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2013 New Year Change & Practice Update Seminar October 2013 Presented by Leonore Heavey, Barbara Reeves, and Bobbie Swafford Louisiana Department of Revenue.

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Presentation on theme: "2013 New Year Change & Practice Update Seminar October 2013 Presented by Leonore Heavey, Barbara Reeves, and Bobbie Swafford Louisiana Department of Revenue."— Presentation transcript:

1 2013 New Year Change & Practice Update Seminar October 2013 Presented by Leonore Heavey, Barbara Reeves, and Bobbie Swafford Louisiana Department of Revenue 1

2 Disclaimers This presentation is “informal advice” as contemplated by Louisiana Administrative Code 61:III.101.D.3, which provides that informal advice does not have the force and effect of law and is not binding on the Department, the public, or the individual seeking advice. Informal advice will have no effect on an audit Any opinions expressed are those of the presenters 2

3 WHAT’S NEW FOR 2013 INDIVIDUAL INCOME TAX 3

4 DOMA IRS Revenue Ruling requires same sex couples who were married in a state that recognizes same sex marriage to file married filing joint or married filing separately LDR response—RIB Current advice: – File your clients’ Louisiana tax returns as you would have prior to the IRS ruling See page 21 & What’s New section of the Resident return 4

5 Non Refundable Child Care Credit Child Care Credit Carried Forward From 2009 Through 2012 – Line 12C – The child care tax credit for taxpayers whose federal adjusted gross income exceeds $25,000 is not refundable. Unused credit amounts can be used over the next four years. For the 2013 tax year, credits carried forward from 2009 through 2012 can be applied on Line 12C. Any remaining child care credit from 2008 has prescribed can not be applied to the 2013 tax liability. (R.S. 47:297.4) 5

6 School Readiness Credit Carryovers School Readiness Credit carried forward from 2009 through 2012 – Line 12E – The school readiness credit for taxpayers whose federal adjusted gross income exceeds $25,000 may not be refunded and any unused credit amounts can be used over the next four years. For the 2013 tax year, credits from 2009 through 2012 can be applied on Line 12E. (R.S. 47:6104) Any remaining credit from 2008 has prescribed and cannot be used on the 2013 tax return 6

7 School Readiness Credit for Child Care Directors and Staff Refundable credit for eligible child care directors and staff Based on certain attained qualifications 2013 credit amounts based on CPI-U adjustment: Staff Qualification Level Increase from 2012Credit for 2013 Level IV Director or Level IV Staff$66$3,212 Level III Director or Level III Staff$55$2,676 Level II Director or Level II Staff$44$2,141 Level I Director or Level I Staff$33$1,606 7

8 Sugar Cane Trailer Conversion Credit The refundable credit for conversions made in 2013 is limited to $6,500 per trailer 2013 is the last year the credit can be earned No tax credit allowed for costs paid on and after January 1, 2014 See RIB for more information and for each year’s per trailer credit cap R.S. 47:6029 8

9 Changes to Solar Energy Systems Credit Act No. 428 of the 2013 Regular Session of the Louisiana Legislature made numerous changes to the tax credit provided in La. R.S. 47:6030 including: – Wind systems no longer qualify – Credit no longer available for installations at residential apartment complexes – Significant differences between eligibility for leased versus purchased systems – All system components purchased on or after July 1, 2013 must be compliant with the American Recovery and Reinvestment Act of “Buy American” (See RIB ) – Credit phases out with a final sunset of January 1, 2018 See RIB , Solar Energy Systems Tax Credit, for more information about the changes 9

10 Alternative Fuel Vehicle Credit Changes Act 219 of 2013 specifies that flex fuel vehicles do not qualify Act 427 of 2013 changed the definition of “alternative fuel” to “natural gas, liquefied petroleum gas, and any nonethanol based advanced biofuel” – Removes ethanol as alternative fuel – Retains electricity, but only if the vehicle – (a) has at least four wheels; (b) is manufactured primarily for use on public streets, roads, and highways and is able to attain a maximum speed of at least fifty five miles per hour; and (c) is propelled by an electric motor which draws electricity from a battery which has a capacity of not less than four kilowatt hours and is capable of being recharged from an external source of electricity – Low speed electric vehicles are no longer eligible See RIB for more information 10

