New Jersey
New Jersey Chapter of NATP
Chapter PresidentColette A G Taylor EA
213 Clements Bridge Road
Barrington, NJ 08007
Phone: 856.546.7201
Fax: 856.546.4678
cagt@verizon.net
Chapter EducationMark your calendars with the following upcoming events: - December 11, 2008-Keeping up with Circular 230- Hanover Marriott-Hanover, NJ 8:30-11:00 am - Click here for more information and to register.
- January 10, 2009- New Jersey Seminar- Woodbridge, NJ 8:00-5:00 pm
The 2008 NJ NATP Annual Meeting was held at the Woodbridge Hilton in Iselin on September 17-18, 2008. Click here for some pictures highlighting our meeting. The 2007 NJ NATP Annual Meeting was held at the Woodbridge Hilton in Iselin on September 20, 2007. Click here for some pictures highlighting our meeting.
Chapter AwardsNJ NATP chapter was honored at the 2008 NATP National Conference with the following awards... Congratulations to our president Colette Taylor for being honored as "2008 Chapter Person in Education" (pictured below). 
Congratulations to the New Jersey Chapter for winning... "Chapter of the Year - Education - 2008"
New Jersey Tax Preparer Bill Goes Into LawNJ AB 1698 requires tax preparers to follow certain guidelines of professional conduct during transactions with clients. Tax preparers must meet certain standards, including: promptly completing clients' tax returns, signing returns as the tax preparer, providing clients with copies of all documents requiring their signature, retaining certain files, maintaining confidentiality, not claiming credits or deductions for which clients do not qualify, and not accepting a fee based on a percentage of an anticipated refund. Enrolled agents and other Circular 230 practitioners are exempted from the requirements. The law was enacted on January 11.
NJ Minimum WageNJ minimum wage is $7.15/hour effective October 1, 2006.
NJ Sales and Use TaxRecently passed legislation increases the New Jersey sales and use tax rate from 6% to 7%. The rate change affects all retail sales of taxable merchandise or services that take place on and after July 15, 2006. SALES AND USE TAX RATE CHANGE
You must remit 7% sales and use tax on all taxable sales of property and services that occur on and after July 15, 2006. TRANSITION FROM 6% TO 7%
If you have any taxable sale transactions that began before July 15, 2006, and are completed on or after July 15, 2006, the following rules apply: Sales Made Before July 15, 2006; Delivery On And After July 15, 2006 - If the property was sold and delivered or services were rendered before July 15, 2006, the tax rate is 6%. If the property or services were sold but the property was not delivered or the services were not rendered until on or after July 15, 2006, or after, you must charge tax at the rate of 7%. This rule applies whether or not payment has been made in whole or in part prior to delivery. Contracts Entered Into Before July 15, 2006 - If you have entered into a written agreement with your customer for a product or service and have accepted a partial payment or deposit, you must still charge 7% sales and use tax. Your customer may apply to the Division of Taxation for a refund of the 1% under certain circumstances. Sales of Services - Unless the services were entirely rendered before July 15, 2006, you must charge 7% tax on the sale of the services. Receipts applicable to services prior to July 15, 2006, are taxable at 6%. However, if a service agreement is in effect prior to July 15, 2006 and covers billing periods ending after July 15, 2006, the seller shall collect 6% tax unless the billing period starts on or after July 15, 2006, in which case the seller must collect 7% tax. Room Occupancy - Periods of taxable occupancy on or after July 15, 2006, are subject to tax at 7%, regardless of any prior lease or other rental agreement. Periods of taxable occupancy prior to July 15, 2006, are taxable at 6%. Admission Charges - The tax on taxable admission charges on or after July 15, 2006, is 7%, even if the charges for the tickets were paid prior to July 15, 2006. However, if the tickets were actually delivered prior to July 15, 2006, and the tax of 6% was paid, there is no additional tax due. Building Materials - If taxable building materials are delivered on or after July 15, 2006, the sale of the materials is subject to tax at 7%. In certain circumstances (i.e. where the materials are for use in unalterable building contracts entered into before July 15, 2006), the contractor who has paid the tax may seek a refund of 1% from the Division of Taxation. A Claim for Refund (A-3730) is available under Sales Tax Forms. Leases and Rentals of tangible personal property - If an agreement for a period of more than six months is entered into prior to July 15, 2006, the tax is imposed at the rate of 6%. If an agreement for a period of more than six months is entered into on or after July 15, 2006, the tax is imposed at the rate of 7%. For agreements which are less than six months, the tax is imposed at the rate of 7% for all rental periods that begin on or after July 15, 2006. USE TAX
