Here’s a quick review of recent IRS activity.
New IRS form required. Businesses that handle certain money
transactions must now use a new form to report these
transactions.
Here’s a quick review of recent IRS activity.
New IRS form required. Businesses that handle certain money transactions must now use a new form to report these transactions.
The change recently announced by the IRS will affect more than 200,000 “money service businesses.”
If your business issues or redeems money orders or traveler’s checks or transmits money, you are required to use the new form to report suspicious transactions that involve $2,000 or more. The new form, TDF 90-22.56, is to be used to report these suspicious transactions to the IRS.
Liquor stores, convenience stores, grocery stores, service stations and drug stores are typical of the businesses that handle such money transactions.
The new forms are available by calling 800-829-676, or they can be downloaded from the IRS Web site at www.irs.gov.
– Daycare meal deductions standardized. If you provide daycare services in your home, your recordkeeping burden has just been reduced by the IRS. New IRS rules will let you use a standard rate for deducting the cost of meals served to the children in your care.
You must, however, still keep a record of the names of children cared for, dates and hours of attendance and the meals and snacks served.
The standard rates are 98 cents for breakfast, $1.80 for lunch or dinner, and 53 cents for snacks if you’re located in the continental United States. In Alaska, the rates are $1.55, $2.93, and 87 cents respectively. In Hawaii, the rates are $1.13, $2.11, and 63 cents.
– K-1 matching program underway again. In 2002, the Internal Revenue Service started a program to match Schedule K-1 information to amounts reported on individual tax returns.
Schedule K-1 is an IRS form that is used to report a taxpayer’s share of income, deductions and credits from partnerships, S corporations, and trusts.
The 2002 program suffered major problems, with thousands of erroneous notices being sent to taxpayers. Recently the IRS announced that the program has been fixed and the matching activity will resume. The IRS will issue notices related to tax returns for 2001.
Mary Hubbell is a partner with the accounting and consulting firm of Bianchi, Lorincz & Company located in downtown Hollister and Morgan Hill.
