’t make this stuff up….

Finally, I no longer have an address for Bodog. If anyone has a current mailing address, please leave it in the comments or email me with it.

There remains debate over whether you need to file an FBAR for foreign cryptocurrency exchanges. At a presentation last year, an IRS employee stated that for the FBAR foreign cryptocurrency exchanges did not have to be reported. Unfortunately, the instructions for the FBAR do NOT state this. (See here, here, and here.) Thus, I strongly advise that foreign cryptocurrency exchanges continue to be reported on the FBAR. There is no penalty for overreporting; there are severe penalties for underreporting.

There is no dispute, though, about reporting foreign cryptocurrency exchanges on Form 8938: They must be reported on Form 8938 (if you have a Form 8938 filing requirement).

Note: This list is presented for informational purposes only. It is believed accurate as of February 27, 2020. However, I do not take responsibility for your use of this list or for the accuracy of any of the addresses presented on the list.

The list is in the cut text below.

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