News & Tax Alerts: Tax Alerts – State

State Tax Issues

Monday, March 17, 2014   (0 Comments)
This alert includes updates on the following tax filing issues – see below for more information
  • Meetings with LDR/Louisiana Tax Issues
  • Refund Status Checks
  • E-File Authorizations
  • Identity Theft Verification
  • Mailing Address Formatting
  • Inventory Credits
  • Joint Returns with Refund Due to Deceased Taxpayer
Louisiana Tax Issues
We have started our regular filing season conference calls with the Louisiana Department of Revenue (LDR) to bring to their attention our concerns and to find out the important things happening which affect the returns you are filing on behalf of your clients.

E-File Authorizations
We have received calls from members indicating confusion on when the federal Form 8879 is accepted for both federal and Louisiana returns and when a Louisiana Form 8453 is required.

Please refer to the LDR's FAQs, which state:

The tax preparer should retain the IRS e-file Signature Authorization, Form 8879, which will be accepted as the taxpayer’s state signature document as well. The forms must be retained for three years from the return due date or the IRS received date, whichever is later. The forms may be retained electronically in accordance with the recordkeeping guidelines in Rev. Proc. 97-22.

If the tax preparer is filing a Louisiana state only return or a Louisiana state amended return for a taxpayer, the tax preparer must maintain the LA Tax Declaration for Electronic Filing Form R-8453, for three years from the return due date or the Department of Revenue received date, whichever is later.

This is the same policy that was in effect last year and should be familiar.

Mailing Addresses

LDR has indicated they verify the addresses indicated on returns with the US Postal Service. It is important to match the address format with the USPS format. Any discrepancy will cause a return to suspend and delay the processing of the return. Examples are leaving off the word "Apt.” or "Lot” number, misspelling of a street name, and City and State on the same line as the street address.

We recommend updating addresses for individual accounts on the LDR website.

Joint Return with Refund Due to Deceased Taxpayer
When filing a joint return that includes a deceased taxpayer, the primary taxpayer name should remain the same as the previous year. A copy of the death certificate should be sent with the return. If a refund is due, include Form R-6642, Statement of Claimant to Refund Due on Behalf of Deceased Taxpayer.

Refund Status
LDR has requested practitioners and taxpayers wait 21 days after filing to check on the status of refunds due on returns.

Identity Theft Verification
LDR has indicated it will use the same method as last year of verifying returns that are suspected of identity theft. This involved an identity theft quiz or other procedure to verify the taxpayer’s identity.

Inventory Credits
Inventory credits earned by a partnership will flow through to the resident partners and should be reported on the resident partner’s individual income tax return. The credits that flow through to non-resident partners should be claimed on the Partnership Composite return.