IN THIS EDITION: IRS guidance on UBIT refunds requested by legislators … Gov. McMaster’s executive budget calls for $430M in tax relief and more tax rebates … How to file online and choose direct deposit when individual income tax season opens Jan. 27 … BMW’s Plant Spartanburg sets record for X Model production … Know of someone cheating on taxes? IRS requests details from whistleblowers

IRS Guidance on UBIT Refunds Requested by Legislators

House Ways and Means Committee Chairman Richard Neal (D-MA) and Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) wrote a letter to the IRS on Jan. 8 that requested guidance on how tax-exempt organizations can claim refunds for the now-repealed Unrelated Business Income Tax (UBIT) provision from the Tax Cuts and Jobs Act. That 2017 tax law initially required nonprofit groups to pay a 21% UBIT on the value of employee benefits for parking and transportation, and it was met in opposition by a two-year grassroots campaign by the American Society of Association Executives and its UBIT Coalition. As part of a year-end government spending bill in December, Congress repealed the tax retroactive for taxes paid or accrued by nonprofits after Dec. 31, 2017.  (Associations Now)

Gov. McMaster’s Executive Budget Calls for $430M in Tax Relief, More Tax Rebates

Gov. Henry McMaster unveiled a budget proposal for legislative approval that includes nearly $430 million in tax relief, along with another round of rebate payouts for South Carolina taxpayers. The state’s projected $10 billion 2020-21 budget that would take effect July 1 includes $1.8 billion in new revenue from the previous year, and McMaster is requesting a cut to state income tax rates that would reduce revenue by $161 million initially and by $860 million annually at the 2025 end of his plan. McMaster said that marking $250 million for rebates means taxpayers can “spend it, invest it, save it, whatever they want to do. That’s a way of priming this pump to keep the economy going.” The rebate would be based on what a household has paid in income taxes, and the governor’s office calculates the minimum rebate would be $50 around 410,000 taxpayers while the average household rebate would be $204. Last year, state taxes from a winning $1.5 billion Mega Millions ticket bought in the Upstate funded a Legislature-approved $67 million rebate where taxpaying households were mailed a $50 check by December. The governor’s budget requests are considered recommendations to S.C. House and Senate budget-writers, but the General Assembly has final approval. Leading members there have indicated that all the new surplus will be directed toward funding state needs. (Post and Courier)

How to File Online and Choose Direct Deposit when Individual Income Tax Season Opens Jan. 27

The South Carolina Department of Revenue and the IRS will begin accepting Individual Income Tax returns on Monday, Jan. 27. To ensure faster and more accurate processing of returns and refunds, the SCDOR encourages taxpayers to file electronically and choose direct deposit. Last year, when the SCDOR issued 1.6 million refunds totaling nearly $1.67 billion, 90% of Individual Income Tax returns were filed electronically. (SCDOR)

BMW’s Plant Spartanburg Sets Record for X Model Production

BMW Manufacturing set a production record at its Spartanburg facility by building 411,620 X models in 2019 to top 2016’s mark by 449. In Plant Spartanburg’s 25th year of production, the X5 led the way with 161,096 vehicles, followed by 115,088 X3s. BMW North America says Plant Spartanburg is the world’s largest BMW plant by volume and that 2019 was the third year the plant surpassed the 400,000 models. “The past three years have been among the most challenging in the history of Plant Spartanburg,” Knudt Flor, president and CEO of BMW Manufacturing, said in a news release. “I’m proud of the commitment by our team.” (GSA Business Report)

Know of Someone Cheating on Taxes? IRS Requests Details from Whistleblowers

According to a 2018 IRS survey, 85% of Americans say it is unacceptable to cheat on taxes and 90% said cheaters should be held accountable. If you suspect or know of an individual or business that is falsifying exemptions, deductions or not reporting income, you can file IRS Form 3949-A. A whistleblower can choose to write the IRS a letter that will be held confidential, but the IRS prefers that the form be used. “Unfortunately, many of the tips we receive are not that useful,” IRS spokesman Eric Smith said. “But good information from people in the know really can make a difference. That’s why it’s so worthwhile that anyone submitting an informant report be as specific and complete as possible.” (Washington Post)

WHAT THEY’RE SAYING

“We proudly supported repeal on this tax, which was unfair to charitable organizations and diverted money away from the good work that these organizations do.”

House Ways and Means Committee Chairman Richard Neal and Ways and Means Oversight Subcommittee Chairman John Lewis in a letter to the IRS that calls for guidance on how tax-exempt organizations can request refunds for what they paid on fringe benefits for parking and transportation under a now-repealed Unrelated Business Income Tax provision of the 2017 tax law.