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The Democratic and Republican nominating conventions triggered an early recess for Congress. Lawmakers left Capitol Hill in mid-July and are not scheduled to return until September. Before recessing, the House voted to undo part of the Affordable Care Act (ACA) and approved a reduced budget for the IRS. Leading tax writers in the Senate addressed tax-related identity theft and home buying incentives.


The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) accelerated the due date for filing Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements, and any returns or statements required by the IRS to report nonemployee compensation to January 31. The change is scheduled to take effect for returns and statements required to be filed in 2017. At this time, many employers and payroll providers are reprogramming their systems for the accelerated due date.


IRS Chief Counsel recently examined the tax treatment of crowdfunding activities in a new information letter (Information Letter 2016-36). Crowdfunding is a relatively recent phenomenon, used by an individual or entity to raise funds through small individual contributions from a large number of people. The guidance notes that the income tax consequences to a taxpayer of a crowdfunding effort depend on all the facts and circumstances surrounding that effort.


A professional employer organization (PEO) is an organization that enters into an agreement with a client to perform, among other tasks, the federal employment tax withholding, reporting, and payment functions related to workers performing services for the client. Effective for wages for services performed on or after January 1, 2016, a certified professional employer organization (CPEO) may be treated, for purposes of employment tax liability, as the sole employer of a worksite employee performing services for a customer of the CPEO for remuneration the CPEO paid to the employee. To become a CPEO, a person must apply with the IRS for CPEO treatment and be certified by the IRS as meeting certain requirements. The IRS began accepting applications for CPEO certification in July 2016.


An employee or self-employed individual is allowed a deduction for the costs of meals and incidental expenses while traveling away from home for business purposes. The deduction of these costs usually requires the substantiation of the costs. However, there is an optional method provided for these taxpayers that avoids keeping receipts.


As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of August 2016.


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