Tax news November 2006

Tax

Guidance on Reporting and Withholding Under Code Section 409A Issued

The Treasury and the Internal Revenue Service (IRS) issued Notice 2006-100, Reporting and Wage Withholding Under Internal Revenue Code Section 409A on Thursday, providing guidance to employers and payers on their reporting and wage withholding requirements for calendar years 2005 and 2006, with respect to deferrals of compensation and amounts includible in gross income under Code Section 409A and relief from reporting deferrals that are not includible in income during those years.Notice 2006-100 supersedes Notice
Tax

IRS, AICPA Honor Post-Hurricane Pro Bono Work

The Internal Revenue Service (IRS) has presented the American Institute of Certified Public Accountants (AICPA) with an award for “outstanding partnership,” which recognized the Institute’s efforts at recruiting volunteers to prepare tax returns for victims of Hurricanes Katrina, Wilma and Rita in 2005.Advertisement
Tax

It's Tax Checkup Time: Remind Your Clients

As the end of the year swiftly approaches, now is a great time to visit your accountant and make sure you are poised to take advantage of the deductions and tax breaks available on your 2006 returns.Advertisement
Technology

IRS Should Target Online Sellers, Committee Says

An Internal Revenue advisory committee made up of tax experts from outside the agency recently recommended that the Internal Revenue Service (IRS) strengthen enforcement of current tax law as it applies to online sellers, USAToday reports.
Tax

Federal Rules Make Reform of Charity Campaign Difficult

The federal government is trying to fix problems in its annual fund-raising drive for charities, but its own rules are blocking progress.Last year, the U.S.
Tax

Largest Accounting Firms See Coming Revolution in Business Reporting

As part of the Global Public Policy Symposium in Paris, held on November 8 and attended by key players concerned with ensuring the quality and reliability of financial reporting worldwide, the Chief Executive Officers (CEOs) of PricewaterhouseCoopers (PwC) International, Grant Thornton International, Deloitte, KPMG International and Ernst & Young, published a joint statement of their vision of what the future might hold for financial reporting and the accounting profession.
Tax

Churches Adopt Business Management Methods

Megachurches with memberships in the thousands and budgets in the millions are hiring more staff and consultants with business experience as they look to implement corporate management and accounting methods for their congregations.Advertisement
Tax

The Formula Business Is Waiting For: IRS Reveals How to Calculate Excise Tax Refund

“Businesses and tax-exempt organizations generally have more varied phone usage patterns than individuals,” Internal Revenue Service (IRS) Commissioner Mark Everson explained in a statement announcing a formula businesses and tax-exempt organizations can use to estimate their federal telephone excise tax refunds. “The IRS has met with a number of businesses and tax-exempt organizations to understand their concerns.
Tax

Tax Rules of the Road

Here are the key requirements for the new hybrid-vehicle credit: The vehicle must be placed in service in 2006 through 2010. Only buyers of new hybrid vehicles can claim the credit; it doesn’t apply to used vehicles. The person claiming the credit must use the vehicle or offer it for lease. If a qualified vehicle is leased to a consumer, the leasing company may claim the credit. The vehicle must be used predominantly within the United States.
Tax

Steering Clients Towards New Hybrid-Vehicle Tax Credits

From The Tax Strategist, http://thetaxstrategist.netThe new hybrid-vehicle credit effectively replaces the clean-air deduction on the books the past several years. This deduction, set at $2,000 for 2005, was scheduled to be cut down to just $500 in 2006.Instead, the new hybrid credit lets you keep as much as $3,400 in your pocket. Advice: Make sure your clients understand all the tax ramifications.
Tax

Complex Rules Determine Who Will Pay Honolulu’s General Excise Tax Increase

When Hawaii’s state legislature decided to allow county governments on each of the four islands to vote separately on a .5 percent rate hike in the state’s general excise tax (GET), currently at 4 percent, to pay for the proposed mass transit system serving Honolulu, it was trying to avoid making taxpayers on all four islands pay the hike, according to Lowell L. Kalapa, president of the Tax Foundation of Hawaii .
Tax

IRS User Fees Increase for Installment Agreements

The Internal Revenue Service (IRS) on Monday announced the first increases in user fees for installment agreements.
Practice Management

Keep Those Receipts: IRS Guidance on Per Diem Expense Reimbursement

Employers who routinely pay per diem allowances in excess of the federal per diem rates need to track the amount of expense reimbursement allowances paid to employees on a per diem basis, according to guidance issued last week by the Internal Revenue Service (IRS).
Tax

Small Business Survival Index Released

The Washington-based Small Business & Entrepreneurship Council (SBEC) released their 2006 small-business survival study last week. The Warren (Ohio) Tribune Chronicle reports their results compare states for the tax, spending, regulatory and litigation burdens, according to the council’s chief economist Raymond Keating.Small businesses and the spirit of entrepreneurship are important for our economy. Any policies that affect the health and growth of businesses should be examined more closely for obstacles to this sector’s vitality.
Tax

Understanding Your 401(k) Fees, Tax Implications

With more pension plans floundering or failing altogether, workers are advised to step up their knowledge of their company's 401(k) plan.Financial advisers say workers should understand the overall structure of these popular retirement savings accounts, as well as the fees they are paying and the tax implications of 401(k)s.Advertisement
Tax

Mixed Reaction to New Congress from Small Business Groups

Health coverage, taxes and government regulation, the most difficult problems for small businesses, are issues that a lot of newly elected representative to the U.S. House of Representatives understand, according to Dan Danner, senior vice president for public policy with the National Federation of Independent Business (NFIB), the Associated Press reports.
Technology

Debate Heats Up Over Need for Free IRS Web Portal

A major debate is brewing within the tax industry that may result in Congress mandating that the Internal Revenue Service (IRS) offer its own free-filing service.IRS Commissioner Mark Everson said last week that poor quality of tax return preparation by private companies, along with “predatory” refund anticipation loans, is feeding the debate over whether the IRS should allow taxpayers to file their federal income tax returns online without assistance from a tax preparer, Government Executive reported.
Technology

New Software Tracks E-Filed Returns

Electronic filing of tax returns is not without its shortcomings, but each tax season the technology seems to get better.This time of year software companies are releasing their upgraded e-filing programs with new features and conveniences. One of those is a tracking feature offered by CHH in the newest version of its ProSystem fx Tax.The new addition to the e-filing software is the tracking feature, Electronic Filing Status System, which enables the user to track the status of state and federal returns, according to CHH.
Tax

Winners and Losers Among Ballot Propositions Affecting Taxes

Voters approved 141 of the 205 initiatives and referendums on the ballots of 37 states in Tuesday’s election, rejecting only 59, according to iandrinstitute.org’s Ballotwatch. Five measures, including Arizona’s controversial cap on property tax increases, remain to be decided.
Technology

New Chairman, Members for IRS’ ETAAC

Five new members have been selected for the Electronic Tax Administration Advisory Committee (ETAAC). The group serves as a public forum for the discussion of electronic tax administration issues, supporting the goal of increasing electronic interactions between tax professionals and the Internal Revenue Service (IRS).

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