11 Federal Income Tax Deduction Two new Affordable Care Act taxes took effect in Net Investment Income Tax – Will be added to federal taxes paid for purposes of determining the FIT deduction because it is a tax on net income 2. Additional Medicare Tax – Will NOT be added to federal taxes paid for purposes of determining the FIT deduction 11

12 New Additional Donation SNAP Fraud and Abuse Detection & Prevention Fund, Line 41, page 5 (“Amount Due Louisiana” section) For tax years beginning on and after January 1, 2013 The monies in the fund may be appropriated by the legislature only to enhance fraud and abuse detection and prevention activities related to the Supplemental Nutrition Assistance Program. Created by Act 635 of

13 Schedule D—Donation of Refund Line 4—SNAP Fraud and Abuse Detection and Prevention Fund–This fund provides fraud and abuse detection and prevention activities related to the Supplemental Nutritional Assistance Program. (R.S. 47:120.39) Line 7—Checkoff donation for the Louisiana Prostate Cancer Trust Fund has been changed to the Louisiana Cancer Trust Fund Line 12—Louisiana Bicentennial and Battle of New Orleans Commissions. Current donations will be distributed to the Battle of New Orleans Commission; the Bicentennial Commission has ended by operation of law. Line 22—Decorative Lighting on the Crescent City Connection (Act 194 of the 2013 Regular Legislative Session) Line 23—Operation and Maintenance of the New Orleans Ferries (Act 194 of the 2013 Regular Legislative Session) Line 24—Louisiana National Guard Honor Guard for Military Funerals (Act 392 of the 2013 Regular Legislative Session) Line 25—Bastion Community of Resilience. Taxpayers may donate all or part of their refund for the development of innovative housing for recent war veterans and their families. 13

14 Refund Options Act 818 of 2012—For tax years 2013, 2014 and 2015 taxpayers may choose among 3 options – Paper check – MyRefund card – Direct deposit to bank account Default is MyRefund card. Taxpayers will receive a MyRefund card if: – No refund option chosen – Direct deposit account number is incomplete or unreadable 14

15 Refund Reissue Notices Refund reissue notices--“blue letter” For refund cards issued in 2012 that have not been activated, and Un-cashed checks issued in 2012, Refunds for taxpayers who did not respond to LDR by October 18, 2013 will be turned over to Unclaimed Property 15

16 WHAT’S NEW FOR 2013— CORPORATE, COMPOSITE PARTNERSHIP, AND SALES & USE TAX 16

17 Corporate Income Tax No short form (dormant corporations and non-profits with UBTI will file the CIFT-620) Schedule G - Reconciliation of Federal and Louisiana Net Income: – Line 2d has been changed to require the reporting of Louisiana depletion in excess of federal depletion. – Line 2e has been changed to require the reporting of expenses not deducted on the federal return due to Internal Revenue Code Section 280C. – Line 2f has been changed to report subtractions from federal net income other than those reported on lines 2a through 2e. – Lines 2d through 2f were previously blank, allowing the reporting of subtraction items other than those reported on lines 2a through 2c. 17

18 Corporate Income Tax Non Refundable Credits - Schedule NRC: Dedicated Research - Code This credit has been deleted from the return. Tax Credit changes (see Individual Income Tax) – Solar energy systems, RIB & RIB – Alternative fuel vehicle, RIB – Sugar cane trailer conversion, RIB

19 Corporate Tax Incentive Changes Changes were made to several tax incentive programs administered by other state agencies. Contact the certifying agency to determine if your client is impacted by these program changes. Louisiana Economic Development (LED) – Research & Development Credit – Motion Picture Investor Credit – Enterprise Zone Credit/Rebate – Ports Investor Credit State Historic Preservation Office (CRT) – Commercial Historic Rehabilitation Credit (RIB ) 19

20 Composite Partnership Return Electronic only for 2013 tax year Via MEF Nonresident individual partners only – Resident partners cannot be included – No payments will be made by the partnership on behalf of resident partners – Consider adjusting estimated payments Will now include tax credits earned by the partnership Extensions for the composite return will also be electronic only 20

21 Sales and Use Tax Change to Vendor’s Compensation: – Rate reduced from 1.1% to 0.935% – See RIB Taxpayers must use current form to properly calculate the correct vendor’s compensation amount – Use R-1029 (7/13) from July 2013 forward – Use R-1029 (7/12) for tax periods between July 2012 to June 2013 Using the wrong return will cause processing delays and may require you to refile using the correct return If the July 2013 return was filed before the new return was available, if you pay any additional tax resulting from the decrease in vendor’s compensation, interest and penalty will be waived 21

