All posts by Nancy McClelland

IRS To Reject Tax Returns Next Year Without Health Coverage Info

Accounting Today, October 19, 2017 —

The Internal Revenue Service said that for the upcoming 2018 filing season, it‎ will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act, the first tax season it has refused to accept such returns.‎

In an update Friday to the web page of its ACA Information Center for Tax Professionals, the IRS said it will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment. On top of that, the IRS said tax returns filed on paper that don’t address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed.

Full article here: IRS won’t accept returns next year without health coverage | Accounting Today

Budget Cuts Cause IRS to Discontinue ‘Automated Substitute for Return’ Program

When a taxpayer who has a tax filing requirement fails to file a tax return, the IRS is allowed to use third-party information to determine a tax liability and assess it. The IRS handles these cases mostly through the ASFR Program, which enforces filing compliance against taxpayers who haven’t filed individual income tax returns but seem to owe a lot of money in taxes.

“The Automated Substitute for Return (AFSR) program is a component of our collection strategy to promote filing compliance,” wrote Mary Beth Murphy, commissioner of the IRS’s Small Business/Self-Employed Division, in response to the report. “Attempting to bring noncompliant taxpayers into compliance ensures fairness and reduces the burden on taxpayers who fully pay their taxes on time. Resource constraints have forced us to make difficult decisions with respect to some of our programs, even those that provide clear benefits to tax administration. Because a nonfiler strategy is important to our mission, we are currently working to develop one that fits within the current and future IRS operating environment, requiring fewer human resources, while providing an opportunity for us to achieve our desired outcomes.”

Full story here: IRS scales back program to go after people who don’t file taxes | Accounting Today

IRS California Wildfires Tax Relief

I feel like almost all of my posts over the past few months have been regarding IRS disaster relief. Here’s one more, from today’s IRS E-News for Tax Professionals.

Victims of wildfires ravaging parts of California now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

This includes an additional filing extension for taxpayers with valid extensions that run out this coming Monday, Oct. 16.

Currently, the IRS is providing relief to seven California counties: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. Individuals and businesses in these localities, as well as firefighters and relief workers who live elsewhere, qualify for the extension. The agency will continue to closely monitor this disaster and may provide other relief to these and other affected localities.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 8, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes originally due during this period.

This includes the Jan. 16, 2018 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected, including the Oct. 31 deadline for quarterly payroll and excise tax returns. Calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017 also qualify for the extra time.

In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due after Oct. 8 and before Oct. 23, if the deposits are made by Oct. 23, 2017. Details on available relief can be found on the disaster relief page on

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes firefighters and workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year) or the return for the prior year (2016). See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit

Source: IRS Gives Tax Relief to Victims of California Wildfires; Extension Filers Have Until Jan. 31 to File | Internal Revenue Service

Cook County Sweetened Beverage Tax Likely to be Repealed

A brief update — the Sweetened Beverage Tax ordinance for Cook County is likely to be repealed effective December 1st. Two commissioners who originally voted for it have changed their minds, and a newcomer to the Board supports repeal. This three-commissioner change would be veto-proof. More news soon.

(As a snarky aside, I don’t suppose they intend to reimburse all my small business clients who spent the time and effort to implement this tax — including some who paid thousands for add-on modules for their Point of Sale (POS) systems.)

Original blog post here —


Cook County soda tax to be repealed next week – Sun-Times

Cook County pop tax likely to be repealed next week as 3 more commissioners switch sides – Chicago Tribune

IRS Webinar: Understanding Tax Relief for Victims of Disasters

In today’s IRS e-News for Tax Professionals, the IRS announced a 2-hour webinar — held twice, once on Oct 18 and again on Oct 19 — geared toward helping taxpayers and their preparers understand various tax relief provisions in the code and administrative rulings.

Following the recent natural disasters in various parts of the U.S., this timely web conference will discuss:

  • Statutory Tax Relief for Casualty Victims (Both Individual & Business)
  • Special Rules for Federally Declared Disaster Areas
  • IRS Disaster Assistance Administrative Relief
  • Calculating and Reporting Disaster Area Losses
  • Involuntary Conversions resulting from Disaster Losses
  • Disaster Related Tax Issues: Harvey, Irma & Maria

A live question and answer session will round out the webinar.

Register and Attend:

Oct. 18 – 11:00 a.m. Eastern

Oct. 19 – 11:00 a.m. Eastern

Closed captioning is offered for the Oct. 19 web conference only.

