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10% off SuppliesIn this issue:

  • October 31st is the deadline for special fall offers!
  • Tricky e-mails are no treat!
  • IRS Changes Stance on Home Equity Debt Interest
  • IRS Key Figures Change Little Due to Low Inflation
  • W2/1099, Corrector, and Forms Starter Kits Ship Soon

October 31st is the deadline for special fall offers!
Renew any CFS software title by October 31st and receive the 2009 version of W4 Calculator or Tax Corresponder, FREE!

W4 Calculator will help you calculate the correct number of W4 and DE 4 allowances for your clients. Tax Corresponder includes hundreds of time-saving, customizable tax correspondence templates. To receive one of these useful programs free, click here and renew online today!

Note: if you have already renewed early and want to take advantage of this offer, please contact us here.

October 31st is also the last day to save 10% on tax forms, tax return folders, envelopes, checks and labels. Click here to order tax forms and envelopes; click here to order other tax supplies. Our tax return supplies are competitively priced and come in a wide variety of styles and colors. Click here to request free samples!

You will also receive a 10% discount on custom folders ordered by October 31st. Specify window and pocket locations, or pick from one of our pre-configured designs. Choose from many rich colors and textures, with your firm information foil-stamped or embossed for a more professional look. Click here for pricing and ordering information.

Tricky e-mails are no treat!
Have you recently received an e-mail claiming to be from the IRS, with the subject line "Notice of Underreported Income?" If so, we hope that you did not open it. We have received many such e-mails here at CFS and, knowing that the IRS does not send unsolicited e-mails to taxpayers, have immediately deleted them.

Such e-mails—claiming to come from the IRS, UPS, Microsoft, your bank, or other reputable businesses—are generally used in "phishing" scams, with links to a web page asking for personal data which can be used for purposes of identity theft. Worse yet, they may contain malicious software that can be downloaded to your computer if you open the e-mail.

For more information, see the article Scam E-mail Sends Malicious Software to Recipients' Computers at

IRS Changes Stance on Home Equity Debt Interest
In a recent change, the IRS has revised their stance on the treatment of home acquisition debt as home equity debt. Home acquisition debt is defined as debt used to buy, build, or substantially improve a home or second home, and is limited to $1 million. Home mortgage debt that is not acquisition debt may be treated as home equity, subject to certain limitations. Home equity debt is limited to the smaller of $100,000 or the FMV of the home.

In a recent Chief Counsel Memorandum (200940030), the IRS states that acquisition debt is only the first $1 million of debt; any amount over that cannot be acquisition debt. Therefore, the taxpayer may treat any excess amount as home equity debt—even if it is from the same loan.

For example, a taxpayer incurs a loan of $1.5 million to acquire a personal residence. The taxpayer treats the first $1 million as acquisition debt and may treat the next $100,000 as home equity debt. This means the taxpayer may deduct the interest on $1.1 million of mortgage debt, even though this amount was from a single loan used to acquire the home.

This new position is contrary to two previous court cases: Pau, T.C Memo 1997-43, and Catalano, T.C. Memo 2000-82. In the memorandum, the Chief Counsel's office explains the logic behind the new position and seems to indicate that the position will be permanent.

Several TaxTools modules will be modified for 2010 consistent with the IRS's new position. In order to ensure that you remain abreast of all such changes, be sure to renew TaxTools and your other CFS software every year!

IRS Key Figures Change Little Due to Low Inflation
CFS TaxToolsThe IRS released its annual revenue procedure updating key figures that adjust for inflation each year (Rev. Proc. 2009-50). To no one's surprise, many of the amounts remained unchanged due to the low rate of inflation. Included in the revenue procedure were tax table brackets, amounts for the personal exemption, standard deduction, and phase-outs for various credits.

The IRS also released cost-of-living adjustments applicable to dollar limits on pension plans, which were also for the most part unchanged (IR-2009-94). Furthermore, the Social Security Administration announced that there will be no COLA increase to social security benefits and maximum earnings limits (SSA News Release).

CFS will be updating TaxTools 2010 with the new figures. Make sure you have the latest, most accurate tax projection software by renewing TaxTools now. And if you don't already own TaxTools, now is a great time to buy it. Order now, and you receive both 2009 and 2010 versions for the price of one year!
Click here to order, or for more information.

W2/1099, Corrector, and Forms Starter Kits Ship Soon
We will soon be shipping CDs and forms starter kits to Payroll System customers who are to receive them. If you are not sure whether or not you ordered your programs on CD, you can check your order online by logging in to your MyCFS account, here. If you did not order a CD (or don't want to wait for one), you can download the W2/1099 and Corrector programs now from our web site, here.

Note: If you have already purchased and installed 941/940 2009, you do not need a CD or a full program download to install either W2/1099 or Payroll Corrector. Simply select "Update from the Web" from the "Internet Options" menu of Payroll System 2009 or select "Software Updates" from the "Downloads" menu at to download and install from our web site. However, you must be sure to update your license code. We receive many calls from customers who are unable to access W2/1099 simply because they have not updated their license code. You can obtain your license code by logging in to your MyCFS account, here.

CFS Customer Service

2-for-1 Specials

TaxTools '09 & '10 . . . . . . . . . . $189

Quick Reference Guide '09 & '10 . . . . $39

CA 571 Preparer '09 & '10 . . . . . . . $99

MD Personal Property '09 & '10 . . . . $179

Financial Planning Tools '09 & '10 . . $550

And beginning November 1st:

CA Sales Tax Preparer '09 & '10. . . . $109

Tax Corresponder '09 & '10. . . . . . . $49

W4 Calculator '09 & '10 . . . . . . . . $89

Please contact us if you would like to discontinue this free monthly service.