Tax news June 2006

Community News

Auditors Spotlighted As Options Scandals Come To Light

Auditors are in the spotlight as the number of stock-option scandals expands. It seems the manipulation of option prices was more common than previously believed.
Tax

IRS Headquarters to Remain Closed This Week, Maybe Longer

The headquarters of the Internal Revenue Service (IRS) in Washington, D.C., will remain closed for the rest of the week, the Washington Post reported Wednesday.
Tax

Supreme Court Ends Case Involving Records of Offshore Accounts

The United States Supreme Court on Monday denied the petition for a Writ of Certiorari by Jerome Gippetti affirming the Third Circuit Court of Appeals’ conclusion that an individual’s Fifth Amendment right against self-incrimination is not violated by requiring a taxpayer, in response to a summons seeking production by the Internal Revenue Service (IRS), to produce evidence supporting claims made on a federal tax return pertaining to offshore accounts.
A&A

Time for a summer financial check-up

The lazy days of summer offer a great opportunity for small business owners to take stock of their company’s finances and make any necessary changes to their financial projections, especially their estimated tax payments.“You don’t want to pay in more than you have to,” Gordon Spoor, a certified public accountant (CPA) in St. Petersburg, Fla. told the Associated Press. Funds used to overpay could be better used within the company. More information about federal estimated tax payments can be found in Internal Revenues Service (IRS) Publication 505.
Tax

Finance and Accounting Outsourcing Lags; New Technology May Spur Growth

On shore shared-service centers have taken the lead in performing finance and accounting processes, according to a recent study published by the Hackett Group, a strategic advisory firm, with 58 percent of the companies surveyed using the shared services model, globalservicesmedia.com reports. Only seven percent of companies relied on offshore shared-services centers. Twenty-seven percent of financial processes are still performed in-house or in some decentralized manner, according to the study.
Tax

IRS Reminds Charities to Avoid Political Campaign Activities During Election Season

The Internal Revenue Service (IRS) reminds charities to avoid becoming involved in political campaign activities during the coming election season.
Tax

Flooding Closes IRS Headquarters Monday, Tuesday

Flooding caused by more than a foot of rain washed out highways around Washington, D.C., and forced the closing of several offices across the metropolitan area, including the headquarters of the Internal Revenue Service (IRS).
Tax

Accountant Held Liable for Interest Expense from Tax Error

The South Dakota Supreme Court last week upheld a Circuit Court decision allowing a jury to award damages to Doug O’Bryan Contracting Inc. for interest expense on underpayment of taxes that resulted from an error made by his accountant. The state’s high court had not previously allowed recovery of interest expense in lawsuits against tax advisers, the Associated Press reports.Bruce Ashland, a certified public accountant, understated O’Bryan’s income for 1995.
A&A

SMB Growth Expectations Spell Consulting Opportunity for CPAs

In good news for CPAs providing consulting services to small and midsized businesses (SMBs), that market sector is bullish about its near term prospects but is failing to tap into key areas that could further spur growth, according to a nationwide survey of SMBs conducted by accounting and consulting services giant RSM McGladrey.Advertisement
Tax

Information Technology Audits Are Priority for Small Business Owners

Small businesses, whether public companies gearing up for Sarbanes Oxley (SOX) compliance, or privately held companies responding to customers’ demands for secure storage of personal data, are hiring internal Information Technology (IT) auditors in record numbers, according to networkworld.com. Also, internal and external auditors and IT personnel focused on security are working together to meet their goals.
Tax

Governor Arnold Accused of Pandering to Accountants

California Governor Arnold Schwarzenegger is under attack from the press and a public interest group for allegedly pandering to the accounting profession.The Los Angeles Times claims that recent actions by the California State Board of Accountancy “underscore the political clout of the accounting profession,” which the newspaper says has contributed about $500,000 to campaign funds that support Schwarzenegger’s political agenda.
Tax

Correct Worker Classification Essential for Avoiding Penalties

The rash of natural disasters occurring across the nation has caused many businesses to add staff to meet increasing demand for goods and services.
Tax

Compromise Unlikely on Estate Tax Repeal

Small business owners, leading supporters of the drive to repeal the federal estate tax, are debating the next step for the proposal since the defeat of the repeal measure in the Senate last Thursday, by a vote of 57 to 41. Ending debate on outright repeal requires 60 votes and compromise measures face opposition from both Democrats and Republicans. Four Democrats joined the Republicans to open debate on repealing the tax. Some small business owners suggest keeping the tax but raising the exempt amounts, USAToday reports.
Tax

IRS Partners with Public to Make it Easier to Comply with Tax Laws

The Internal Revenue Service’s (IRS’s) Office of Taxpayer Burden Reduction is soliciting recommendations from members of the public on ways to reduce taxpayer burden.
Tax

Responsibilities of American Taxpayers Working Abroad

American taxpayers with tax homes in the U.S. and who are living or working abroad, still have responsibility for paying taxes on their worldwide income, according to the IRS. The good news is that they may also exclude all or part of their foreign salary, wages or other income, up to the maximum annual exclusion, by meeting the bona fide residence test or physical residence test.
Education & Careers

IRS Offers More Special Enrollment Examination Details

The Internal Revenue Service (IRS) has announced further details of the Special Enrollment Examination (SEE) in 2006. The newly announced details vary slightly from those anticipated in April when the IRS announced Thomson Prometric had been selected to develop and administer a computer-based version of the exam on behalf of the IRS.
Tax

White Collar Crime Prosecutions Down; ID Theft Crimes Up

A case-by-case analysis released by the Transactional Records Access Clearinghouse (TRAC), a nonpartisan research organization, shows that prosecution of white collar crime cases by the Department of Justice (DOJ) in U.S. District Courts has declined by 31.3 percent from levels reported in 2001.
Technology

Companies Face Daunting Task of Managing E-mail

Many of the demands that Sarbanes-Oxley compliance has placed on accounting firms have developed into commercial opportunities for other industries.
Tax

Commercial Property Owners Get First Look at Energy Efficiency Deduction Procedures

The Internal Revenue Service (IRS) last week issued an advance copy of Notice 2006-52 on how commercial building owners or leaseholders can qualify for the tax deduction for making their building energy efficient.
Community News

Newkirk Announces New Tax Law Explanation Booklet for Clients; Prospects

“Congress has passed a tax law – TIPRA – that affects the alternative minimum tax, as well as the tax treatment of capital gains and dividends,” Peter Newkirk, President of Newkirk, a nationally known provider of communications for Certified Public Accountants (CPAs) and Certified Financial Planners (CFPs), said in a prepared statement. “Moreover,” Newkirk continued, “Congress is not through legislating. There’s a so-called ‘trailer’ bill being considered, which contains extensions for many popular tax provisions.

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