Need your attention please!

BE SURE you are current with all your state, county and city taxes because they are now all one!

State/Local Governments Form Partnership to Improve Compliance, Increase Revenue and Simplify Tax Process for Business Owners

NASHVILLE – This past legislative session, the 106th General Assembly enacted Public Chapter 530, shifting the administration and collection of business tax from local municipalities and counties to the Department of Revenue. With this change, the Department of Revenue will use its resources and experience in tax administration to collect the business tax, resulting in greater efficiency in the collection process and increased revenue for the State and for local governments.

"This undertaking is a true partnership between state and the local governments," said Commissioner Reagan Farr. "While increasing revenue through improved tax compliance, we also plan on simplifying the tax process for business owners including developing a new, simplified tax return and initiating major education programs."

Beginning with Classification 1 taxpayers, due Feb. 28, 2010, all business tax returns will now be filed with the Tennessee Department of Revenue. Businesses will continue to obtain business licenses from the county clerks and/or municipal officials.

The Department of Revenue is working closely with local municipalities and counties to make this transition a smooth process. The department is currently gathering registration data from the counties and cities to register the business owners and mail out tax returns by the end of 2009. More information is available at the Department of Revenue’s Web site www.TN.gov/revenue.

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2008-2009 fiscal year, the department collected $10.2 billion in state taxes and fees. In addition to collecting state taxes, $1.9 billion of local sales tax was collected by the department for local governments during the 2008-2009 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.TN.gov/revenue

Tax Q&A Time

This was a great question I think a lot of us will learn from:

I lost my job 12-31-08 with my income greatly reduced I fell behind on some loans auto and credit cards I was told by two different companies that my failure to pay these loans would result with them sending a 1099 to the irs as well as me indicating that loans were taxable income. can they legally do this and is it actually reportable income?

The answer is yes it is legal and no one tells anyone about this until they get the 1099.  When you are negotiating your reduction on your loans and credit cards you think great I have just paid off for less than I owed.  But, wham! now you owe taxes on the amount you did not pay and for someone that is already in financial straits this can put you over the top. 

Again this a good time to visit your tax planner before you make these choices to see how it is going to affect your entire financial picture.

You're never anonymous

This shouldn't come as much of a surprise but in case you live under a rock, the IRS is using social networking to catch tax evaders.  Thanks to some people's errant Facebook, MySpace and Twitter updates, the IRS has tracked down some tax evaders.
They're mining through posted information such as relocation announcements, professional profiles and financial gains.  Agents at the IRS have been able to collect all sorts of bucks from would-be tax dodgers.  One Nebraska agent was able to collect $2,000 from a disc jockey after he advertised on MySpace that he’d be working at a big public party.

"These new supplements are often far more efficient than the older ones, such as reading the local newspaper or making inquiries at barbershops and church meetings," said Jim Eads, director of the Federation of Tax Administrators. Another agent was able to collect $30,000 of unpaid taxes after a Google search lead him directly to his target.

So, if you’re the type of person that likes to boast about income that hasn’t been reported on Twitter or any status updates you have, think twice. The IRS could be, and probably is, watching.