On December 28, the IRS released its Exempt Organization Newsletter, Issue Number 2012-20. Topics include the following
- IRS and Treasury issue final regulations on the fee on certain issuers and plan sponsors
- Proposed regulations issued on Net Investment Income Tax
- Proposed regulations issued on Additional Medicare Tax
- Tax preparers must renew their PTINs and those required to take the RTRP test should schedule it as soon as possible
- IRS offers tips for year-end giving
- Online tool to search charities and other nonprofits
- Regulations for Type III supporting organizations
- Happy New Year!
1. IRS and Treasury issue final regulations on the fee on certain issuers and plan sponsors
The IRS and Department of Treasury have issued final regulations on the fee imposed by the Patient Protection and Affordable Care Act on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to fund the Patient-Centered Outcomes Research Trust Fund.
The final regulations provide guidance on the policies and plans that are subject to the fee.
The final regulations also provide guidance on the requirements for calculating, reporting, and paying the fee.
Issuers and plan sponsors must file Form 720, Quarterly Federal Excise Tax Return, once a year on July 31 of the calendar year following the last day of the policy year or plan year to report and pay the fee.
The fee applies for policy and plan years ending on or after October 1, 2012, and before October 1, 2019.
2. Proposed regulations issued on Net Investment Income Tax
A new Net Investment Income Tax goes into effect starting in 2013. The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts.
The IRS and the Treasury Department have issued proposed regulations on the Net Investment Income Tax. Comments may be submitted electronically, by mail or hand delivered to the IRS.
For additional information on the Net Investment Income Tax, see questions and answers. Question 6 specifies the types of trusts – including charitable trusts – that are not subject to the tax.
3. Proposed regulations issued on Additional Medicare Tax
A new Additional Medicare Tax goes into effect starting in 2013. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income that exceeds a threshold amount based on the individual’s filing status.
The threshold amounts are:
- $250,000 for married taxpayers who file jointly
- $125,000 for married taxpayers who file separately
- $200,000 for all other taxpayers
An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.
The IRS and the Treasury Department have issued proposed regulations on the Additional Medicare Tax. Comments may be submitted electronically, by mail or hand delivered to the IRS.
For additional information on the Additional Medicare Tax, see our questions and answers.
4. Tax preparers must renew their PTINs and those required to take the RTRP test should schedule it as soon as possible
The Internal Revenue Service reminds professional tax return preparers to renew their Preparer Tax Identification Numbers (PTINs) if they plan to prepare returns in 2013. Current PTINs expire Dec. 31, 2012. Read the IRS news release.
Anyone who prepares or helps prepare all or substantially all of a federal tax return, claim for refund or other federal forms for compensation must have a valid PTIN. All enrolled agents also must have a PTIN. Tax professionals can obtain or renew their PTINs at www.irs.gov/ptin.
For more information, go to the EO PTIN page.
End of year PTIN system downtime
The PTIN system will be down on the following dates and times due to end of year maintenance, according to the IRS Return Preparer Office:
- Sunday, December 30, from 1 a.m. to 7 a.m. (partial outage). The system will be unable to process new registrations, but will be open for renewals and test appointments.
- Monday, December 31, through mid-day on Wednesday, January 2 (complete outage). The system will be unable to process any new registrations or renewals or test appointments.
5. IRS offers tips for year-end giving
Individuals and businesses making contributions to charity should keep in mind some key tax provisions that have taken effect in recent years, especially those affecting donations of clothing, household items and monetary donations.
Read the IRS news release.
Also read “Season of Giving” tax tips covering everything from charity donations to refund planning.
6. Online tool to search charities and other nonprofits
Learn how to search for charities and other nonprofits using the IRS online tool called Select Check in this new YouTube video.
Watch this and other videos on the IRS YouTube Channel.
7. Regulations for Type III supporting organizations
The IRS has issued final regulations, and temporary regulations, regarding the requirements to qualify as a Type III supporting organization. The IRS also issued a Notice of Proposed Rulemaking cross-referencing the new temporary regulations. Written or electronic comments and requests for a public hearing must be received by March 28, 2013.
8. Happy New Year!
EO wishes everyone a happy, safe and productive 2013.