Source: Understanding Tax Relief for Victims of Disasters

Small Business Requirements for the Affordable Care Act

Many small businesses are confused about their requirements under the Affordable Care Act (ACA), popularly known as “Obamacare”. The short answer is, if you have fewer than 50 “full-time equivalent” (FTE) employees, and you don’t offer a health insurance plan, all you have to do is make sure each employee gets a copy of this 2-page letter, written by the Department of Labor.

It’s super-easy — it’s just a template from the Department of Labor that informs employees that:

1) there’s this thing called the Marketplace online where they can buy health insurance;
2) they might be eligible for credits at the Marketplace;
3) if they receive health insurance from their employer, those credits may be reduced; and,
4) they are not currently eligible for health insurance through you as an employer.
The employer needs to fill out page 2 with their company info and double-side print it, making sure all employees get a copy, including each time they bring on someone new.

Kim Buckey, vice president of client services at DirectPath, a Birmingham, Ala.-based employee engagement and health care compliance firm, has noted the following:

“There is no fine or penalty under law for failing to provide the notice, so if an employer simply stopped providing the form, there would be little consequence.”

She explained that the notices are models provided for employers to use, but employers are free to provide the information in another format. Here is technical guidance that explains the content of the health insurance marketplace notice, in case employers want to write their own notice. “Many employers distribute their own version or a highly condensed version of the boilerplate, sometimes as part of an annual legal notices package or brochure.”

Employers, as I mentioned, are not required to offer health insurance to employees until they have 50 FTEs (good calculation worksheet here), but of course they can choose to offer it, voluntarily. There are some guidelines that are essential once an employer decides to do so, and additional information can be found at How the Affordable Care Act affects small businesses.

IRS – Hurricane Maria Puerto Rico Relief

The IRS has announced Tax Relief for Victims of Hurricane Maria in Puerto Rico, similar to the announcements previously made for Texas and Florida hurricane disasters.

From this week’s National Association of Tax Professionals e-newsletter:

The IRS is offering a recap of key tax relief provisions affecting taxpayers who suffered losses resulting from Hurricanes Harvey, Irma and Maria.

In general, the IRS is now providing relief to individuals and businesses anywhere in Florida, Georgia, Puerto Rico and the Virgin Islands, as well as parts of Texas. Because this relief postpones various tax deadlines, individuals and businesses will have until January 31, 2018, to file any returns and pay any taxes due. Those eligible for the extra time include:

  • Individual filers whose tax-filing extension runs out on October 16, 2017. Because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.
  • Business filers, such as calendar-year partnerships, whose extensions ran out on September 15, 2017.
  • Quarterly estimated tax payments due on September 15, 2017, and Jan. 16, 2018.
  • Quarterly payroll and excise tax returns due on October 31, 2017.
  • Calendar-year tax-exempt organizations whose 2016 extensions run out on November 15, 2017.

A variety of other returns, payments and tax-related actions also qualify for additional time. See the disaster relief page on for details on these and other relief provisions the IRS has offered since these hurricanes began hitting in August.

NSAC Cooperative Learning Network – Upcoming Webinars

The National Society of Accountants for Cooperatives offers some great online learning resources from time-to-time, and in today’s e-newsletter update, a few in particular were listed that caught my attention. In particular, George Benson and Teree Castanias are excellent, knowledgeable presenters, and Don Frederick — himself a legend in the co-op tax world — does a great job introducing the concept of co-op taxation.

Current Cooperative Tax Developments
Thursday, October 19, 2017
11:00 AM EST / 10:00 AM CST / 09:00 AM MST / 08:00 AM PST

George Benson, Attorney, McDermott Will & Emery, LLP
The program will include a review of Section 199 developments, including pending Court cases. If there is anything definite to discuss with respect to tax reform, it will address the potential impact on cooperatives and their members. In addition, the program will review areas where historically there has been controversy between the IRS and cooperatives and discuss their current status.


Book vs Tax vs Hybrid Basis of Paying Patronage
Tuesday, November 14, 2017
02:00 PM EST / 01:00 PM CST / 12:00 PM MST / 11:00 AM PST

Teresa (Teree) Castanias, CPA
A cooperative must return the profits of its patronage operation s to the member/patrons based on the business done with the cooperative for the year. But how that income is computed (book, tax or hybrid) will create very different results. How the cooperative addresses this issue can have important financial and member relations implications.


Basic Accounting & Auditing for Co-ops Seminar
Tuesday, December 12, 2017
11:00 AM EST / 10:00 AM CST / 09:00 AM MST / 08:00 AM PST

This 4-hour, 4-CPE credit course, is designed for new hires and other employees of cooperatives and firms serving cooperatives that can benefit from training in the unique nature of cooperatives.