22 Sales and Use Tax—Exemptions Act 271 [R.S. 47:305(D)(2)(a)] expands the exemption for patients and staff of hospitals to exempt the sale of meals furnished to staff and residents of nursing homes, adult residential care providers, and continuing care retirement communities – Effective June 13, 2013, however the provisions of the Act are retroactive. Other legislative changes—go to click on “Publications” tab and select “Legislative Summaries” – Legislative Summaries are available for

23 Sales and Use Tax—Exemption Certificates As of August 1, 2013, the state and local sales and use tax exemption certificate for sales occurring at events sponsored by nonprofit organizations may be obtained annually from LDR instead of on a per event basis Beginning January 1, 2014, direct pay, sale for resale, and manufacturing machinery and equipment sales tax exemption certificates will be renewed automatically unless – LDR determines the taxpayer no longer qualifies for the exemption, or – Taxpayer has not met its filing and payment obligations 23

24 Use Tax Enforcement Authority Act 425 of 2013 created R.S. 47:302(U): – Collection of consumer use tax. It is the duty of the secretary of the Department of Revenue to collect all taxes imposed pursuant to this Chapter and Chapters 2-A and 2- B of this Subtitle which may be due upon the sale by a remote seller of tangible personal property or services in Louisiana. The secretary is authorized and directed to employ all means available to ensure the collection of the tax in an equitable, efficient, and effective manner. If you do not already include a question regarding online or catalog purchases on which your clients paid no sales tax, please add such a question. 24

25 Use Tax Enforcement Activities LDR Discovery Unit is utilizing third party data to assist with use tax compliance Pilot—Tobacco Excise and Use Tax notices – Mailed late September 2013 – Covers periods – Letter includes print out of all tobacco products purchased from out of state vendor where taxes not remitted by vendor or taxpayer, including date, product, quantity and purchase price 25

26 Fiduciary and Partnership Information Extensions Please use appropriate form – Fiduciary—R-6466 (prior to 2012, R-6466 was for both returns) – Partnership—R6463 As these returns become electronic, the extensions will become electronic Look for fiduciary to become electronic for 2014 returns filed in

27 AMNESTY 2013—A FRESH START 27

28 Amnesty Basics Act 421 of the 2013 Louisiana Legislature instituted a three- year statewide state tax amnesty program The dates for Amnesty 2013: – Monday, September 23 – Friday, November 22 The deal for Amnesty 2013: Pay 100% of the tax, all fees and ½ of the interest owed & LDR will waive 100% of the penalty and the other ½ interest – In 2014, no penalty waiver and only 15% of interest will be waived – In 2015, no penalty waiver and only 10% of interest will be waived The website: The phone number:

29 Amnesty Tips If your client only owes penalty, they must apply via the website. Penalties will not be waived without an application. If a taxpayer cannot afford to take advantage of amnesty for all eligible periods, tax periods can be deselected on the Amnesty website No installment agreements accepted for amnesty unless all payments received by LDR by November 22,

30 No Amnesty Invitation? Invitations were mailed to most recent address LDR had on file. Call amnesty phone number to obtain letter ID number then apply via the amnesty website Decedents did not receive an amnesty invitation. Representatives may walk in or call to determine payoff amount. Proof of representation is required. Taxpayers with taxes under field audit and litigation were mailed letters with contact information. Call to determine payoff amount. 30

31 Amnesty LDR Walk-in Site Alexandria 2nd Floor, Rapides Parish Courthouse 701 Murray Street Alexandria, Louisiana :00 a.m. – 4:00 p.m. on the following days:  October 1, 3, 8, 10, 17, 18, 22, 24, 29, and 31  November 5, 6, 7, 12, 13, 14, 15, 18, 19, 20, 21, and 22 31

32 Amnesty LDR Walk-in Site Lafayette—Site I Representative Vincent Pierre 800 W. Congress St., Suite A Lafayette, Louisiana :00AM-3:00PM (This office opens at 9:00a.m. and closes from 12:00 to 1:00pm for lunch) October 1-2, 7-9, 14-16, 21-23, November 5-7, 12-15,

