Levine Katz Nannis and Solomon

1. Watch Out For These Twelve Tax Scams
2. Job Sharing - The Latest Benefit In the Workplace?
3. Excel Tip - Alternate Row Shading Using Conditional Formatting
4. IRS Announces Amnesty Plan on Tax Shelters
5. IRS To Simplify Accounting For Intangibles

Over the last few years, the workplace landscape has changed. New philosophies and new benefits make employment a whole new ballgame for professionals such as you. Flextime, telecommuting, on-site childcare…the list goes on of evolving on-the-job programs. The latest trend? Job Sharing. It's a relatively new idea that seems to be catching on quickly, especially among working parents and students.

The concept of job sharing, on a basic level, is simple: two people do the work of one. Two timesheets combine for 40 hours per week, two employees share responsibilities and (usually) a desk, two heads make for more ideas at the cost of one salary.

The execution of a program like Job Sharing, as has been with flextime and other new work concepts, can be tricky. Two employees with complimentary hours have to find some method to coordinate their efforts, communicate and be productive via email, notes and voicemail. Responsibilities of the position must be made clear, and projects have to be well defined for the "partners" to do the best job possible and avoid the overlap of work efforts.

Scheduling can also be an issue--if one person is off on Wednesday afternoons, they might always miss the weekly office meeting. This can usually be handled by choosing a one- or two-hour block of "overlap" time during the week, when both employees are in the office to discuss current projects and attend other office events.

Many employers agree that the benefits of a Job Sharing program, when involving the right type of people, outweigh the challenges. First and foremost, two heads are better than one. When two people are working on a project, there are twice as many ideas to be thought of, twice as many eyes editing a report, twice as many experiences contributing to the end success. Job Sharing also provides a way for working parents and students to hold professional positions part-time, and still have enough time for family and classes. A company can retain many new mothers or professionals going back to school by using a program such as this.

Job Sharing is the most recent model in what promises to be a long line of new work concepts to increase productivity, improve the work environment and make a job work for professionals like you. If you're interested in exploring this idea and others, bring it up with your employer, discuss it with colleagues and consider the benefits of this and other innovative job concepts to make your work environment a better place.

There is an easy way to make your data stand out for others to review. Excel's Conditional Formatting feature makes this a simple task.

Select the range that you want to format.

Choose Format, Conditional Formatting.

In the Conditional Formatting dialog box, select Formula Is from the drop-down list, and enter this formula:

=MOD(ROW(),2)=0

Click the Format button, select the Patterns tab, and specify a color for the shaded rows.

Click OK to return to your worksheet.

The best part is that the row shading is dynamic. You'll find that the row shading persists even if you insert or delete rows within the original range.

The Internal Revenue Service has announced an initiative that is aimed at encouraging taxpayers to disclose tax shelters and other questionable items reported on their tax returns.

The disclosure initiative is another in a series of steps the IRS and Treasury have been taking to identify and shut down tax shelter activity. The IRS is taking this step because information obtained through disclosures helps the IRS more readily identify tax shelter promoters who have not registered and find other taxpayers who have not disclosed their participation in a tax shelter.

The IRS hopes to encourage taxpayers to disclose tax shelters and other questionable items that may have resulted in an underpayment of tax by waiving certain accuracy-related penalties that might apply to the transactions. A taxpayer is not required to agree that the disclosed tax shelter or item resulted in an underpayment of taxes in order to avoid penalties.

"The IRS believes some taxpayers entered into questionable transactions based on the representations of promoters who marketed these tax shelters," said Larry Langdon, Commissioner, Large and Mid-Size Business Division.

"These taxpayers are aware that those transactions may be challenged upon an IRS audit, but they may be reluctant to disclose the transactions because of the potential for the application of penalties," Mr. Langdon said. "They now have additional incentive to bring any questionable transactions to the IRS’s attention."

Taxpayers who make disclosures must, among other things, describe the material facts of the transaction, provide the names and addresses of the promoters who solicited the taxpayers’ participation, provide upon request copies of materials and documents related to the transaction or item, and sign a penalties of perjury statement regarding the accuracy of the information provided. The IRS will waive the accuracy-related penalty for underpayment of taxes attributable to one or more of the following:

• negligence
• substantial understatement of income tax
• certain substantial valuation misstatements
• substantial overstatement of pension liabilities

The disclosure initiative will not apply to taxpayers involved in fraud, criminal conduct, the concealment of a foreign financial account or foreign trust, or the treatment of personal expenses as deductible business expenses.

Disclosure is critical to the IRS’s ability to use its resources efficiently and judiciously to administer the tax laws. As part of the disclosure initiative, the IRS will waive the accuracy-related penalty for any underpayment of tax if the taxpayer discloses the item before it is raised during an examination or before April 23, 2002, whichever is earlier.

In addition to the disclosure initiative, the IRS is providing additional internal guidelines to employees for the consideration of accuracy-related penalties for potentially abusive tax shelters. "Together with the disclosure initiative, these penalty guidelines create a compliance incentive by making clear the situations where we will consider the assertion of penalties already available to us," said Mr. Langdon.

The IRS encourages taxpayers who have reported questionable items on their tax returns to come forward. Disclosure creates no inference that the taxpayer’s tax treatment of the item was improper or that the accuracy-related penalty would apply.

