JOBS TAX ACT APPROVED: The Committee on Ways and Means approved H.R. 2896, the American Jobs Creation Act of 2003, by a vote of 24-15.
The act includes tax relief and investment incentives for U.S. employers of all sizes. Specifically, the act:
● Reduces the tax rate for U.S. producers and manufacturers from 35 to 32 percent;
● Includes an across-the-board rate cut for all C corporations with less than $20 million in taxable income;
● Expands the size of companies that are exempt from the corporate alternative minimum tax from $7.5 million of gross receipts all the way up to $20 million; and,
● Repeals the Foreign Sales Corporation-Extraterritorial Income (FSC-ETI) tax regime to head off $4 billion in tariffs against U.S. goods.
“The act aids U.S. manufacturers and businesses by providing tax relief and improving outdated areas of the Tax Code. ... This bill will make the U.S. more competitive in the 21st cent-ury,” said Bill Thomas, R-Calif., chairman of the Committee on Ways and Means and sponsor of the bill.
IRS GRANTS TAX RELIEF FOR CALIFORNIA WILDFIRE VICTIMS: The Internal Revenue Service has announced special tax relief for Southern California residents in the Presidential Disaster Area that was struck by wildfires beginning Oct. 21, 2003. The disaster area counties are: Los Angeles, San Bernardino, San Diego and Ventura.
● The FTD penalty waiver period for employment and excise tax deposits is Oct. 21 to Nov. 7, 2003.
● The extension period for returns and other tax payments is Oct. 21 through Dec. 29, 2003.
● The “disaster designation” for this area is “CA Wildfires.”
For the purposes of this tax relief, affected taxpayers include individuals and businesses located in the disaster area, those whose tax records are located in the disaster area, and relief workers. The same relief will also apply to any places added to the disaster area.
This extension to file and pay does not apply to information returns, or to employment and excise tax deposits. However, the IRS may abate penalties for affected taxpayers due to reasonable cause during the FTD penalty waiver period, provided they make the payment by the last day of that period.
To qualify for this relief, affected taxpayers should put the assigned disaster designation in red ink at the top of the return, except for Form 5500, where filers should check Box D in Part 1 and attach a statement, following the form’s instructions. Individuals or businesses located in the disaster area — or taxpayers outside the area who were directly affected by this disaster — should contact the IRS if they receive penalties for filing returns or paying taxes late.
Affected taxpayers claiming the disaster loss on last year’s return should put the disaster designation in red ink at the top of the form so that the IRS can expedite the processing of the refund. The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers who need them to apply for benefits or to file amended returns claiming casualty losses.
EA ROLLING RENEWAL SCHEDULE DELAYED: The Internal Revenue Service has delayed implementing the new rolling renewal schedule for enrolled agents.
Under Circular 230, as amended July 26, 2002, approximately one-third of all enrolled agents will renew their enrollment each year. Except for those who received their initial enrollment after Nov. 1, 2003, enrolled agents who have a Social Security number or tax identification number that ends with the numbers 0, 1, 2 or 3 were scheduled to apply for enrollment between Nov. 1, 2003, and Jan. 31, 2004.
To ensure an orderly transition, the schedule has been delayed until the 2004 calendar year. The IRS will publish the schedule for affected EAs in the Internal Revenue Bulletin and at www.irs.gov/taxpros/agents/index.html at least 30 days prior to the beginning of the period for renewal of enrollment, and no later than June 1, 2004. The renewal period will last at least 60 days, but no more than 90 days.
The delay will not affect an agent’s current status as an EA in good standing, and will not affect the number of hours of continuing professional education required for renewal or the time period within which these hours must be completed.
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