33 Amnesty LDR walk-in site Lafayette—Site II Department of Children and Family Services 825 Kaliste Saloom Rd. Brandywine Complex Bldg 6, Suite 100 Lafayette Louisiana :00AM- 3:00AM October 1-4, 8-11, 15-18, 22-25, November 1, 5-8, 12-15,

34 Amnesty LDR Walk-in Site Lake Charles—Site I Representative A.B. Franklin 2808 East Broad Street Lake Charles, Louisiana :00 AM-4:00 PM (This office closes from 12:00-1:00 PM for lunch) – October 1-3, 8-10, 15-16, 22-23, – November 5-7, 12-15,

35 Amnesty LDR Walk-in Site Lake Charles—Site II Senator Ronnie Johns 1011 Lakeshore Dr., Suite 515 Lake Charles, Louisiana :30am - 4:00pm (This office opens at 8:30a.m. and closes from 12:00pm to 1:00pm for lunch) October 1-3, 8-10, 15-16, 22-23, November 5-7, 12-15,

36 Amnesty LDR Walk-in Site Monroe Monroe State Office Building Room #242, 2nd Floor Conference Room 122 St John Street Monroe, Louisiana :00 a.m. – 4:00 p.m. on the following days:  October 2, 3, 9, 10, 16, 17, 23, 24, 30, and 31  November 5, 6, 7, 12, 13, 14, 15, 18, 19, 20, 21, and 22 36

37 Amnesty LDR Walk-in Site New Orleans Louisiana Department of Revenue, Southeast District ( ) 1450 Poydras Street Suite 800 New Orleans, Louisiana :00 AM – 4:00 PM (This location closes from 12:00 p.m. to 1:00 p.m. for lunch.) September 23-November 22,

38 Amnesty LDR Walk-in Site Shreveport Shreveport State Office Building Conference (Room located in Basement) 1525 Fairfield Avenue Shreveport, LA :00 a.m. – 4:00 p.m. on the following days:  October 2, 3, 9, 10, 16, 17, 23, 24, 30 and 31  November 5, 6, 7, 12, 13, 14, 18, 19, 20, 21 and 22 38

39 PRACTICE UPDATES —DOING BUSINESS WITH LDR 39

40 INDIVIDUAL INCOME TAX AVOIDING DELAYS 40

41 Individual Income Tax ▶ File electronically ▶ E-Services help line (225) or ▶ Refund turnaround – – weeks for paper – 21 days for e-filed 41

42 Individual Income Tax Modern E-filing (MEF) will allow for the submission of PDF files with e-filed returns. Return attachments can also still be submitted via E- Fax number:  (225) Include taxpayer’s name, account number and tax filing period on the top of the first page. 42

43 Tips to Remember Carefully check social security numbers. Be sure that mailing addresses are kept up to date. When entering the mailing address, be sure it matches the Postal Service information. If the address doesn’t match perfectly, there will be processing delays. 43

44 Address Changes  Taxpayers must ensure that their mailing addresses are up to date  Failure to update a changed mailing address can result in delayed income tax refunds and correspondence  Please update your address with the US Postal Service. LDR does monthly updates.  You can change your address on the LDR website:www.revenue.louisiana.gov/AddressChangewww.revenue.louisiana.gov/AddressChange  Businesses can add or change addresses in LaTap using the edit feature. 44

45 Common Filing Delays  Name issues -- Always file with the same names (first, middle, last) in the same order each year.  Math errors.  Conflicts with third party data or compliance reviews. ▶ Difference in estimated payments and credit carry forwards reported compared to LDR records. 45

46 Common Filing Delays  “Other” claimed on Schedule E, F or G.  Large Refunds.  Amended Returns completed incorrectly.  Tip--Amended returns should be completed as if no other return was ever filed for the period. 46

47 Paper Return Tips Use the correct year form Submit all pages of the tax return even if left blank Supply all essential information and complete the entire return All taxpayers must sign the return as well as a third party preparer Be sure that your printer ink is working properly and the return is easily read. 47

48 Paper Return Tips Don’t mail checks without a tax return or appropriate voucher. Make sure to include the Social Security Number(s) or the account number and tax year on all payments and correspondence. Be sure to make the check payable to the Louisiana Department of Revenue. 48

49 Paper Return Tips Returns with a balance due go to a different PO Box than refund returns – A return for which a payment is due should be mailed to: P.O. Box 3550, Baton Rouge, LA – All other individual income tax returns should be mailed to: P.O. Box 3440, Baton Rouge, LA

