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CCH® PAYROLL — 03/17/10

Senate approves extender bill; few payroll provisions

The Senate on March 10 approved the American Workers, State, and Business Relief Act, HR 4213, that would extend through 2010 approximately $30 billion worth of expired tax provisions and increase unemployment and COBRA benefits. The measure now heads to the House where they may call for a conference to resolve differences between the bills. The House passed an extenders bill on Dec. 9, 2009.

Penalties

The bill would increase the first-tier information return penalty from $15 to $30, and increase the calendar year maximum from $75,000 to $250,000. The second-tier penalty would be increased from $30 to $60, and the calendar year maximum is increased from $150,000 to $500,000. The third-tier penalty would be increased from $50 to $100, and the calendar year maximum from $250,000 to $1,500,000. For small business filers, the calendar year maximum would be increased from $25,000 to $75,000 for the first-tier penalty, from $50,000 to $200,000 for the second-tier penalty, and from $100,000 to $500,000 for the third-tier penalty. The minimum penalty for each failure due to intentional disregard would be increased from $100 to $250. Every five years the penalty amounts will be adjusted to account for inflation. The provision would apply to information returns required to be filed on or after January 1, 2011.

Bad checks

The law would expand the bad check penalty to cover all commercially acceptable instruments of payment that are not duly paid, to instruments tendered after the date of enactment.

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