Transit Benefit Program Now Mandatory in NYC
New York City has passed an ordinance requiring that companies with 20 or more full-time employees who work in the City offer a pretax transit benefit program to their NYC employees by January 1, 2016. The ordinance covers all five boroughs.
The transit benefit program encompasses all public transit including bus, train, subway, ferry service, and van pooling. Businesses that are not yet compliant will be able to save on payroll taxes by offering these commuter benefits.
2016 Social Security Wage Base Stays at $118,500
Low inflation, due largely to weak oil prices, has led the Social Security Administration to keep the top threshold for taxable wages under Social Security at $118,500 for 2016. There will be no cost-of-living adjustment for 2016 because the third-quarter 2015 consumer price index (CPI-W) didn't increase, when compared with the same period in 2014.
Employer-Sponsored Retirement Plans under Increased IRS Scrutiny
For 2016, the Employee Plans Team Audit (EPTA) division of the IRS is stepping up reviews of internal compliance controls for large plans - those with at least 2,500 participants. But it is not stopping at larger plans. Also targeted for review are tax-exempt 403(b) and 457(b) plans as well as collectively bargained multiemployer plans.
This initiative is in response to a perceived pattern of noncompliance and will target those the EPTA determines have the greatest potential for noncompliance. Typically, the EPTA conducts about 100 audits per year and it is not known if that number will increase. EPTA audits differ from other IRS plan audits. An EPTA audit limits its original review to internal plan compliance controls to determine if a further audit is then required.
IRS Teams with Foreign Tax Administrations to Uncover Tax Evasion
In its ongoing initiative to uncover offshore tax evasion by US taxpayers, the IRS has announced the exchange of financial account information with foreign tax administrations. This exchange is part of an overall effort to implement the Foreign Account Tax Compliance Act (FATCA).
Generally, FATCA requires withholding on certain payments made to foreign financial institutions (FFIs), unless the FFIs agree to report to the IRS information about financial accounts held by US taxpayers, or by foreign entities where the US taxpayers hold a substantial ownership interest.
Now, with the information exchange, the IRS will have the assistance of its counterparts in other countries. To achieve this, the IRS developed an information system infrastructure, procedures, and data use and confidentiality safeguards to protect taxpayer data. The system facilitates the reciprocal and automatic exchange of tax information with selected foreign jurisdiction tax administrators under the intergovernmental agreements (IGAs) implementing FATCA.
The Service will only perform reciprocal exchanges with foreign jurisdictions that meet stringent safeguard, privacy, and technical standards.
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