Thursday, February 25, 2016
Posted by: Ann Lupo
LDR has requested help disseminating 2012 Notice information:
The Department of Revenue began a new initiative in January 2016, where data received from the IRS was compared against data reported on the state individual income tax return. The data fields that are compared include federal adjusted gross income, federal deductions, filing status, and federal income tax.
An issue with the Foreign Tax Credit (FIT) deduction was created due to the manner in which the IRS data is obtained and how the FIT may be claimed on the state return. We are looking at options going forward that would possibly relieve some of these problems. This issue will exist for any credit that reduces the federal income tax at the federal level, but which is allowed by state statute to be included in the federal income tax deduction.
For the 2012 tax year, practitioners may simply provide LDR with a list of their clients who received notices where it appears the federal income tax was reduced by the Foreign Tax Credit in error. LDR will review and adjust any returns where the federal income tax credit was reduced in error due to this issue.
This could also include notices that reduced the FIT by Katrina Disaster Credits or any other modification provided by statute to the FIT deduction.
The list can be sent to Barbara Reeves (Barbara.email@example.com), and she will forward to the Audit Intelligence Division for correction. It will not be necessary for your client to obtain a federal account transcript.
Please provide the account number #nnnnnnnnnn-600 or the letter ID on the notice if possible.
eFiling State Corporate Returns Based on the February 22, 2016 LCPA communications with LDR, the Department expects vendor approvals for eFiling State Corporate Returns to start going out this week.
Citizens Declaration Page A copy of the Citizens Declaration Page is now required for all returns.
Questions about the content of this Alert should be directed to Linda Babin.
So far every client of mine who amended their 2012 return is getting notices from LDR not recognizing the federal income tax paid with the amended federal return on the amended LA return. Other clients are getting notices of tax due without any indication as to what for. This is unfair of the LDR to do this during tax season and every notice so far has been incorrect on the part of LDR.