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This Week in the iNews:

▲ MAY 15 DEADLINE FOR SMALL TAX EXEMPT ORGANIZATIONS TO FILE E-POSTCARDS

▲ADMINISTRATION PROPOSES TAX CUTS FOR MIDDLE CLASS FAMILIES AND SMALL BUSINESSES, CLOSING CORPORATE TAX LOOPHOLES

▲ WANT OR NEED A BUSINESS VALUATION IN 2009 – REASON 8 OF 9

▲ May 15 Deadline for Small Tax Exempt Organizations to File E-Postcards

The IRS has reminded small tax-exempt organizations that many of them must file their annual electronic information return by May 15. The requirement to file Form 990-N, also known as the e-Postcard, affects tax-exempt organizations with gross annual receipts of $25,000 or less. This is the second year of the new requirement.

Organizations whose tax year ends on December 31 have a May 15th filing deadline. Those with a different tax year must file by the 15th day of the fifth month after the close of the tax year. E-Postcards must be filed online; a paper version of the form is not available. An organization will automatically lose its tax-exempt status if it fails to file for three consecutive years.

▲ADMINISTRATION PROPOSES TAX CUTS FOR MIDDLE CLASS FAMILIES AND SMALL BUSINESSES, CLOSING CORPORATE TAX LOOPHOLES

As part of the Administration's effort to develop a budget that invests in our nation's future, the U.S. Treasury Department today released explanations of the Administration's Fiscal Year 2010 Revenue Proposals to provide details of plans to cut taxes for small businesses and middle class families and close unfair corporate tax loopholes. The plan includes $736 billion in tax cuts for working families over the next ten years and provides almost $100 billion in tax cuts for businesses.

The plan also promotes fairness and fiscal responsibility by closing hundreds of billions in loopholes, including $36 billion in tax breaks for oil companies and the $86.5 billion loophole which allows U.S. companies that invest overseas to shift income to tax havens.

Cutting Taxes for Middle Class Families

The Administration's Budget proposes $736 billion in tax cuts for individuals and families. It follows through on a key commitment by increasing and extending the Making Work Pay Credit to provide tax cuts for 95 percent of working families, saving a typical couple $800 per year.

The Budget also provides a much needed boost to Americans' retirement savings. The budget proposes to significantly expand the existing Saver's Credit for Americans (SCA) who work. The new credit will match 50 percent of the first $1,000 of savings for the typical family and will be refundable to ensure that even low-income workers have the chance to save for the future. The Budget also includes plans to set-up automatic enrollment in IRA's so every family can participate in retirement saving plans.

In addition, the Budget makes permanent the American Opportunity Tax Credit, worth up to $2,500 per year for up to 4 years, so everyone who gets into college can afford to attend college. Together these tax cuts could save a middle-class family with a child in college $4,300 per year.

Cutting Taxes for Small Business

The Budget provides $99 billion in tax cuts for businesses -- this does not account for the Making Work Pay Credit which already provides an additional tax cut to the vast majority of small business owners. The Budget cuts taxes for small businesses by:

Making permanent the Research and Experimentation Credit to reward businesses that invest in U.S. competitiveness;
Eliminating the capital gains tax on investments in small business stock, thereby helping small businesses attract much-needed capital; and Expanding the Net Operating Loss Carryback provision, providing businesses with an immediate boost to their bottom line to help them through the current economic crisis.

Tax Preferences Repealed for Oil Companies, Overseas Investment

The Budget proposes to close dozens of unfair loopholes that cost hundreds of billions of dollars, including measures to raise:

$36 billion by rolling back tax breaks for oil companies, including special credits that subsidize oil exploration and drilling;
$86.5 billion by closing the "check-the-box" loophole, which gives companies that invest overseas the ability to make their foreign subsidiaries "disappear" for tax purposes -- enabling them to shift profits to tax havens and giving them a leg-up on firms that invest in the United States;
More than $103 billion by ending tax preferences for international investments, including the rule that allows firms to take an immediate deduction for their overseas investment expenses while delaying paying taxes on overseas income and the rules that allow firms to claim excessive tax credits for their overseas investments; and

$58 billion to support the Health Reform Reserve Fund by closing domestic tax loopholes and increasing domestic compliance. This includes targeting valuation games played by

those facing estate and gift taxes that allow them to undervalue transferred property, denying a tax deduction for bad-actor firms hit with punitive damage claims and repealing preferential tax treatment for commodities dealers

▲ WANT OR NEED A BUSINESS VALUATION IN 2009 -REASON 8 OF 9

Commercial or Project Financing

Increasingly local banks and lenders will request an independent market valuation prior to approving a small business loan or credit line. A business valuation is an instrumental tool to include in a loan package when approaching lenders to negotiate your rate and loan terms.

If you are planning for or find yourself in this type of situation, please contact Les Prangley, CPA, CVA to see if a business valuation is needed or required at 616.774.9004 or lprangley@pmcpa.com