50 Paper Return Tips If requesting a direct deposit of a refund, carefully check the bank account and routing numbers. Sending your return via certified mail or courier will not speed processing of your return and will more likely delay your refund. 50

51 Documentation Required  Tax Return Instruction Booklets provide documentation requirements for each credit.  Instruction Booklets can be downloaded from the LDR website or call (225)  IVR interactive forms request rollout anticipated by year end.  If required documentation is not submitted, credit will be denied until documentation provided. 51

52 Refunds  MyRefund Cards  Optional for the 2014 filing season.  MyRefund cards are administered by Chase.  Contact  To activate  For lost or stolen cards  To check card balance 52

53 MyRefund Cards  To request a check—Do not activate card. Contact LDR.  If card is held for 6 months or longer before check request, check issuance process can be very lengthy.  If card not activated with one year, funds are returned to LDR  MyRefund card good for 3 years, but only if activated with the first year. 53

54 Citizens Insurance  RIB provides information on Claiming the Credit for Citizens Property Insurance Assessments  Claim once per tax period on IT-540 or IT-540INS or CIFT-620 or CIFT-620INS  Claim in the tax period that corresponds with date the assessment paid.  Under current Citizens bond repayment schedule, Citizens assessments eligible for the credit will be paid through

55 Citizens Insurance  If paid in 2012, claim credit on INS in 2012 or claim on the 2012 tax return due in  Do not claim unless client has declaration page from insurance company and proof of payment.  Submit copy of declaration page with paper filed returns only.  Keep declaration page for four years if return e-filed.  If paper INS Form is used refund will be by check  55

56 Citizens Insurance  Under R.S. 47:1623A, refunds prescribe three years from the 31 st day of December of the year in which the tax became due.  A Citizens assessment paid in 2009 must be claimed on the 2009 income tax return or 2009 INS Request for Refund form.  Taxes associated with 2009 income tax returns became due on January 1,  Refunds of Citizens assessments paid in 2009 must be claimed no later than 12/31/

57 CORPORATION INCOME AND FRANCHISE TAX AVOIDING DELAYS 57

58 Common Filing Errors  FAILURE TO FILE INITIAL CFT RETURN  CFT-4 — minimum $10 due unless LLC.  Due by 15 TH day of 3rd month following month of incorporation.  Provides administrative information including FYE.  Accounts will be set up as calendar year end without initial franchise return. 58

59 Common Filing Errors  DORMANT ENTITY FAILURE TO FILE RETURNS  Annual returns still remain due after corporation stops operating and/or filing federal returns.  Returns continue to be due until dissolution, revocation or withdrawal from the Secretary of State.  Estimated assessments will be issued if no return is filed until the account is officially closed. 59

60 Common Filing Errors  FAILURE TO FILE FINAL RETURN  Final return due for end of the accounting period.  No franchise tax due.  Tax due if gains realized on liquidation of assets.  Close account using form on website and copy of the dissolution from Secretary of State.  Failure to dissolve with the Secretary of State will result in billings. 60

61 Common Filing Errors  NO ACCOUNT NUMBER ON RETURN  Since 2005 CIFT returns subject to administrative or negligence penalty.  5% OR $10.00, whichever is greater.  CIFT returns now returned if LA account number not on return. 61

62 EXTENSION OF TIME TO FILE ELECTRONIC MANDATE 62

63 Extension Requests ▶ Beginning with returns due in 2013, taxpayers needing additional time to file an individual or corporate income tax return will need to electronically submit a request for an extension of time to file. ▶ Reminder: By filing an extension application, you are requesting only an extension of time to file. ▶ Not an extension of time to pay the tax. ▶ Payments received after the return due date will be assessed interest and late payment penalty. 63

64 Extension Requests  Electronic extension requests may be submitted via:  The Department of Revenue’s web site at  Telephone -- IVR (225)  Third party tax preparation software 64

65 LOUISIANA GENERAL SALES TAX AVOIDING DELAYS 65

66 Filing Frequency ▶ Filing Frequency  A taxpayer can have their filing frequency changed. However, the change must be requested in writing and approved by the Department.  Filing frequencies are reviewed by the Department once a year and notices are sent to the taxpayers. Changes are effective at the beginning of the calendar year. 66

