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As previously reported (click here), the payment of certain severance benefits may be exempt from FICA taxes. Under the Sixth Circuit’s decision in Quality Stores (click here), severance pay made in connection with an involuntary separation from employment due to a reduction in force, plant shutdown or similar condition (“supplemental unemployment compensation benefits”) are not subject to FICA taxes. The request by the IRS for an en banc review of the Quality Stores decision was denied by the Sixth Circuit last month.Continue Reading File for FICA Tax Refunds Before April 15

As the end of 2012 approaches, we consider what a notable year it has been for the future of healthcare reform, starting with the United States Supreme Court’s decision to uphold key provisions of the Patient Protection and Affordable Care Act (“PPACA”), and culminating with the November elections. Since PPACA’s enactment in 2010, employers have seen the roll out of various new requirements and disclosure obligations with respect to the healthcare benefits provided to employees. As we move closer to PPACA’s “individual mandate,” which becomes effective in 2014 and is viewed as the hallmark of the healthcare reform legislation, the following is a summary of certain requirements that employers should be aware of for 2013.Continue Reading What Employers Need to Know About Healthcare Reform for 2013

By Matthew Richardson

A California appellate court recently held as unconstitutional the California statutes extending the benefits of selling “qualified small business stock” (QSBS) to California taxpayers. In Cutler v. Franchise Tax Board (2012) 208 Cal. App. 4th 1247, the court held that the QSBS exclusion and deferral statutes – California Rev. & Tx. Cd. §§ 18038.5 and 18152.5 – discriminated against non-California corporations and therefore violated the Commerce Clause of the U.S. Constitution.Continue Reading FTB issues Notice to Retroactively Deny “Qualified Small Business Stock” Tax Benefits. Amended Returns Should be Filed.

On September 24, 2012, the IRS issued Proposed Regulations §§ 53.4942(a)-3 and 53.4945-5 in order to reduce barriers to international grant-making made by private foundations. Secretary of State Hilary Clinton announced the guidance during an address at the Clinton Global Initiative. In particular, the new guidance modernizes the process of evaluating whether a foreign non-governmental organization is equivalent to a U.S. public charity for purposes of charitable giving.Continue Reading IRS Issues Proposed Regulations To Make International Grant-Making By Private Foundations Easier

The IRS recently announced that a contribution to a domestic LLC that is wholly owned and controlled by an IRC § 501(c)(3) charitable organization will be treated as if the contribution were made directly to the charitable organization, provided that the LLC has not elected to be taxed as a corporation. Although the IRS had previously provided guidance to public charities and private foundations as to the tax treatment of operating through such single-member LLCs, the July 31, 2012 release of Notice 2012-52 was the first guidance given to individual and corporate contributors as to the deductibility of their contributions. Left unaddressed, however, is the tax treatment of a contribution to a single-member, “disregarded entity” LLC organized in a foreign jurisdiction.Continue Reading IRS Confirms Charitable Contribution Deduction for Gifts Made to Single-Member LLCs

The IRS recently issued proposed regulations that provide new examples that illustrate what types of investments qualify as "program-related investments" (PRIs). These new examples are based on published guidance and on financial structures that had previously been approved in private letter rulings.Continue Reading IRS Issues New Guidance to Private Foundations on Program Related Investments

As previously reported in the January 9th blog article, today is the last day to file Form 8937 to report 2011 corporate actions that affect stock basis, as required under Internal Revenue Code section 6045B. Because the actual IRS Form 8937 was only very recently released, and because a number of questions about the form have arisen following its release, the IRS issued a Notice (Notice 2012-11) stating that it will not impose penalties for reporting incorrect information, provided that the issuer makes a good-faith effort to report timely and accurately. Further, the Notice states that the issuer can satisfy its filing requirement by posting the required information in a readily accessible format to an area of its primary public Web site.

For further information, please contact Matthew Richardson at (213) 617-4222.Continue Reading Further Relief on Section 6045B Reporting