ncsa blog

In a press release, the IRS reminded taxpayers who receive requests from the IRS to verify their identities that the Identity Verification Service website at idverify.irs.gov offers the fastest, easiest way to complete the task. Taxpayers may receive a letter when the IRS stops suspicious tax returns that have indicators of being identity theft but contains a real taxpayer's name and/or SSN. Only those taxpayers receiving Letter 5071C should access idverify.irs.gov.

The website will ask a series of questions that only the real taxpayer can answer. Once the identity is verified, the taxpayers can confirm whether or not they filed the return in question. If they did not file the return, the IRS can take steps at that time to assist them. If they did file the return, it will take approximately six weeks to process it and issue a refund.

Letter 5071C is mailed through the USPS to the address on the return. It asks taxpayers to verify their identities in order for the IRS to complete processing of the returns if the taxpayer did file it or reject the returns if the taxpayers did not file it. The IRS does not request such information via e-mail, nor will the IRS call a taxpayer directly to ask this information without you receiving a letter first. The letter number can be found in the upper corner of the page.

The letter gives taxpayers two options to contact the IRS and confirm whether or not they filed the tax return. Taxpayers may use the idverify.irs.gov site or call a toll-free number on the letter. Because of the high volume on the toll-free numbers, the IRS-sponsored website, idverify.irs.gov, is the safest, fastest option for taxpayers with web access.

Members Lottie Neal of Greensboro and Alene Dale of Granite Falls both suffered heart attacks this month. Alene says she is not sure she had a heart attack and doesn’t show any ill effects. She was battling a kidney stone also. Lottie did some time in Moses Cone Hospital but made it out in time to travel with Sarah McKoy to PTI in Myrtle Beach. Keep these ladies in your prayers for continued healing. Also in another note Jack Williams continues to be alive and well. He was spotted at the recent Hickory Chapter meeting. Keep going Jack!

The NC Department of Revenue issued an important notice stating that, effective January 1, 2015, the general 4.75% state and applicable local and transit rates of sales and use tax apply to the sales price of tangible personal property sold to a real property contractor for use by the real property contractor in erecting structures, building on, or otherwise improving, altering, or repairing any real property.

A taxpayer that operates as a retailer prior to January 1, 2015, and that makes retail sales of tangible personal property that is installed or applied to a real property and that furnishes the labor to install or apply the tangible personal property sold at retail that becomes a part of real property is required to apply the tangible personal property sold at retail that becomes a part of real property is required to adopt the new application of sales and use tax to such transactions on or after January 1, 2015.

A real property contractor is a person that contracts to perform construction, reconstruction, installation, repair, or any other service with respect to real property and to furnish tangible personal property to be installed or applied to real property
in connection with the contract and the labor to install or apply the tangible personal property that becomes part of real property.

A retailer-contractor is a person that acts as a retailer when it sells tangible personal property at retail and as a real property contractor when it performs real property contracts.

The NC Department of Revenue issued a 1 page "summary" of tax law changes. Here are some of the item:

Tax rates for individuals are 5.8% and businesses 6%.

The standard deductions are $7,500 single and separate, $15,000 joint and widow(er), and $12,000 head of household.

Itemized deductions are limited to charitable contributions and the limited amount of up to $20,000 for mortgage interest on a qualified residence and real estate property tax.

The child tax credit for children under age 17 may increase for some taxpayers.

Personal exemptions, credit for child and dependent care, and earned income credits are gone.

The $50,000 deduction of net business income is gone.

For retirees, the deductions for retirement benefits received from vested NC State, local, and federal governments pursuant to the Bailey settlement still is available
as is the deduction for taxable Social Security Benefits.

The deductions for other government retirement income (up to $4,000) and private retirement income (up to $2,000) no longer are available.

Effective October 1, a privilege tax at the 4.75% general state and applicable local and transit rates of sales and use tax are imposed on a retailer to the sales price of or the gross receipts derived from a service derived from a service contract sold at retail.  A service contract is defined as a contract where the obligor under the contract agrees to maintain or repair tangible personal property or a motor vehicle.  An obligor is a person who is legally or contractually obliged to provide the services for the service contract purchaser. A facilitator is a person who contracts with the obligor of the service contract to market the service contract and accepts payment from the purchaser.