A 7% use tax is imposed on the use in this State of any taxable property or service on which New Jersey sales tax has not been paid. Credit may be allowed for taxes paid to other states. If you purchase taxable property or services on or after July 15, 2006, from a vendor who has not collected New Jersey sales tax, you are required to include the 7% use tax on your sales and use tax return (Form ST-50). ATLANTIC CITY BUSINESSES
This legislation also changed the combined rate for sales subject to both the New Jersey Sales and Use Tax and the Atlantic City Luxury Tax from 12% to 13%. The following rules apply to all sales made in Atlantic City on and after July 15, 2006. Sales that are subject to both taxes continue to be subject to the Atlantic City Luxury Tax at 9%. However, these sales are now subject to New Jersey Sales and Use Tax at the new rate of 4%. Sales subject only to New Jersey Sales and Use Tax are taxable at the new rate of 7%. Sales of alcoholic beverages by the drink in Atlantic City are taxable at the combined rate of 10% (3% Atlantic City Luxury Tax and 7% Sales and Use Tax). Sales of package goods are subject to Sales and Use Tax at the rate of 7%. The transition provisions outlined in the above also apply to sales made by Atlantic City vendors. However, for sales subject to both New Jersey Sales and Use Tax and Atlantic City Luxury Tax, the Sales and Use Tax rate increases from 3% to 4%. URBAN ENTERPRISE ZONE/SALEM COUNTYBUSINESSES
On and after July 15, 2006, sellers authorized to charge the 50% reduced rate are required to charge and collect sales tax at the rate of 3.5% on all qualified taxable sales. CAPE MAY COUNTY TOURISM BUSINESSES
On and after July 15, 2006, businesses in Wildwood, North Wildwood and Wildwood Crest which are subject to the Tourism Sales Tax will collect the 2% Tourism Tax and 7% Sales Tax, for a combined rate of tax of 9% on tourism-related sales (this is in addition to the 1.85% Tourism Assessment and the 3.15% State Occupancy Fee on hotel occupancies) NEW URBAN ENTERPRISE ZONE (UEZ) PROCEDURES
The UEZ law provides an exemption for certain sales made to a qualified business. The purchase exemption remains effective; however, procedural amendments to the law now require the sales tax to be collected on sales made to qualified businesses on and after July 15, 2006, unless the business is a "small qualified business"(annual gross receipts less than $1 million in the prior annual tax period.) In order to administer this procedure immediately, the Division has created a new temporary exemption certificate (Form UZ-5-SB).Sellers must obtain the temporary certificate from any business claiming the tax exemption at the point of sale. Sellers have 60 days after the date of the sale to obtain the UZ-5-SB from a small qualified business. For purposes of the point of sale exemption, sellers can no longer rely on the qualified business's prior exemption certificate (UZ-5). The UZ-5 exemption certificate is now only applicable to purchases made prior to July 15, 2006, regardless of the effective dates printed on the certificate. A qualified business that is not a "small qualified business" and therefore cannot issue the new UZ-5-SB must pay the sales tax at the point of sale, but may apply to the Division for a refund within one year of the sale. The new exemption certificate will be available on the Division's website under Forms/UEZ Forms. NEWLY TAXABLE GOODS AND SERVICES
On and after October 1, 2006, the 7% sales and use tax will apply to certain goods and services that were previously not subject to tax. The Division will post information on the website concerning these amendments to the Sales and Use Tax Act. Please review the website frequently for updates. For more information see the NJ website.