67 Sales Tax Errors ▶ USING THE WRONG FORM  The sales tax return has changed several times in the last few years.  The line #’s and/or the deduction percentages change from year to year.  Be sure the form is correct for the period being filed.  Never manually correct a preprinted form. 67

68 Sales Tax Errors ▶ MUST USE BAR CODED RETURN FOR CORRECT PERIOD  Use taxpayer bar coded return if possible. This speeds up processing.  Bar code has all taxpayer information as well as the filing period.  Computer will read bar code, it cannot read any manual adjustments made to the return. 68

69 Sales Tax Errors ▶ LINE ITEM ERRORS  If no transactions for the period, put zero on Line 1.  Do not use “-0-” for a zero – no quotes or dashes  Write numbers legibly and within the box.  Do not use cents – round to nearest dollar. 69

70 Sales Tax Errors ▶ OTHER ERRORS  Taking vendors compensation on delinquent or no remit returns  Deductions on front of return with no details on back of return  Using incorrect deduction or exemption 70

71 Claim for Refund Due to Bad Debts  Form R Claim for Refund (Bad Debts)  The debt must be deducted on a federal income tax return before the Department can issue a sales tax refund on a bad debt.  Do not use this form as a substitute for the filing of an amended return or to correct an error on a previously filed tax return.  The Department will process one refund claim per year for each dealer.  If all or some portion of the debt is collected, the amount collected shall be reported as a new sale for the period when the recovery is made. 71

72 Parish E-File Program  Parish E-file is a web-based application allowing businesses to file sales tax returns and remit sales tax payments for local tax authorities from one centralized site.  Free online service available on LDR website.  For questions, visit or call (225) Help 72

73 DISCOVERY FEDERAL/STATE MATCH & MISMATCH 73

74 Federal/State Match Program  LDR receives an electronic transmission from the IRS on taxpayers who have filed federal tax returns with Louisiana mailing addresses.  LDR identifies taxpayers who have not filed Louisiana returns for the period.  LDR then sends Federal/State Match questionnaires to those taxpayers. 74

75 Federal/State Match Questionnaire Please respond to this questionnaire, if you are not required to file a Louisiana income tax return for the year. It is less burdensome to clear up before an estimated assessment is issued. Notice of Intent to Offset and/or Suspend Licenses. Debt will be submitted to FMS (Federal Management Services) to offset federal refund. Debt could be assigned to a collection agency. 75

76 Federal/State Match F ederal/State Match—Failure to Respond to Questionnaire If no response is received within the allotted time, a bill is generated. Failure to respond can bring a matter to seizable status in just over 3 months: 30 Day Proposed Assessment 60 Day Formal Assessment SOFA Notification of seizable status 76

77 Optional Reply to Questionnaire Military I was a member of the armed service stationed in Louisiana. None of my income or my spouse's (if applicable) was derived from Louisiana sources. My legal state of residence for the referenced tax period was the State of __________________________. 77

78 Federal/State Match—Military Personnel The Barksdale legal office is working with LDR to come up with a program to ensure local military members are taxed in accordance with the proper state laws. Airmen can bring a copy of their orders and a W-2 form to the legal office and they will handle the issue. For more information contact the 2 BW legal office at (318) LDR hopes to work with other military bases in the state to come up with a solution to the issue of military personnel with Homes of Residences in other states. Neither they or their spouses are subject to LA Individual Income Tax. 78

79 Optional Reply to Questionnaire Already Filed If you have filed a Louisiana income tax return: – return this letter, – a copy of your Louisiana return, – W-2 forms and, – if applicable, a copy of the canceled check. 79

80 Optional Reply to Questionnaire Not Required to File If you believe you were not required to file a Louisiana income tax return: – Set forth your reasons why you were not required to file in the appropriate area on the back of this letter – Return the letter to LDR with documentation to substantiate your stated reasons (such as a copy of a return filed with another state or other proof of residency, etc.) 80

81 Optional Reply to Questionnaire Need to File If you were required to file a Louisiana income tax return, but have not: – Contact an office of the Department of Revenue if a tax return is needed or – The return can also be downloaded from – Or, file electronically 81

82 Federal/State “Mismatch” Program recently implemented in Louisiana that matches federal information to state information, including – AGI – FIT – Itemized Deductions – Filing Status Some first year errors were encountered – Schedule E and H reconciliation issues – IRS error on decedent returns with only one exemption – Although some billings are in error, not all are. Contact LDR to be certain. Reviewing 2010 information during upcoming year 82

