Tax Alerts

CA – California issues gillette opinion: taxpayers not entitled to use equally-weighted apportionment formula

The California Supreme Court has reversed an earlier appellate court decision and held that multistate corporate taxpayers may no longer elect to use the Multistate Tax Compact’s equally-weighted three-factor formula to apportion net income for California corporation franchise and income tax purposes. Instead, taxpayers must use the apportionment formula required under California law (i.e., a…

IRS affirms guidance on expensing and capitalization rules for computer costs

IRS Chief Counsel has affirmed the application of the guidance in a 2002 letter ruling (LTR 200236028) regarding the treatment of computer-related costs, both software and hardware (CCA 201549024). Although the LTR may not be used or cited as precedent, taxpayers in effect may rely on the 2002 ruling and on guidance published in Rev.…

IRS provides guidance to retirement plans following approval of same-sex marriage

The IRS has issued guidance (Notice 2015-86) for retirement plans and health and welfare plans following the Supreme Court’s approval of same-sex marriage nationwide in Obergefell, 2015-1 ustc ¶50,357. Obergefellrequires that a state must license a marriage between two people of the same sex and must recognize same sex marriages performed out of state. Because…

IRS tries new approach to help employers keep up with payroll taxes

The IRS has launched a new approach to help employers who fall behind in reporting and paying payroll taxes to the government (IR-2015-136). In the past, the IRS waited to contact employers until an employment tax return was filed. Under the new initiative, the IRS will monitor deposit patterns and identify employers who reduce their…

IRS advises employers of reporting deadlines under Affordable Care Act

The IRS is reminding applicable large employees (ALE) of upcoming information reporting deadlines under the Affordable Care Act (ACA) for the 2015 plan year (Heath Care Tax Tip 2015-80). Reporting for 2014 was voluntary; reporting for 2015 is mandatory. Mandatory reporting Every provider of “minimum essential (health insurance) coverage” (MEC) must report coverage information by…

2016 Filing Season opens January 19

The IRS will start accepting 2015 individual income tax returns on January 19, 2016 (IR-2015-139). The starting date is the same for both paper and electronically-filed returns. Paper returns filed before January 19 will not be processed until January 19. The filing deadline for 2015 returns is Monday April 18, 2016, rather than the traditional…