M-5008-R, Appointment of Taxpayer Representative, Replacing Power of Attorney FormThe Division of Taxation has introduced a new form for taxpayers who wish to designate a representative to act on their behalf. The new form, M-5008-R, Appointment of Taxpayer Representative, replaces the Power of Attorney Form (M-5008). Effective immediately, Form M-5008-R is to be used for all tax matters except for Property Administration matters. Click here.
Board of Directors and OfficersRegion I: Pramod Ahuja, EA, CFP
(609) 716-1300 Mario Tripaldi, EA
(551) 404-3453 Thomas R. DeTitta, CPA
(201) 943-4920 Region II: Sal Ferraro
(973) 838-3354 Jean Millerchip, EA, CFP
(973) 661-9611 Gwen Radloff, EA
(201) 438-5162 Region III: Marc S. Standig, CFP, EA, CMA
(609) 655-1313 Joyce Skerlanitz
(908) 709-4261 Barbara Fletcher
(908) 709-4261 Region IV: Julie Robinson
(732) 477-2281 Carl Linfante
(732) 229-4227 Marilyn H. Ayers, CPA
(732) 477-2281 Region V: Colette Taylor, EA
(856) 546-7201 Sherill F. Diamond, EA
(856) 779-1714 Jaimee Hammer
(856) 656-0508
SuggestionsWe want to know what you think.... If you have any suggestions about how to make NJ NATP work better for you, let us know... Email: njnatpsuggestions@comcast.net Please include NJNATP SUGGESTIONS in your subject line Thank you for your feedback!
IRS Information/WorkshopsIRS Stakeholder Liaison presents: IMRS Hot Issues September 2008 IMRS MONTHLY OVERVIEW August 2008
'Expired' E-Services Password (Issue 07-0000418 Update) – No need to wait for snail mail. If a tax practitioner's password has expired, they should - Logon to the system
- Respond to the prompt and enter their Adjusted Gross Income (AGI) for the current or previous year
- When asked, enter the PIN they created during their initial Registration process.
These last two steps are needed for compliance with our security requirements. Once the AGI and PIN have been validated, the tax practitioner will be required to change their password. Once the password has been changed, they are able to access the system. There is no longer a need to wait for a confirmation code letter via postal mail. However, if the practitioner has forgotten their password, the old process has to be followed. They will have to go through the "Forgotten Password" function and wait for a confirmation code via postal mail. This process became effective July 9, 2007.
Check the Box Authorization – IRS is looking into the possibility of extending the 12 months to two years. During a National Phone Forum on July 18, 2007, the Subject Matter Expert (SME) stated they will be looking at the feasibility with possibility of extending the check box authorization from 12 to 24 months. At this time, this issue is in the discussion phase with the Office of Disclosure and the Office of Chief Counsel. Watch e-News for Tax Professionals for updates.
Unnecessary Estimated Payment Vouchers (Issue 07-0000581) – We're trying to stop – honest. We're working as fast as we can to eliminate unnecessary mail-outs of ES vouchers. Unfortunately, we won't know if we caught them all until February of '08. If all goes well, there will only be one mailing to ES filers (no more quarterly mailings). Also, the following ES filers should not receive vouchers: 1. Returns with Paid Preparers
2. Software Prepared Returns
3. E-filed Returns
4. E-Pay returns Let us know next spring how we did.
What's the difference between Form 2678, Employer/Payer Appointment of Agent to request authorization by the IRS and Form 8655, Reporting Agent Authorization? Just writing the question is difficult. We hope to get an FAQ or matrix on IRS.gov or at least e-News for Tax Professionals to help. Generally, a Form 8655 agent acts for an employer, using the employer's – or client's – EIN to file separate returns for each client and pay the client's taxes. A Form 2678 agent acts as the employer, assuming joint liability with the employer for the employer's employment tax responsibilities and files aggregate returns using the agent's EIN.
