Cleveland Law Library Weblog

IRS Adopts Taxpayer Bill of Rights

The IRS has adopted a Taxpayer Bill of Rights which it says "groups the dozens of existing rights in the Internal Revenue Code into ten fundamental rights, and makes these rights more clear, more understandable, and more quickly available to taxpayers."  The rights include:

1) The right to be informed; 2) The right to quality service; 3) The right to pay no more than the correct amount of tax; 4) The right to challenge the IRS's position and be heard; 5) The right to appeal an IRS decision in an independent forum; 6) The right to finality; 7) The right to privacy; 8) The right to confidentiality; 9) The right to retain representation; and 10) The right to a fair and just tax system.

Click here for more information on the Bill of Rights and your rights in IRS processes.

Practical Probate Practice CLE Program Will Be Held at the Cleveland Law Library on Friday, November 16, 2012

On Friday, November 16, 2012, the Cleveland Law Library is sponsoring a probate CLE captioned Practical Probate Practice for the Local Practitioner. Because changes are likely coming very soon for estate taxation, William A. Duncan plans to update attendees on the most current legislative developments in this area. Utilizing practice scenarios he commonly encounters in Cuyahoga County’s Probate Court, Bradley Hull IV will then discuss probating estates ranging from a full administration to a release of assets.  Finally, Magistrate Charles T. Brown will explain all of the new changes that the Cuyahoga County Probate Court has implemented to streamline local probate practice, including Local Rule amendments and statutory changes. Those who are interested can find the registration form on our website or register in person on the 4th floor of the Law Library. The program is only $70 for members and will provide 2.5 hours of Ohio continuing legal education.

Today's Sales Tax Hike Will Make Shopping a Little More Expensive

Starting today, and for the next 20 years, residents of Cuyahoga County will pay more when they go shopping. Last month 2 of the 3 Cuyahoga County Commissioners voted to raise the sales tax $.25 on every $100 from 7.5 to 7.75 percent. According to the Plain Dealer, this hike will raise $42 million a year and cost the average wage earner $50.00 per year. Opponents have been unable to amass enough signatures for a referendum to put the issue on the March 2008 ballot.

Final Regs for 409A Deferral and Distribution of Nonqualified Deferred Comp Plans

The long awaited regulations concerning Internal Revenue Code 409A have been issued. See the regulations at TD 9321. 409A restricts deferral elections, distribution elections and distribution events under nonqualified deferred compensation plans.  If a plan is subject to Section 409A and does not meet the requirements, participants are taxed on their vested benefits, incur an additional 20% tax, and may incur interest charges.  The new regulations further define which plans are exempt from 409A and which are not. Plans must comply by December 31, 2007.  For more discussion, see 409A Regulations Are Here by Calfee, Halter and Griswold; Highlights of Recently Released Section 409A Regulations by Squires Sanders, April 2007,  Treasury, IRS Issue Final Regulations on Nonqualified Deferred Compensation, US Treasury Dept News Release, Apr. 10, 2007,

No Property Tax for Portion of Nonprofit's Building Used as Store

The Ohio Supreme Court held that the portion of building owned by a nonprofit, which is used as a store, is entitled to exemption from property taxes.  To be exempt from tax, the primary purpose of the entire property must be to fulfill a charitable function, and not to make a profit.  The amount of profit is not determinative of whether the nonprofit held the property with a view to a profit.  Girl Scouts-Great Trail Council v. Levin, 2007-Ohio-972:   Girl Scout Store Held Exempt from Property Tax, Ohio Supreme Court Summaries, Mar. 21, 2007. Also see Nonprofits Eyeing Case in Ohio High Court by Laren Weber, Toledo Blade, Dec. 26, 2006.   

Final Ohio Tax Reg on Nonresident Married Filing Jointly

The Ohio Dept. of Taxation released a final regulation, Ohio Admin. Code Section 5703-7-18.  This regulation addresses the situation where a married couple files jointly for federal income tax purposes, but for Ohio income tax purposes one spouse is a nonresident. This rule is now final and effective.  Ohio Dept. of Taxation Information Release IT 2006-04, "Personal Income Tax: Nonresident Married Filing Jointly".

Proposed Legislation Will Eliminate or Cut Ohio Estate Tax

HB 3, sponsored by Rep. Latta, and HB 4, sponsored by Rep. Wolpert,  are two competing bills in the Ohio House which will cut or eliminate Ohio estate tax.  A recent Plain Dealer article described the two bills as follows:

"A proposal from Rep. Bob Latta, R-Bowling Green, would eliminate the state's cut of the estate tax. Any local municipality wishing to continue receiving its share of the tax revenue would need voter approval to renew it. In addition, the proposal would exempt estates valued at or below $600,000 by 2010.

Republican Rep. Larry Wolpert of Columbus has a competing proposal. His bill would force the state to give its portion of the estate tax to local governments and also allow municipalities to decide whether they want to opt out of their defined share. He would also raise the threshold of liability to $362,000."

House Republicans Want to Cut or Eliminate Ohio Estate Tax by Matt Leingang, Associated Press, The Plain Dealer, Feb. 14, 2007. 

Tax Relief and Health Care Act of 2006

For a nice summary of the Tax Relief and Health Care Act of 2006, HR 6111, see Tax Relief and Health Care Act of 2006 by Thompson Hine Taxation Practice Group, Feb. 13, 2007.  The act extended for two years certain deductions, credits and other provisions which were previously only in effect until the end of 2005.  Tax credits regarding certain energy conservation measures have been extended from the end of 2007 to the end of 2008.  The act makes other changes, including changes to health savings account provisions. 

Article on new Ohio CAT Tax Rules and Information Releases

For a great article summarizing the CAT tax final rules and information releases issued since May, 2006 see Update on Ohio Commercial Activity Tax: Final Rules and Revised Information Releases by Charles M. Steines and Phyllis J. Shambough,  Vol. 14, No. 1, State Tax Return, Jones Day Publications, Jan. 2007. 

New CAT Tax Final Rules

The Ohio Department of Taxation has issued new final rules for: Commercial Activities Tax Changes in Ownership, see Information Release CAT 2006-10 and Commercial Actitivities Tax Records Retention Requirements, see Information Release CAT 2006-09.  To view all recent Ohio Dept of Taxation Information Releases, go to: ODT Information Releases.