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Monthly Archives: January 2012

Supreme Court Denies Review of Sixth Circuit's Decision that Property Held as Tenants By the Entirety is Subject to Forced Sale!

January 18, 2012

The U.S. Supreme Court denied review on Jan. 17 of the court of appeals ruling that a Michigan woman who did not owe unpaid taxes to the United States but owned a home with her tax delinquent husband as tenants by the entirety could not prevent the government from selling the property in a tax lien foreclosure (Barczyk v. United States, U.S., No. 11-710, cert. denied 1/17/12).

In U.S. v. Barczyk , No. 10-1498 (6th Cir. 8/17/11), the Sixth Circuit found that the federal government could force the sale of real property held as tenants by the entirety where only one spouse was delinquent and that the sale proceeds should be distributed equally between the federal government and the non-delinquent spouse. Accordingly, not only can joint creditors reach property held as tenants by the entirety, the federal government can also force a sale of property held as tenants by the entirety that is subject to a federal tax lien even if only one spouse is delinquent.

Advisors often recommend that married couples own their residence as tenants by the entirety because of the creditor protections afforded. However, in advising clients, it is important to note that joint creditors can always reach property held tenants by the entirety. Additionally, in light of the decisions in Barr and Barczyk, clients should also be advised that in the event that a tax lien is imposed on either spouse, the federal government can force a sale and that regardless of relative contributions to the purchase of the home or life expectancy, a non-delinquent spouse will receive only 50% of the proceeds of sale.
For more details on this matter go to: http://www.bna.com/us-barczyk-sixth-n12884903539/

Read more at: Tax Times blog

Florida Poised to Pass an Internet Sales Tax?

January 17, 2012

According to an estimate by the National Conference of State Legislatures, Florida is projected to lose more than $1.4 billion in revenue in 2012 due to the online sales tax loophole. Florida policymakers are considering an “e-tax” law.

If any of the pending online sales tax bills make their way through the redistricting-focused legislative session this year, Florida would join the growing group of states that collect sales taxes on all Internet retailers.

As the law currently stands, only companies with a physical presence (a store, or warehouse) in Florida must pay the state’s 6 percent sales tax.

Trade groups representing business interests have converged on the Capitol this year to push for bills that would pressure online retailers on taxes.

At least three different e-tax bills are in play in Tallahassee — although it will be tougher to pass many laws this year, due to a budget shortfall and the once-a-decade task of redrawing the state’s political districts. There are also small-government activists who claim the bills would create a de facto tax increase on consumers at a time of high unemployment and economic hardship.

Since 1993, the department has run a program where it randomly inspects records of large trucks shipping goods along Florida’s major interstate highways. The department will then a letter to a Florida Resident Purchaser asking them to pay on their out of state purchase. Current law requires consumers to self-enforce the sales tax on their online purchases, but hardly anyone does so.

In Florida, the push to collect taxes from Internet retailers started nearly 10 years ago, but several bills have died in the Legislature. But this may change in Florida, as states across the country seek to boost local businesses and increase tax revenue by going after online retail giants like Amazon and Overstock.com.

After New York passed an online sales tax law in 2008, at least eight other states have followed suit, including five in the past year. This month, Indiana’s government inked a deal with Amazon in which the retailer will begin collecting sales tax in 2014.

Gov. Rick Scott said he could sign an e-tax bill if it included an equal-sized tax cut. One idea is an additional or expanded sales tax holiday for shoppers.

For more on this go to: http://www.miamiherald.com/2012/01/16/2592761/tallahassee-battle-lines-drawn.html

Read more at: Tax Times blog

IRS Recently Revised Form 2848 – Power of Attorney

January 17, 2012

The IRS recently revised Form 2848, Power of Attorney and Declaration of Representative, and instructions. While the instructions to the revised form do not preclude using the prior version of the form, it is recommended that Tax professionals familiarize themselves with the revised form and begin using it.

Notable changes to Form 2848 include:


Part I -- Representatives/Notices and communications

 Line 2 of Form 2848 is to identify those individuals who are being authorized to represent the taxpayer. The information set forth on Line 2 includes the representative’s name, address, and other contact information. In addition to providing each representative’s Centralized Authorization File (CAF) number, the form now requests the preparer tax identification number (PTIN), where applicable.

In addition, Line 2 contains check boxes whereby two representatives  may receive copies of notices and other written communications. If the boxes are not checked, then the representatives will NOT receive copies of notices and other written communications the IRS sends to the  taxpayer.

Part I -- Acts authorized/Receipt of refund checks

Line 5 of the Form 2848 sets forth the authorized actions of a representative. The Form 2848 also contains certain actions that are not authorized to be undertaken by the representative unless specifically authorized by the taxpayer.


The actions that require specific authorization include substituting representatives, allowing the IRS to disclose tax return information to third parties, or signing certain returns. The revised Form 2848 contains boxes a taxpayer can check to indicate the taxpayer’s authorization for the representative to perform these actions.

Line 5 also makes clear that the representative is not authorized to receive or negotiate any amounts paid to the client in connection with representation, including refunds by either electronic means or paper checks.

Part I -- Identification/Signature of taxpayer 

Provides that if a joint return has been filed, each spouse must execute his or her own power of attorney

on a separate Form 2848 to designate a representative, even if the same representative is being appointed.

Part II -- Declaration of Representative  

 A new designation “(i)” has been added for “Registered Tax Return Preparer.” Additionally, the designations for student attorneys and student certified public accountants (CPA) have been combined into one designation “(k).”

The representative is also required to provide in addition to his or her licensing jurisdiction, the “License/Bar or Enrollment Number” where applicable.

The updated Form 2848 and corresponding instructions are posted on the IRS website.

Read more at: Tax Times blog

Groupons…anotheir State Sales Tax Headache

January 16, 2012

The Groupon and other online voucher sites have created some interesting tax consequences.

How much is the sales price and who should pay it?

Florida seems to have taken the position that the merchant is responsible for tax on the original price of the goods the purchaser of the voucher is entitled to receive.

As a secondary issue, there may be some escheat / unclaimed property issues you or your client may not be aware of or never even imagined.

For more information go to Florida Tax Law Blog

Read more at: Tax Times blog

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