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

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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  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

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