NOTICE TO ALL NJ-NATP MEMBERS The New Jersey Chapter of NATP is a member of the "Internal Revenue Service Practitioner Liaison Committee of New Jersey". The committee is a joint partnership between the Internal Revenue Service and the tax practitioners to deal with "systemic issues" to implement the tax laws and to improve procedures. This is an opportunity for any member with a "systemic issue" that needs to be addressed. Please clearly state your issue and submit it to the attention of Willie Lau, 66 Old Bridge Drive, Howell, NJ 07731. It will be presented to the committee at the next meeting for review. If it is systemic in nature, the Internal Revenue Service will attempt to resolve the issue. Use the IRS website www.irs.gov for your Federal tax needs. Willie Lau
IRS Practitioner Liaison Committee Member
Employer Cash Incentives for Hybrids are Taxable
To encourage their employees to purchase environmentally-friendly hybrid cars, several companies reportedly are offering "rebates" or cash incentives to their employees in select areas to offset the purchase price of these vehicles. Just like other forms of compensation, these cash incentives are taxable compensation. http://www.irs.gov/newsroom/article/0,,id=160030,00.html
National Taxpayer Advocate Releases Report to Congress;
Identifies Priority Issues for Upcoming Year
National Taxpayer Advocate delivered a report to Congress that identifies the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year. http://www.irs.gov/newsroom/article/0,,id=159945,00.html
New Law Revamps IRS Offer in Compromise Program
Under a new federal law, taxpayers submitting new offers in compromise must make a 20 percent nonrefundable, up-front payment in many cases. http://www.irs.gov/newsroom/article/0,,id=159954,00.html
Temporary Procedures for Certain Expedited Ruling Requests
Because of the flooding and temporary closure of the main Internal Revenue Service headquarters building in Washington, D.C., a special procedure for processing requests for certain expedited letter rulings for reorganizations and section 355 distributions has been established. http://www.irs.gov/newsroom/article/0,,id=159941,00.html
IRS Renews E-mail Alert Following New Scams
Following a recent increase in scam e-mails, IRS reminds taxpayers to be on the lookout for bogus e-mails claiming to be from the tax agency. http://www.irs.gov/newsroom/article/0,,id=159925,00.html
Headliner #171, What Employers Should Know About Withholding Lock-in Letters from the IRS Under the new Withholding Compliance Program, the IRS no longer needs Form W-4, Employee's Withholding Allowance Certificate, before issuing a "lock-in letter". The Service is using information reported on Forms W-2, Wage and Tax Statement, to more effectively identify employees with withholding compliance problems. When serious underreporting is identified, the Service may issue a lock-in letter to the employer specifying the maximum number of withholding allowances permitted for the employee. http://www.irs.gov/businesses/small/article/0,,id=159856,00.html
Temporary Change of Address for Certain Hand-Delivered Documents Because of the temporary closure of the main IRS Headquarters Building, there is a temporary change of address for the delivery of taxpayer requests for rulings, requests for determination letters, Applications for Change in Accounting Method (Form 3115), and similar requests that are permitted to be hand-delivered to the main IRS Headquarters Building. http://www.irs.gov/newsroom/article/0,,id=159855,00.html
Tax Software FeedbackWe have prepared a list of the tax software vendors our New Jersey NATP members currently use. Click here to view a list of members you can contact to get their feedback on the tax software they use. There is also a list of those vendors who offer tax software with their phone, e-mail, and address for your convenience which can be found here. Please feel free to contact your fellow members to help you with any questions related to the software they are using. To add, change, or delete your name from this tax software volunteer list, contact gradlofftax@peoplepc.com. This is for NATP member use only. Hope this will make your tax season smooth and successful. | 