To make a disclosure, taxpayers should submit the disclosure information to their assigned IRS team manager or, if not under Examination, submit the information to:

IRS Office of Tax Shelter Analysis

LM:PFTG:OTSA

1111 Constitution Ave, NW

Tax practitioners are cheering the IRS plans to simplify the tax rules that apply to intangibles. In an advance notice of proposed rulemaking (REG-125638-01) released on January 17, 2002, the IRS announced its intent to propose new rules that would provide descriptions of the specific types of expenditures that must be capitalized, along with broad-based rules for exceptions.

The tentative list of expenditures that must be capitalized include those incurred in acquiring, creating or enhancing the following types of intangible assets or benefits:

• prepayments for services, such as insurance.
• amounts paid to an organization to obtain a membership or privilege from that organization, such as a stock trading privilege or admission to practice medicine at a hospital.
• amounts paid to obtain certain rights from a government agency, such as for a license to serve alcoholic beverages.
• amounts paid to obtain or modify contract rights, such as payments for leases, covenants not to compete, or supplier contracts.
• amounts paid to terminate certain contracts, such as an exclusive right to conduct business in a defined geographic area.

The exceptions will apply to expenditures below a certain dollar amount and those related to intangible assets or benefits of relatively short duration (less than one year).

Employees Who Work for Tips. If you received $20 or more in tips during January, report them to your employer. You can use Form 4070.

Nonpayroll Taxes. File Form 945 to report income tax withheld for 2001 on all nonpayroll items. This due date applies only if you deposited the tax for the year in full and on time.

Social Security, Medicare, and Withheld Income Tax. File Form 941 for the fourth quarter of 2001. This due date applies only if you deposited the tax for the quarter in full and on time.

Individuals. If you claimed exemption from income tax withholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 by this date to continue your exemption for another year.

Social Security, Medicare, and Withheld Income Tax. If the monthly deposit rule applies, deposit the tax for payments in January.

Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in January.

In the wake of the September 11 terrorist attacks, the IRS has authorized additional relief measures for taxpayers who are adversely affected by the attacks. Affected taxpayers include taxpayers whose records, computers, or other essential supporting services were lost or damaged, or whose essential personnel were injured or killed in the September 11 attacks.

New relief measures for affected taxpayers include:

Affected taxpayers who have already received an extended deadline between December 1, 2001 and January 31, 2002 for filing tax returns are now given until February 15, 2002, to file any extended tax returns.

Affected taxpayers facing a deadline during December 2001 for filing a Tax Court petition are given an additional 60 days to file their petition.

Partnerships qualifying as affected taxpayers may choose to file a paper Form 1065 instead of filing electronically without facing penalty. This relief is for partnership returns that have an original or extended due date on or after September 11, 2001, and on or before November 30, 2001.

Owners and beneficiaries of pass-through entities, such as partnerships, estates, trusts, and S-corporations, who, due to the effects of the attacks, do not receive K-1 forms in time to file their returns, may request extensions of time to file their returns. If the K-1 forms are not received by the extended due date, taxpayers may file returns using reasonable estimates and then amend their returns when the K-1 forms arrive. These taxpayers will not face late payment penalties should their tax be impacted negatively when the actual numbers from the K-1 forms are used.

Affected taxpayers involved in a non-taxable like-kind exchange and who are facing a deadline between September 11, 2001 and November 20, 2001, are allowed a 120-day postponement of time to perform the exchange.

IRS Commissioner Charles O. Rossotti said, "We want to give appropriate relief to those affected by this terrible tragedy. Tax professionals asked us to consider situations beyond those we originally addressed. We have done so and welcome their future suggestions for good tax administration."

IRS Notice 2001-68 and Revenue Procedure 2001-53 explain all of these relief measures in detail.

Taxpayers who qualify for these relief measures should write the words "Sept. 11, 2001 Terrorist Attack" in red on the top of their tax forms. These taxpayers are warned not to place this wording on the envelope in which the forms are mailed as this could cause a delay in processing the return.

All Employers. Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2001, but did not give you a new Form W-4 to continue the exemption this year.

All Businesses. File information returns (Form 1099) for certain payments you made during 2001. These payments are described under January 31. There are different forms for different types of payments. Use a separate Form 1096 to summarize and transmit the forms for each type of payment. See the 2001 Instructions for Forms 1099, 1098, 5498, and W-2G for information on what payments are covered, how much the payment must be before a return is required, what form to use, and extensions of time to file.

If you file Forms 1098, 1099, or W-2G electronically (not by magnetic media), your due date for filing them with the IRS will be extended to April 1. The due date for giving the recipient these forms will still be January 31.

Payers of Gambling Winnings. File Form 1096, Annual Summary and Transmittal of U.S. Information Returns, along with Copy A of all the Forms W-2G you issued for 2000. If you file Forms W-2G electronically (not by magnetic media), your due date for filing them with the IRS will be extended to April 1. The due date for giving the recipient these forms will still be January 31.

All Employers. File Form W-3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W-2 you issued for 2001.

If you file Forms W-2 electronically (not by magnetic media), your due date for filing them with the SSA will be extended to April 1. The due date for giving the recipient these forms will still be January 31.

Large Food and Beverage Establishment Employers. File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027-T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment