Tax news July 2006

Tax

1995 IRS Education Requirements Upheld

The Federal Labor Relations Authority (FLRA) has ruled that the Internal Revenue Service (IRS) can raise the educational standards of new revenue agents, according to the Washington Post.
A&A

IRS Announces New Tip Reporting Program

The Internal Revenue Service (IRS) has released formal guidance on its new tip reporting procedure, the Attributed Tip Income Program (ATIP). ATIP is a three-year program that does not require employers to meet with the IRS to determine tip rate or eligibility. Employers will participate on an annual basis, however, participation by employers and employees is voluntary and does not require a signed agreement with the IRS.
Tax

Verbal Agreement Found in Pension Bill Negotiations

Negotiators have been seeking concessions on compromise legislation to help America’s stressed employer-based pension system. Last week a verbal agreement on parts of the bill was reached. One hanging issue is a proposal backed in the Senate bill giving special relief to financially strapped airlines. GOP leaders are pressing negotiators for a cut in estate taxes as well, according to the Associated Press.
Tax

Auditors Limited In Responding to Criminal Acts

Auditors sometimes find evidence of criminal or questionable acts in the course of their work.
A&A

Retailers Say Visa and MasterCard Violate Antitrust Laws

Antitrust attorney W. Stephen Cannon, representing the Merchants Payments Coalition, a group of about 20 retail trade associations, in written testimony before the Senate Judiciary Committee last week accused Visa and MasterCard of violating federal antitrust laws through their practice of setting the interchange rates charged by banks to complete consumer transactions. The interchange fee, now close to 1.74 percent, is charged every time a consumer uses a credit or debit card to pay for a purchase.
Tax

Tax Practitioners Question Planned Methods to Curb Malpractice

A wide-ranging Internal Revenue Service (IRS) proposal to strengthen malpractice enforcement has sparked objections from tax practitioners and attorneys.The agency would publicly list the names of tax attorneys and accountants who are under investigation for alleged violations of IRS professional practice rules, according to Tuesday’s Wall Street Journal. Current rules say the names are kept private until the IRS Office of Professional Responsibility formally investigates and assesses a penalty.
Tax

Indianapolis Accounting Staffer Embezzled $350,000, City Claims

A former employee of the Indianapolis Parks Department is facing charges that she directed $350,000 in public money to her personal bank accounts.The accounting staffer, who was fired after allegedly admitting her crime to investigators, steered fake credit and debt card refunds to her own accounts, according to charging papers. Questionable transactions went back to 2000. The employee, Kenya Miles, faces charges of official misconduct, theft and fraud against a financial institution.
Technology

E-File Available Through October 16

The Internal Revenue Service (IRS) reminds taxpayers who previously filed for extensions that they can electronically file (e-file) their tax returns through October 16, 2006.E-filing is a safe, convenient and secure way to file tax returns. Taxpayers receive a confirmation to keep for their records.
Tax

Mark Your Calendar: Hawaii Schedules Summer Taxation Workshops

The Hawaii Department of Taxation will launch their 2006 Summer Workshop series on the island of Kauai on July 25.
Tax

Before Coming to America

American taxpayers going abroad have tax responsibilities here in the U.S. This is because our country taxes Americans based on their citizenship and even those with “green card” residency, according to ExpatExchange.com. Tax residency is determined by circumstance tests combined with the determination of residency facts, as well as tax ties to other countries.Worldwide income is the extent of income taxes in most countries where one is a resident or citizen, according to ExpatExchange.com.
Tax

Extra Funding Leads to Layoffs at IRS

On the heels of winning extra funding for enforcement and taxpayer services from a Senate panel last week, the New York Times is reporting that nearly half of the lawyers responsible for auditing the tax returns of wealthy American taxpayers may be losing their jobs.The Senate Appropriations Committee has voted unanimously to approve a 2007 fiscal year budget of $10.7 billion for the Internal Revenue Service (IRS). The IRS budget is part on a larger $69 billion bill funding the Treasury, Judiciary, Transportation and Housing and Urban Development departments beginning October 1.
Tax

