Dear Clients and Friends,
Season’s Greetings from all of us at Beverly and Bucker! We hope that the holidays find you in good health and high spirits. As we prepare for the upcoming tax season, we have some news for our clients and a few announcements.
We’re excited to welcome back Marcel Kay and Christy Gray this tax season! Marcel, a Fredericksburg native, has been with us for three years and has continued his work in the local community between tax seasons. This will be Christy’s second year with us and we are happy to announce that she has passed the Individual Tax portion of the Enrolled Agent Exam. These exams are tough and require a great knowledge of tax preparation. We’re very proud of Christy and glad to have her on the team. As always, we look forward to implementing our knowledge to provide our clients with the best service this tax season.
Last year was a doozy! We had several clients who were surprised by their results, mostly due to under-withholding. It appears that many payroll departments were using inaccurate tax tables and not taking out enough. We’ve checked in with several clients and it seems like the tax tables are more accurate this year, but it’s always good to make sure that you have enough federal and state tax withheld. IRS has provided a “paycheck checkup” on their website. Please visit if you would like to see if you are underwithheld in 2019. If you have concerns, please contact me and we can discuss if an estimated payment is necessary. If you need to make an estimated payment for 2019 it will be due January 15th, 2020.
● Businesses: Note that Partnership and S-Corp business returns are due March 15th If you are a Corporation, S-Corp, Partnership, or Self Employed business owner, we request that you to drop off your information by January 31st, 2020. In many cases, our accounting department will need to complete Year-End Statements for your company that are then used to prepare your tax return. If we do not receive the necessary info to prepare your Year-End Financial Statements by Jan. 31, 2020, we may have to file an extension for your business return. This does not mean that you will incur penalty, be considered late, or be forced to file an extension for your personal returns. We intend to file all returns by or before April 15th. If you know that you would like an extension, feel free to call in now so that we can add you to our list. If you do not want an extension, it is imperative that we receive your information well in advance of the March 15th deadline.
● Investments: If you have investments and receive the brokerage statement in midMarch, we recommend that you drop off your tax papers or make your appointment before receiving these forms. This allows us to prepare the majority of your return in advance. We will be able to apply the brokerage statements as soon as they arrive and complete your return. If you wait to drop off all of your forms before receiving this statement, your taxes may need to be filed for extension.
● Appointments: Please schedule your appointment soon as spaces fill up quickly. If you are unable to find an appointment with your preferred tax preparer, please know that we are all here to provide quality service and prepare accurate tax returns to get you the best results.
● Drop off service: For your convenience, we also offer a drop-off option which saves many clients from having to take time away from work. We are happy to correspond via phone or email while preparing dropped off returns if there are any questions or concerns. Documents can be dropped off at our front desk during office hours or in the drop-off slot to the left of our front door after hours. Please include a phone number with any information you drop off.
● Client Organizer: Client organizers serve as a type of checklist for your tax information. If we’ve prepared your returns in the past, your organizer will show items that you have provided in prior years. Please contact us to request a client organizer if needed. We can send the organizer via mail or email, or you can pick one up in person.
IRS has been sending more letters than we have ever seen before. We responded to twice as many letters in 2019 than we have in any other year. It is possible that this is due to IRS automating more of its correspondence in an attempt to minimize fraudulent returns. Regardless of the reason, it appears that this will continue for the foreseeable future. Know that if we fail to report information that you have provided to us, causing IRS to send a letter of adjustment, we will correspond for you free of charge. However, due to the recent increase in the volume of letters from IRS, we must charge a fee to respond to letters not caused by preparation error.
We would like to reiterate that the IRS will never contact taxpayers via phone. If you receive a phone call from a person or machine claiming to be from the IRS, please disregard or call us immediately. We are here to answer any questions concerning correspondence to or from IRS.

Tax Alerts
Tax Briefing(s)

On July 4, President Donald Trump signed into law a Paycheck Protection Program (PPP) application extension bill that Congress had quickly passed just before the Independence Day holiday. According to several senators, the measure was "surprisingly" introduced and approved by unanimous consent in the Senate late on June 30. It cleared the House the evening of July 1.

"If you can look into the seeds of time, and say which grain will grow and which will not, speak then unto me." — William Shakespeare

The U.S. Supreme Court upheld the Trump Administration’s rule under the Affordable Care Act (P.L. 111-148) that any nongovernment, nonpublicly traded employer can refuse to offer contraceptive coverage for moral or religious reasons, and that publicly traded employers can refuse to do so for religious reasons. Application of this rule had been halted by litigation, but the Administration is now free to apply it.

The IRS has issued guidance to employers on the requirement to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (Families First Act) ( P.L. 116-127). This reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent or qualified family leave equivalent credits under the Families First Act.

The IRS has issued guidance and temporary relief for required minimum distribution (RMD) changes in 2020. Distributions that would have been RMDs under old law are treated as eligible rollover distributions. The 60-day rollover period deadline for any 2020 RMDs already taken has been extended to August 31, 2020. Notice 2007-7, I.R.B. 2007-5, 395 is modified.

The IRS has clarified and provided relief for mid-year amendments reducing safe harbor contributions. An updated safe harbor notice and an election opportunity must be provided even if the change is only for highly compensated employees. Coronavirus (COVID-19) relief applies if a plan amendment is adopted between March 13, 2020, and August 31, 2020. For nonelective contribution plans, the supplemental notice requirement is satisfied if provided no later than August 31, 2020, and the amendment that reduces or suspends contributions is adopted no later than the effective date of the reduction or suspension. Notice 2016-16, I.R.B., 2016-7, 318, is clarified.

The IRS amended final regulations with guidance on the Code Sec. 199A deduction for suspended losses and shareholders of regulated investment companies (RICs). The amendments address the treatment of suspended losses included in qualified business income (QBI), the deduction allowed to a shareholder in a regulated investment company (RIC), and additional rules related to trusts and estates. The IRS had previously issued final and proposed regulations addressing these issues (NPRM REG-134652-18)

The Treasury Department and the IRS have released drafts of proposed partnership forms for tax year 2021 (the 2022 filing season). The proposed forms are intended to provide greater clarity for partners on how to compute their U.S. income tax liability for relevant international tax items, including claiming deductions and credits. The redesigned forms and instructions will also give useful guidance to partnerships on how to provide international tax information to their partners in a standardized format.

The Treasury and IRS have issued final regulations covering the Code Sec. 250 deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). Proposed regulations were issued on March 6, 2019 (NPRM REG-104464-18). The final regulations maintain the basic approach and structure of the proposed regulations and provide guidance on computation of the deduction and the determination of FDII, including in the consolidated return context. Additionally, rules requiring the filing of Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income, are finalized.

The IRS is calling on any taxpayers involved in syndicated conservation easement transactions who receives a settlement offer from the agency to accept it soon. The Service made this request in the wake of the Tax Court’s recent strike down of four additional abusive syndicated conservation easement transactions.

Schedule Appointment