Introduction to Cooperatives – Donald Frederick (11:00 am – 12:00 pm
During this presentation we explain the foundation for doing business on a cooperative basis, with special emphasis on the owner-customer role of a co-op’s members. We discuss the rich history of cooperatives in America, the many types of cooperatives in our communities, and conclude with an examination of the benefits of having businesses operate as cooperatives.

Equity Management & Inter-Cooperative Investments – Phil Miller (12:00 pm – 1:00 pm
The course discusses the various types of Cooperative Equity and introduces the concepts of Equity Redemption. It discusses the Components of Inter-Cooperative Investments and why Co-ops so often invest in each other. It covers Balance Sheet and Income Statement Presentation, Timing and Recognition issues, Footnote Disclosures, and Impairment Questions related specifically to Inter-Cooperative Investments.

Lunch (1:00 pm – 1:30 pm
The audio portion of the CLN will be suspended during this time.

Basic Cooperative Taxation – Donald Frederick (1:30 pm – 2:30 pm
During this session we discuss the unique Federal income tax treatment of cooperatives. We focus on how tax law supports equity accumulation by cooperatives, particularly the patronage refund. We conclude by providing a set of tools to facilitate tax planning by cooperatives and their professional advisers.

Co-op GAAP – Phil Miller (2:30 pm – 3:30 pm
The course discusses how all GAAP is applicable to co-ops, but also how some GAAP applies specifically to only co-ops. We will discuss the two single pieces of GAAP that form the basis for Co-op GAAP, plus one piece of GAAP that applies to electric co-ops. We will discuss how NSAC has contributed to the body of Co-op GAAP over the years and will finish with a discussion of the new FASB Codification and how Co-op GAAP is contained within the Codification.


The full list of online webinars can be found at the NSAC Cooperative Learning Network.

Troubleshooting: Is QuickBooks Online Down?

A common thread pops up on a few of the QB ProAdvisor groups when QBO is having issues and none of us can log in. Sometimes it happens to everyone, sometimes just to some of us, sometimes it’s an isolated incident. Knowing whether or not it’s happening to others can be handy in troubleshooting, so I wanted to share some default “what to do” advice —

  1. clear your cache and cookies — do this for each browser user you have (it’s common especially in Chrome to have multiple “users”);
  2. make sure not to use a bookmarked link to sign in, but rather type in the URL line;
  3. if it still doesn’t work, check out this link to see if others are reporting the same issues: Quickbooks Online down? Current problems and outages

Yesterday the system pretty much went down for everyone for the whole day, but clearing the cache and cookies and typing out the address got most folks back in… by 3 pm the engineers had resolved whatever was wrong and it looks like everyone’s going strong today.

NCBA Co-Op Professionals Conference, Oct 5-6 2017

For the past three years I’ve been honored to participate in planning the NCBA Co-op Professionals Conference — a get-together for attorneys, accountants, developers and other professionals that work with cooperatives. It’s an amazing opportunity to learn, network, and connect.

Please join us in examining “The Regulated Cooperative” at the 2017 Cooperative Professionals conference, October 5-6, 2017, in Alexandria, Virginia. The first day’s professional development program is devoted to the many ways in which federal regulation affects and controls cooperative enterprise, including regulation of financing, immigration, tax and labor. All four sessions have continuing professional education credit for CPAs and attorneys — the schedule is here (scroll down to Thursday & Friday — Wednesday is IMPACT- and Purchasing-only).

We are especially excited to present our luncheon speaker, Nathan Schneider, a thought leader in the new realm of Platform Cooperativism. He is Co-editor of the new book, Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet, which explores how the cooperative model can thrive in the Internet economy and inquires into the effects of antitrust enforcement, or its absence, in that highly consolidated landscape.

In the evening we will join the NCBA plenary session with mayors and city leaders who are taking different approaches to supporting the co-op ecosystem so that people can use cooperatives to create economic opportunity and address challenges within their cities.

On the second morning, we will be considering and framing a formal organization for this to-date informal grouping, a Cooperative Professionals Guild. After four years of successful conferences, is it time to create a permanent organizational home for planning the conference and other year-round professional development activities? In the spirit of cooperation, the ad hoc CPC planning committee invites you to participate in this effort.

This year’s conference is held in conjunction with Cooperative IMPACT convened by NCBA on October 4-6. We look forward to seeing you there!

Linda Phillips
Nancy McClelland
Thomas Beckett
Therese Tuttle
Sushil Jacob
Camille Kerr
Roland Hall
Elizabeth Van Der Wiede
Jason Wiener
Sara Stephens