The IRS has issued Notice 2012-58, which provides interim guidance on the Code Sec. 4980H shared responsibility payment for applicable large employers with employees who receive a premium tax credit or applicable payment under the Patient Protection and Affordable Care Act (PPACA). The shared responsibility payment requirement generally applies after 2013. The guidance sets forth some safe harbor methods applicable to seasonal employees and employees who work variable hours that may or may not average 30 hours.

The IRS has issued proposed regulations that clarify the "simplified methods" for determining inventory costs under the Code Sec. 263A uniform capitalization rules. In a significant change from prior guidance, the proposed regulations would prohibit the use of negative numbers for adjustments to inventory costs, unless particular exceptions apply. Among the exceptions is that the IRS will allow the use of negative amounts by companies using the simplified resale method and by certain small producers.

The IRS issued long-awaited proposed regulations on the limitations on net operating losses (NOL) for excess interest deductions. The limitations apply when a corporation engages in a corporate equity reduction transaction (CERT) that generates or increases an NOL because of an excess interest deduction. The provision prevents the excess NOL from being carried back over the normal carryback period and generating a refund.

A $104-million IRS whistleblower award has been paid to former Swiss Bank UBS AG employee Brad Birkenfeld. The award is purported to be the largest paid under the IRS whistleblower program. Information provided by Birkenfeld aided the IRS in uncovering tax fraud in offshore accounts, which has resulted in collection of $5 billion so far. The IRS Award Report stated, in part, "While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions."

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of October 2012.

The Tax Code provides that the IRS generally may not select an individual, partnership, or corporate tax return for audit after a period of three years has expired, dating from the tax return's filing date or due date, whichever is later. For example, if a taxpayer filed his 2011 Form 1040 on February 10, 2012, and the due date for the filing of returns that year was April 17, 2012, then the statute of limitations period ends on April 17, 2015, and not February 10, 2015. On the other hand, if the taxpayer filed his tax return late, on November 10, 2012, and had not obtained an extension of time to file, the statute of limitations period would run from November 10, 2012.

Whether or not the IRS will allow a deduction for year-end bonuses for services performed during that year depends not only on the timing of the payment, but also the events surrounding the payment. If your business is planning to provide year-end bonuses to employees, you may find the following tax tips useful in your planning.

Taxpayers recovering from the current economic downturn will get at least some relief in 2013 by way of the mandatory upward inflation-adjustments called for under the tax code, according to CCH, a Wolters Kluwer business. CCH has released estimated income ranges for each 2013 tax bracket as well as a growing number of other inflation-sensitive tax figures, such as the personal exemption and the standard deduction.

In 2013, a new and unique tax will take effect--a 3.8 percent "unearned income Medicare contribution" tax as part of the structure in place to pay for health care reform. The tax will be imposed on the "net investment income" (NII) of individuals, estates, and trusts that exceeds specified thresholds. The tax will generally fall on passive income, but will also apply generally to capital gains from the disposition of property.

Lawmakers have departed Washington to campaign before the November 6 elections and left undone is a long list of unfinished tax business. In many ways, the last quarter of 2012 is similar to 2010, when Congress and the White House waited until the eleventh hour to extend expiring tax cuts. Like 2010, a host of individual and business tax incentives are scheduled to expire. Unlike 2010, lawmakers are confronted with massive across-the-board spending cuts scheduled to take effect in 2013.