Qualifying farmers get an exemption from sales and use tax for certain tangible personal property, digital property, and services. Effective July 1, a qualifying farmer is a person who has an annual gross income for the pre- ceding income tax year of $10,000 or more from farming operations or who has an average annual gross income for the 3 preceding income tax years of $10,000 or more from farming operations. A qualifying farmer includes a dairy operator, a poultry farmer, an egg producer, a livestock farmer, a farmer of crops, and a farmer of an aquatic species. For purposes of the exemption, an item is used in farming operations if it is used for planting, cultivating, harvesting, or curing of farm crops or in the production of dairy products, eggs, or animals. To apply for a qualifying farmer ex- emption certificate number, complete and submit Form E-595QF, Application for Qualifying Farmer Exemption Certificate Number, to the DOR.

A person who does not meet the definition of qualifying farmer may apply to the DOR for a conditional farmer exemption certificate number. A conditional farmer may purchase qualifying items exempt from sales and use tax to the same extent as a qualifying farmer. To receive a conditional farmer exemption certificate, the person must certify that the person intends to engage in farming operations and that the person will timely file state and federal tax returns that reflect income and expenses incurred from farming operations. The certificate number is valid for 3 years and cannot be renewed or extended. To apply for a conditional farmer exemption certificate number, complete and submit Form E-595CF, Application for Conditional Farmer Exemption Certificate Number. The DOR may not issue a conditional farmer exemption certificate to a person who has had a conditional farmer exemption certificate issued during the prior 15 income tax years.

In PD-14-3, the NC DOR announced that same-sex couples who are legally married under any state law by December 31, 2014, generally must file a NC income tax return using the same filing status claimed on the federal tax return. However, if one spouse is a nonresident individual and has no NC taxable income for the tax year, the spouse that is a resident of NC or has NC taxable income may elect to file a return as married separate. Individuals in a domestic partnership, civil union, or long-term relationship, but not legally married, must claim the filing status of single or, if qualified, head of household or qualifying widow(er).

Same-sex couples who were legally married prior to 2014 but who have not filed original returns for those tax years as of October 24, 2014, also generally must file a NC income tax return using the same filing status claimed on the federal return. Individuals who entered into a same-sex marriage prior to 2014 and filed a federal income tax return with a filing status of married filing joint or married filing separate but filed separate NC income tax returns prior to October 24, 2014, claiming the filing statues of single or, if qualified, head of household or qualifying widow(er) as previously required by NC law may, but are not required to, amend their NC income tax returns for any corresponding tax years within the statute of limitations. Use Form D-400X to amend a NC individual income tax return.

Notice 2014-55 expands the permitted change rules for coverage under a Cafeteria Plan for two situations in which the employee wants to purchase coverage through a competitive marketplace established under an Exchange or a Health Insurance

Since the Loving suit, the IRS is reluctant (officially, cannot) use the term RTRP.  Technically, RTRP is allowed to be grandfathered into the Annual Filing Season Program (AFSP) with the conditions of RTRPs meeting the required CE course renewal requirements.  As far as the IRS is concerned, AFSP is what RTRP becomes because the IRS cannot legally use the term RTRP even though the IRS cannot prohibit RTRPs from using it. All AFSPs will be listed in the new IRS tax preparer directory.

Wow! 59 attendees came to Cary for the seminar held on September 25-26 at Embassy Suites. The chapters were represented well at the recent seminar. It was good to see Wilmington members Marie Izzo and husband John as well as Ruth McClellan and Susan Corliss Bland in attendance. Kudos to these chapter members for taking part in NCSA events. Also seminar chair James Upton was called away on day one due to an emergency back home, but Cheryl Hudson, Florence Black, Marsha Wheeler and Gale Champie stepped in to assist with keeping things running smoothly. Mary Fuller fell and was hurt after day one and was not able to come back the second day, hopefully Mary is on the mend. Thanks to NCSA President Margie Strider for planning this seminar; lots of great information was shared, and now we all know that we need to increase our fees to save for our own retirement!

Thanks to each of the NCSA members who attended: Peggy Bartsch, Florence Black, John Blanton, Paul Bum- garner, Gale Champie, Susan Corliss Bland, Jense Creighton, Richard Davis, Nona Fisher, Wayne Frank, Mary Fuller, Lynanne Gray, Larry Grossman, Dean Gunter, Denise Hammond, Cheryl Hudson, Marie Izzo, Curt Lee, E.L. Lemonds, Pamela Lowrie, Ruth McClellan, John McKinney, Sarah McKoy, Julie McNeill, Stephen Metelits, Lottie Neal, Carole Owenby, Joyce Padmos, Wayne Parker, Rena Pilkenton, Yvonne Potter, Ron Powell, Kevin Robinson, David Rollins, Marjorie Scott, Margie Strider, Catherine Thomas, James Upton, and Marsha Wheeler. Without member support our events cannot be successful, thanks to all of you for supporting NCSA!