I win a U.S. Tax Court case in which a family child care provider’s 98% Time-Space Percentage is accepted.
I win a U.S. Tax Court case in which a family child care provider’s 93% Time-Space Percentage is accepted.
I helped lead the effort to reverse the policy of Jo-Ann Fabric and Craft Stores to exclude family child care providers from their Teacher Rewards program. This program only offered store discounts to K-12 teachers and home school teachers. After a provider complained about this on Jo-Ann’s Facebook page I wrote several blog posts about this and within two weeks Jo-Ann reversed its policy and now includes family child care providers in its Teacher Rewards program.
The IRS published a revised version of the Child Care Provider’s Audit Techniques Guide, an IRS publication that is used to train IRS auditors on how to audit family child care providers. The IRS invited me to give feedback on this publication and they incorporated many of my suggestions into this Guide. I’ve also written a commentary to this Guide.
For years providers have struggled to fill out the many tax forms involved when hiring an employee. In an effort to simplify this process I successfully lobbied the IRS to adopt a Form 944 Employer’s Annual Federal Tax Return. This form allows providers (and all tax payers) who pay less than $1,000 in federal payroll taxes in a year to file this annual form, rather than filing the quarterly Form 941.
I am awarded the 2007 Advocate of the Year Award from the Nebraska Family Child Care Association at its annual conference. I was cited for my work in changing IRS rules and assisting providers in IRS audits.
For many years I’ve advocated that the IRS simplify its rules for small employers by eliminating some of the many required payroll forms. In 2006 the IRS issued regulations that significantly reduced the paperwork for almost one million business owners, including many family child care providers. This rule allowed taxpayers who owe less than $1,000 in payroll taxes (or about $4,000 in total annual wages) to pay and file these taxes once at the end of the year using a new Form 944 Employer’s Annual Federal Tax Return, rather than having to pay payroll taxes quarterly using Form 941.
I won a US Tax court case that allowed a family child care provider to deduct medical expenses for her family as a business deduction under a medical reimbursement plan (IRS Code Section 105). The provider’s husband worked for her business without being paid any wages. This case has broad application to other businesses where spouses hire each other.
At it’s annual conference the National Association for Family Child Care recognized me for “25 years of dedicated service to the profession of family child care.” Chris Cross, NAFCC president, described how Tom began working in the field of family child care in 1981 where “he soon recognized that there was a serious lack of quality information on business issues for family child care providers, and he dedicated himself to meeting the needs of family child care providers across the country for accurate, understandable business and tax information.” Tom formed Redleaf National Institute, a division of Resources for Child Caring, “to ensure that all family child care providers have access to the necessary resources to master the basic business skills of their profession. Redleaf National Institute has now become the nation’s leading educator of and advocate for the business of family child care,” Cross stated.
Cross also read from some statements submitted by providers who were asked to share their thoughts on “what it has meant to them to have Tom Copeland as an advocate for our profession”:
“Tom is the best thing that ever happened to family child day care. Without his expertise in the field, providers would still be struggling to be recognized and respected by the IRS.” “Tom is the guru of family child care and not an ordinary one at that. He is exceptionally helpful and easy to approach. He graciously shares his vast knowledge in easy, concise ways that one can understand. He is kind and for sure the go-to-guy!”
An Iowa Food Program sponsor ruled that child care providers who hired helpers must include the income of the helper in the calculation to determine if she would be eligible for the higher Tier I Food Program reimbursement rate. This ruling prevented Valerie Owens from qualifying for the Tier I rate. I contacted the Iowa Department of Education and then the regional office of the Food Program on Valerie’s behalf. Eventually, the national office of the Food Program ruled that Valerie’s sponsor was in violation of Food Program regulations and the state of Iowa issued new regulations to allow providers to only include their own income when applying for Tier I status as long as they were self-employed. See article.
The IRS adopted my idea that family child care providers be allowed to use a standard meal allowance rate to claim their food expenses without the need to save any food receipts. The IRS estimated this would save providers approximately 10 million hours of record keeping each year.
The IRS office in Cleveland, Ohio published a Family Child Care Provider Guide after accepting numerous suggestions from me.
The IRS published the first version of the Child Care Provider’s Audit Techniques Guide. They incorporated several of my suggestions to clarify tax rules affecting providers.
I initiated the passage of a law in Minnesota that allows providers to claim the state child care tax credit if they are caring for their own child. This law has been used as a model in other states and has been estimated to save providers approximately one million dollars in taxes each year in Minnesota.
I launched a successful statewide campaign in Minnesota to pass a law making it easier for family child care providers to get homeowner’s insurance and has advised organizations in other states on how to pass similar laws.
At my urging the IRS clarified in IRS Publication 587 Business Use of Your Home that providers did not have to report reimbursements received from the Food Program for their own children as income.
I represented a provider in an IRS audit where the auditors took the position that providers were required to keep track of how many hours per day each room in their home was used for business purposes. This would have created a massive new record-keeping burden for providers. I launched a national campaign to reverse this IRS position. In 1992 the IRS issued IRS Ruling 92-3 that overturned this audit result saying that providers need only show that they used a room on a “regular” basis to claim the room as business use. The IRS has cited this Ruling in several other IRS publications.
I convinced the IRS to change its narrow interpretation of the business meal deduction that would have restricted providers to claiming only 80% of their food expenses.
I have represented dozens of family child care providers in IRS and Minnesota audits and have saved providers tens of thousands of dollars in taxes as a result of my efforts. I have won five US Tax Court cases on behalf of providers. I continue to assist providers and tax professional with IRS audits at no charge.
2007 Advocate of the Year Award from the Nebraska Family Child Care Association
2004 Advocate of the Year Award from the National Association for Family Child Care
2003 Friend of the National Association for Family Child Care Award
1998 Advocate of the Year Award from the Minnesota Licensed Family Child Care Association