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Virginia Department of Taxation Presentation to the Virginia Tech Income Tax School 2007 PowerPoint Presentation
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Virginia Department of Taxation Presentation to the Virginia Tech Income Tax School 2007. Tax Professionals’ Hotline (804) 367-9286 www.tax.virginia.gov. Virginia Department of Taxation 2007 Legislative Update. Kim Jarvis Felecia Jones. Topics for Review. News you can use

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Virginia Department of Taxation Presentation to the Virginia Tech Income Tax School 2007


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    Presentation Transcript
    1. Virginia Department of Taxation Presentation to the Virginia Tech Income Tax School 2007 Tax Professionals’ Hotline (804) 367-9286 www.tax.virginia.gov

    2. Virginia Department of Taxation 2007 Legislative Update Kim Jarvis Felecia Jones

    3. Topics for Review • News you can use • Legislative updates • Changes to forms • Up and Coming • Hints • Tip and Tools

    4. Electronic Filing Thank you! This is Virginia’s first year to surpass 50% electronic filing. Almost seventy percent of the Virginia returns filed electronically were filed by tax preparers. The annual electronic filing increases reported below are a benefit to taxpayers and the Commonwealth alike.

    5. OUCH !!! • Increased direct deposits rejected-bad account numbers • Type too fast? • Deposit slips? • Last Year’s data? • Increased returned paper checks on ELF

    6. 2007 Refund Performance • 97.36% refunds processed within 12 days • 99.69% electronic refunds processed with 12 days • 93.5% paper refunds processed within 12 days

    7. LegislativeUpdates 2007

    8. Fixed Date Conformity • Date moved to December 31, 2006 • Resulted in changes to Itemized Deductions Worksheet • Updated worksheet on our website

    9. Subtraction for Death Benefits • 2006 – House Bill 1535 • Effective for taxable year 2007 • Applies to payments from annuity contracts included in FAGI

    10. Deduction for Certain S Corporation Income • Effective for taxable year 2007 • Applies to income received from S Corp subject to bank franchise tax

    11. Deduction for Sales Tax PaidEnergy Efficient Items • Effective for taxable year 2007 • Deduction = 20% of sales and use tax paid up to $500 p/tax year • Energy efficient equipment/appliances for home use – Virginia Code Section 58.1-322 (D)(12)

    12. Deduction for Organ / Tissue Donor Expenses • Effective for taxable year 2007 • Unreimbursed expenses up to $5,000 • Reduced by any amount deducted on federal return

    13. Agricultural Best Management Practices Credit • Provisions expanded for 2007 • Now includes owners of equine animals that create need for best practices.

    14. Neighborhood Assistance Credit • Credit reduced to 40% of donation • New provisions for donations to Schools for Students with Disabilities Funds • Virginia Department of Education administers and certifies credits

    15. Virginia Estate Tax • Repealed for date of death on or after July 1, 2007 • Website updated with detailed information • Does not affect fiduciary income tax

    16. Changes to Forms 2007

    17. Forms Changes • Subtractions and deductions separated • Two-digit Subtraction codes • Three-digit Deduction codes

    18. Forms Changes • Line 12 = Total deductions • Oval for Child Care on Handprint form

    19. Forms Changes OSC • ALL out-of-state credits must be claimed on OSC

    20. 2007Subtractions vs. Deductions • Subtraction = VAGI • Deduction = VTI • Categories corrected for 2007

    21. Up and Coming 2008 and Beyond

    22. Personal Exemption • Effective 2008 : $900 to $930

    23. Filing Threshold • Increase for all filing status • Phase-in 2008

    24. Taxable Year 2009 • Virginia College Savings Plan • Livable Home Tax Credit

    25. Withholding Tax – Monthly Filers • Due date changes, effective January 2008 • New due date is 25th day of following month for ALL months • Affects only monthly filers

    26. Withholding Tax - PTE • Effective for taxable year 2008 • PTE’s must withhold 5% for nonresident owners

    27. Sales Tax Holidays • Two new Holidays added

    28. Protective Claim Alert Davis v. Kentucky • Involves tax treatment of income from other municipalities • Virginia has similar provisions • U.S. Supreme court will hear case in 2008 • Could affect taxpayers who have added back income on other states’ obligations on their Virginia returns.

    29. Protective Claim Alert Address protective claims to: Virginia Department of Taxation Attention: Davis Protective Claims Post Office Box 760 Richmond, VA 23218-0760

    30. Protective Claims in General • Submit amended return with cover letter • Addressed to: • Tax Commissioner Post Office Box 2475 Richmond, VA 23219-2475

    31. Hints

    32. TOP 10 ERRORS FROM 2006 RETURNS • 1. Change indicators not filled in • 2. Social security numbers incorrect or missing • 3. Missing schedules • 4. Duplicate returns • 5. Payment discrepancies

    33. TOP 10 ERRORS FROM 2006 RETURNS • 6. Missing W-2s, or Schedule INC • 7. Incorrect amounts claimed for withholding • 8. No birth date • 9. Itemized deductions • 10. Codes omitted

    34. TAX has headaches too !!!

    35. Hotline and Website Services(Tips and Tools)

    36. Hotline Users • Commissioners of the Revenue • Directors of Finance • Treasurers • Professional Tax Preparers

    37. Hotline Telephone Number(804) 367-9286 • Direct Hotline Number • Calls Answered in Order Received • Wait Time Less than Regular Call Queue

    38. Hotline Call Volume • 2004 – 2006 Average calls Offered 11,556 • 2007 Average calls Offered 16,649 • Percentage Increase 44.07%

    39. Hotline Services Level • 2004-2006 Average Service Level 90.3% • 2007 Average Service Level 92.8%

    40. Hotline Service Level • 2004 – 2006 Average Calls Handled 10,435 • 2007 Average Calls Handled 15,445 • Percentage Increase 48.01%

    41. Hotline Staffing • 2004 – 2006 Average Staffing Level • 2 CRS • 1 Team Leader TAX ADDED STAFF AT PRACTIONER’S REQUEST • 2007 Average Staffing Level • 5 CRS • 1 Team Leader

    42. Hotline Benefits • Experienced Staff to Answer Questions • More Consistent Answers • Issues Easier to Identify • Escalation Procedure

    43. Hotline Requirements • Return Must be Notated as “Discuss with Preparer” • Or Tax Account must have Preparer as Power of Attorney (POA)

    44. Hotline Can • Research Account • Identify / Resolve Issues • Check on Status of Refunds / Mail • Help Navigate TAX Web Site • Assist with the Code of Virginia

    45. Hotline Cannot • Handle Offer in Compromise (OIC) over the telephone – Must be written request • Request Waiver of Penalty and Interest – Must be written request • Request Movement of money in Tax Account – Must be written request by Taxpayer

    46. Hotline Reminder • THE HOTLINE IS FOR YOU PLEASE USE IT

    47. Website Info

    48. Tax Professionals Page • What features are helpful ? • What features could be improved ? • What features could be added ? • Other Comments ? Password VA_TAX

    49. DO NOT: • SEND ACCOUNT INFORMTION VIA EMAIL • ESPECIALLY SSNs OR FEINs

    50. Website Redesign Project • Improve site navigation • Update and expand content • Initial implementation in January 2008