Attention Shoppers: 13 States Announce Sales Tax Holidays

Sales tax holidays are growing in popularity this year with four more states joining nine other states and the District of Columbia in waiving sales and use taxes for a limited time during July and August. The waivers may not include all items and local sales taxes may still apply in some locations."This is an excellent opportunity for working families, single parents and anyone else who needs a break to buy essentials and back-to-school items.
Tax

Undisclosed Marriage Causes Problems For Couple

Carolyn Branan and Ralph Lovejoy were married, but they didn’t tell their clients. After their separate companies were found guilty of selling abusive tax shelters, along with KPMG, by the Internal Revenue Service (IRS), this former power couple is finding life difficult, being named in about a dozen lawsuits initiated by former clients, according to the Charlotte Observer. Although not indicted by the IRS directly, the couple became key players in the tax shelter market in their own respective firms.
A&A

Inside the Small Business Practitioners' Tax Forum

The AICPA’s Small Business Practitioners Tax Forum was held July 17 – 18 in Chicago, Ill. This year’s forum had a new focus on Internal Revenue Service (IRS) Compliance, demonstrated by the more than 130 pages of notes that accompanied Monday’s first session “Tax Update”, presented by conference chair Mark Mares.
Tax

Is There a Problem Here? Privacy and Data Security in the Mobile CPA Firm

Look around your firm today. It seems like everyone is using a notebook computer, right? Not just audit teams, but partners, consultants, and accountants from all departments of the firm are carrying their computers with them as they travel out and about. With decreasing prices and increasing capabilities, today’s notebooks are in many cases the equal of most desktop machines. Included in that increased capacity are huge hard drives capable of storing enormous amounts of data.
Tax

Judge Approves $36M Settlement Balance in PNC Scandal

A federal judge in Pittsburgh has approved the last part of a settlement involving more than 73,000 shareholders who lost money in a PNC Financial Services Group Inc. accounting scandal.The shareholders are ready to receive about $2,600 each, for a total of $36.6 million, based on the $193 million settlement and interest. That amounts to 68 cents per share, the Pittsburgh Tribune-Review reported. It's not clear when settlement money will be distributed, and the final amount will be reduced by attorneys' fees.The last remaining portion of the class-action lawsuit was approved by U.S.
Tax

Tax Update: Motor Vehicles

The high cost of fuel is a popular topic these days. The debate over oil prices, however, obscures the fact that considerable legislative, regulatory, and legal action has been taken over the last year affecting motor vehicles, including the Energy Tax Incentives Act of 2005, the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETY), Rev. Proc. 2006-15, 2006-5, IRB 387, Rev. Proc. 2006-18, 2006-12 IRB 845, and Notice 2005-44, 2005-25 IRB 1287.
Tax

Audits Find Problems with Use of Government Vehicles

Recent audits at state, local and national government departments have revealed weak controls over personal use of government–owned vehicles by employees, government failure to report personal use as a taxable benefit, underutilization of government owned vehicles and inadequate control of employees’ access to government-owned fuel.
Tax

Revamped Offer-In-Compromise Program Often Requires 20 Percent Up-Front Payment

Under a new federal law, taxpayer submitting new offers in compromise (OIC) in many cases must make a 20 percent nonrefundable, up-front payment, according to the Internal Revenue Service (IRS). An offer in compromise is an agreement between the taxpayer and the IRS resolving the taxpayer’s tax debt.
A&A

FASB Increases Relevance & Comparability of Income Tax in Financial Reporting

The Financial Accounting Standards Board (FASB) on Thursday issued an interpretation that increases the relevancy and comparability of financial reporting by clarifying the way companies account for uncertainty in income taxes. “T[his] interpretation reflects our concerns that widespread diversity in practice, including inconsistent measurement associated with uncertainty in accounting for income taxes, has resulted in less relevant, less comparable and less complete information for investors and other users of financial statements,” Edward W.

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