Employers can electronically secure employee consents for FICA tax refunds

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In a Revenue Procedure, the IRS has provided guidance to employers on the requirements for employee consents used to support a claim for the refund of overpaid Federal Insurance Contributions Act (FICA) taxes. It allows employee consents to be requested, furnished and retained in an electronic format as an alternative to a paper format. It also contains guidance concerning what constitutes “reasonable efforts” if an employee consent isn’t secured. (Rev. Proc. 2017-28)

Offer In Compromise

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Under an IRS Offer in Compromise (OIC), a taxpayer can settle a tax debt for less than the amount owed if certain requirements are met. In one case, a man filed an OIC and the IRS rejected it because the taxpayer’s “collection potential” was higher. The IRS included an unpaid receivable as an asset because the taxpayer had control of the entity that owed him money. After his death, his estate fought the OIC rejection. The U.S. Tax Court upheld it, stating “it was based on a reasonable application of the IRS’ published guidelines.” (TC Memo, 2017-45)

Court: Form 1099 wasn’t fraudulently filed.

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In a complex dispute between two businessmen, one (the payor) wrote a check to the other for the amount he believed was owed. The payee didn’t cash it. The payor filed a Form 1099 with the IRS for the amount and sent a copy to the payee. A U.S. District Court held the 1099 filing was fraudulent because the check wasn’t cashed. But the 7th Circuit Court of Appeals reversed the decision, ruling that, because the payee never communicated a rejection of the check, the payor wasn’t willfully fraudulent. (3/16/17, 2017-542)

Trump Says Vote Must Happen Today

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Despite opposition, the Affordable Care Act (ACA) repeal and replacement moves ahead. Issues include: Conservative Republicans want a faster end to the ACA Medicaid expansion, which the bill has set for 2020, and want to add work requirements for able-bodied, childless Medicaid recipients. They also call age-based tax credits to help people buy insurance a new “entitlement.” However, Trump administration officials and House Republican leaders have said they hope to get the bill to the House floor this week so it can go to the Senate before the mid-April recess.