1. A Global Reach with a Local Perspective
www.decosimo.com
2012 Tax Update
Chattanooga Chapter IMA
January 25, 2012
John E. Henegar, CPA, CMA

2. Agenda
 IRS update and initiatives
 2012 Compliance
 Form 8938, Foreign Financial Assets

3. IRS Update
 Audits, high wealth/S corporations
 Resources
 Voluntary Classification Settlement Program
 Open ended foreign bank account disclosure

4. VCSP
 Risk
 FIT 25%
 EE FICA 6.2%
 ER FICA 6.2%
 EE Med 1.45%
 ER Med 1.45%
 Total 40.3%
 Plus penalty

5. VCSP
 Where are your risks
 Project Workers
 Temporary Workers
 Former Workers now Consultants

6. Section 3509 Rates
 If 1099’s are filed a break on the rates
 1.5% FIT
 6.2% ER FICA
 0.84% EE FICA
 1.45% ER Med
 0.29% EE Med
 10.28% Total

7. VCSP
 If you self report, 10% of the section 3509 rates, no
penalty or interest
 To qualify:
 Filed all 1099’s for three years
 Not under exam
 Submit agreement via Form 8952
 Extend the statute of limitations

8. Foreign Bank Accounts
 $4.4 BILLION success story
 33,000 voluntary disclosures
 New penalty is 27.5% of highest aggregate balance
 File amended returns for up to 8 years
 Reduced rates can apply to specific situations

9. 2012 Compliance
 New question regarding filing of Forms 1099
 Separate line item in gross receipts for amounts
reported on Form 1099-K
 Standard mileage rates
 55.5 cents per mile business
 23 cents per mile medical and moving
 14 cents per mile charity

10. Foreign Financial Assets
 Form 8938 to be filed with 2011 tax returns
 Basically a US citizen or US resident must file if:
 Financial account in a foreign institution
 Foreign stock or security issued by non-US person
 Any interest in a foreign entity
 Any financial contract or instrument where the
counterparty is a non-US person

11. Foreign Financial Assets
 Unmarried > $50,000 12/31 or > $75,000 during the
year
 Married >$100,000 12/31 or > $150,000 during the
year