83 Remaining 2009 Schedule E or H Issues? If your client received a notice regarding individual income tax liability for 2009 and you suspect a Schedule E or Schedule H error, contact: Bobbie Swafford at (225) or by at 83

84 IRS ADJUSTMENTS 84

85 IRS Adjustments Louisiana Revised Statute 47:103(C) requires taxpayers, whose federal returns are adjusted, to furnish a statement which discloses the nature and amounts of such adjustments. This disclosure must be furnished within 60 days after the adjustments have been made and accepted. – Related Amnesty tip: If RAR refund adjustment not submitted to LDR within 60 days, no refund will be allowed 85

86 CP2000 and RAR Adjustments  CP2000’s are automatic adjustments made from electronic matches of information data returns received by the IRS.  RARs (Revenue Agent Reports) are results of an IRS audit. 86

87 CP 2000 and RAR Adjustments  Why did I receive this notice?  The IRS made changes to your federal return so LDR made the corresponding changes to your state return.  You must provide verification of subsequent changes from the IRS to dispute LDR’s changes to AGI or FIT. 87

88 CP 2000 and RAR Adjustments  How do I dispute the state adjustment?  A current IRS account transcript should be provided.  LDR’s proposed assessment will not be adjusted until documentation is received verifying that the IRS has changed their audited amounts. 88

89 SUSPENSION OF LICENSES COLLECTION INITIATIVES 89

90 Driver’s License Suspension  R.S. 47:296.2 provides for the authorization to suspend the driver’s license of Louisiana taxpayers who have an outstanding individual income tax liability;  LDR promulgated LAC 61:I.1355 as the rule to further define how this statute is applied. 90

91 Driver’s License Suspension ▶ License will be suspended if:  A liability reaches final and non-appealable status, and  Taxpayer owes in excess of $1,000 in net tax for any one period.  Net tax due is defined as tax due reported (or assessed in the event of no return filed) less any payments or credits processed for the period, exclusive of any interest, penalties, or fees. 91

92 Driver’s License Suspension  Regular driver’s licenses, as well as, Commercial driver’s licenses will be suspended.  However, Class I (ID cards) and Class H (Handicapped licenses) will not be suspended.  The Department of Public Safety will charge $60 reinstatement fee each time the license is suspended. 92

93 Drivers License Suspension ▶ What if the taxpayer files married filing jointly?  The driver’s license of the primary SS# will be suspended.  In the event the husband is the primary on one period, and the wife is the primary on another and in excess of $1,000 is owed on both periods, both licenses will be suspended.  Both will have to pay the DPS $60 reinstatement fee. 93

94 Driver’s License Reinstatement ▶ Reinstatement process:  If the liability is an estimate, the taxpayer must file returns.  Taxpayer will have to pay the entire liability or enter into an installment agreement.  Installment agreements, require 20% down payment with 12 months payout or less. 94

95 Driver’s License Reinstatement ▶ Reinstatement process:  Once payment is made or an installment agreement entered, LDR will issue the taxpayer a clearance letter.  The letter will be signed with the embossed state seal.  The taxpayer must bring the original clearance letter to DPS and pay the $60 fee to have the driver’s license reinstated. 95

96 Driver’s License Reinstatement ▶ Reinstatement process:  Taxpayer must physically bring the clearance letter to DPS – they do not accept faxed or mailed clearance letters;  A breached installment agreement results in another suspension and an additional $60 reinstatement fee. 96

97  LSA R.S. 47:296.3 provides for the authorization to suspend hunting and fishing licenses of Louisiana taxpayers who have an outstanding individual income tax liability.  LDR promulgated LAC 61:I.1351 as the rule to further define how this statute is applied. Hunting and Fishing License Suspension 97

98 Hunting and Fishing License Suspension ▶ Criteria to suspend hunting or fishing license:  Taxpayer owes in excess of $ in net tax for any one period.  Net tax due is defined as tax due reported (or assessed in the event of no return filed) less any payments or credits processed for the period, exclusive of any interest, penalties, or fees.  WLF does not charge a reinstatement fee. 98

99 Hunting and Fishing License Reinstatement  Reinstatement process:  If the liability is an estimate, the taxpayer must file returns.  Taxpayer will have to either pay the entire liability or enter into an installment agreement for payment. 99

