Tax news January 2006

Tax

New IRS Instructions Should Alleviate Tax Preparer Panic CLARIFICATION

The revised paragraph in the 2005 Schedule D Instructions have caused a significant amount of confusion. Regrettably, AccountingWEB may have added to that confusion with an article published briefly here on Wednesday, implying that the reporting requirements for Schedule D and D-1 have changed. They have not.
Tax

Watchdog Group Steps Up Battle with IRS Over Records

A federal government watchdog group has stepped up its fight against what it alleges is a blatant concealment of public records by the Internal Revenue Service (IRS).The Transactional Records Access Center (TRAC) last week filed a motion in U.S. District Court in Seattle, Wash., accusing the IRS of failing to abide by a 1976 court order requiring the agency to make available certain detailed information regarding its enforcement of tax laws. In a separate action in April, TRAC sued the IRS in U.S. District Court in Washington, D.C.
Tax

Introducing the AMT Assistant

A new tool, developed to help taxpayers and tax preparers determine whether the taxpayer is potentially subject to the alternative minimum tax (AMT), debuted last week on the Internal Revenue Service (IRS) website. The AMT Assistant automates the AMT Worksheet, called “Worksheet to See if You should Fill Out Form 6251”, of the 1040 Instructions. The IRS estimates it will talk 5 to 10 minutes to get an answer from the new application.“The alternative minimum tax causes a lot of hair pulling for millions of taxpayers each year.
A&A

IRS Eases Tax Filing Rules for Small Employers

The Internal Revenue Service has announced temporary new rules that will reduce the burden of tax filing on small business owners who usually owe little or no taxes on their quarterly returns.The IRS announced that starting Jan. 1, 2006, certain employers will be able to file a new Form 944 once a year, replacing Form 941, which was filed every quarter.
Tax

Requesting Your Tax Return Information

When requesting tax return information from the Internal Revenue Service (IRS), there are several ways for you to receive your information. You can request tax return transcripts and tax account transcripts. You can also receive a copy of your original return, generally if it has been less than seven years since filing. This information can be obtained by phone or by mail, according to the IRS. The usual fees for transcripts or return copies requested by taxpayers residing in the Presidential Disaster Areas have been waived by the IRS.
A&A

Tax Season Opens with Extended Deadlines & E-Filing Hopes

The Internal Revenue Service (IRS) has kicked off the 2006 tax filing season by announcing some extended filing deadlines, reducing the reporting workload for small businesses, and maintaining its high hopes for continued expansion of electronic filing.The agency has changed this year’s filing deadline to April 17 because the traditional April 15 date falls on a weekend.
Tax

IRS Announces Uniform Definition of Qualifying Child

Beginning in 2005, the Internal Revenue Service (IRS) defines a qualifying child as someone who meets the same four tests: the relationship test, the residency test, the age test and the support test.
A&A

2005 Tax Changes Affecting Electric & Clean-Fuel Vehicles

Taxpayers who put a qualified electric or clean-fuel vehicle into service during 2005 can claim the maximum electric vehicle credit and/or the maximum clean-fuel vehicle deduction, according to the Internal Revenue Service (IRS). Other clean-fuel property placed into service this year may also be eligible to take the maximum deductions. Popular gas/electric hybrid vehicles, such as Toyota’s Prius and Honda’s Insight, not powered primarily by an electric motor, are NOT qualified electric vehicles.
Tax

IRS Issues Guidelines for Substitute Tax Forms

The Internal Revenue Service (IRS) has published IRS Rev. Proc. 2005-74, General Rules and Specifications for Substitute Forms and Schedules to provide guidance to taxpayers and tax practitioners on the development, printing and approval of substitute tax forms. The same guidance is also available, in .pdf format, on the Web site as Publication 1167. This publication is no longer available separately, in a printed format, but is available in hard copy, in the Internal Revenue Bulletin.

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