100 Hunting and Fishing License Reinstatement  Reinstatement process:  Once the taxpayer has made payment, or entered into the installment agreement, the LDR employee will issue the taxpayer a clearance letter.  The clearance letter will be faxed to Wildlife and Fisheries (WLF).  The taxpayer does not have to go to WLF to have license reinstated. 100

101 Removal of License Liens via Credit Card Payment  Note: Using a credit card to pay balances due requires additional transaction time if licenses have been levied for prior non-payment.  Once taxpayer obligations are met, LDR will notify and authorize the issuing state agencies to remove liens within 72 hours. 101

102 REMITTING PAYMENTS & DOCUMENTATION & HOW TO GET IN TOUCH WITH LDR 102

103 Tax Payments  If you received a notice of tax due, mail your payment and the payment coupon to LDR in the reply envelope.  Electronic payment options are convenient, safe, and secure methods of paying taxes. You can authorize an electronic funds withdrawal, or use a credit card or a debit card.  For more information on electronic payment options, visit the LDR website at 103

104 Tax Payments ▶ Individual income tax liabilities may be paid electronically by an electronic bank account debit via the Louisiana File Online applicationLouisiana File Online ▶ Business tax liabilities may be paid electronically using LaTap Or pay by credit card using Official Payments at Paymentsww.officialpayments.com – Credit card payments may also be initiated by telephone at – Credit card payments incur a 2.49 % convenience fee. 104

105 Contact Us  General (225)  Individual (225)  Business (225)  IVR (225) (#1 Refunds, #2 Electronic Funds Transfer, #3 Electronic Extension Request, #4 Credit Card Payments, #5 Tax Forms, #6 Other.)  Forms (225)  105

106 Contact Us ▶ Collections  General(225)  Enforcement (225)  Fax(225)  ReveFax(225) ▶ Office Audit  ReveFax (225) ▶ LaTap, LaWage, and Parish E-File (225)

107 Documentation Requested by Collection Division Collections/Enforcement Fax Numbers (225) (225) Individual (225) Business Telephone: (225) Address: P.O. Box Baton Rouge, LA

108 Contact Us via Send an via the LDR website and your inquiry will be directed to the appropriate division. https://esweb.revenue.louisiana.gov/Contact Us/default.aspx https://esweb.revenue.louisiana.gov/Contact Us/default.aspx Please allow 3-5 business days for a response. 108

109 DO NOT send documentation via boxes on LDR website. Do not send documentation that has been requested by Office Audit Division or the Collection Division via these boxes. Use snail mail or fax. 109

110 SOME FINAL INFORMATION MISCELLANEOUS TIPS 110

111 Administrative Penalties  In addition to the delinquent filing and payment penalties, other administrative penalties may be assessed--  Negligence Penalty  Assessed for repeated delinquent filings.  5% of tax or $10.00, whichever is greater.  Collection Fee  Assessed when a tax period has been in seizable status for 61 days or more.  Fee 15% of the total unpaid balance. 111

112 Federal Offset Program ▶ If taxpayer is paying a debt through an installment agreement, any money received through the Offset Program will reduce the length of the agreement, but it will not affect the scheduled payment amount. ▶ Any unpaid amount will remain eligible for offset until it is paid in full. Interest, penalties and fees will continue to accrue until all of the tax debt has been paid in full. 112

113 “November 18” Due Date Letters Some taxpayers who requested extensions via the LDR website received letters stating that November 18, 2013 is the final extended due date for 2012 IIT returns The actual due date is Friday, November 15 The November 18 due date will be honored for those taxpayers who received letters with this error 113

114 Frequently Asked Questions (FAQs) Examples: – How can I get a copy of my tax return? – How can I make a payment with my extension request? – Can I amend my return on the department’s website? – I filed my individual income tax electronically and selected to have my refund deposited directly into my bank account. It has been over two weeks and the money has not been credited. What should I do? 114

115 LDR Subscription Services Tax Topics Subscription Service – If you would like an when LDR posts a new Tax Topic, please submit the information requested at this link: – tss.aspx tss.aspx Policy Statement Subscription Service – If you would like an when LDR issues or updates a Policy Statement, submit the information requested at this link: – psss.aspx psss.aspx 115

116 Our Contact Information Thank you! 116


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