Tax news February 2007

Tax

School Bus Driver Allegedly Prepared Returns On Side

The United States has sued a St. Louis woman in federal court to permanently bar her from preparing federal income tax returns for others, the Justice Department announced today. The civil injunction suit against Yolanda White alleges that she prepared federal income tax returns for customers improperly claiming fabricated or exaggerated income tax deductions.According to the government complaint, filed in the U.S. District Court for the Eastern District of Missouri, White works as a school bus driver but also prepares fraudulent income tax returns for others.
Tax

Non-Profits Service Fund Software Launched

Kintera Inc. has unveiled its first software as a service fund accounting system for non-profits.Built on its social constituent relationship management platform, Kintera Sphere Fundware will allow non-profit and government organizations to track the flow of funds from end to end, integrating with business applications such as e-commerce, utility billing and management for grants and donors.“One of the things in the back of people’s minds is where is the money going,” said Harry Chiu, senior vice president of product management for Kintera.
Tax

IRS E-Help Desk In Need Of Help

The U.S. Treasury Inspector General for Tax Administration (TIGTA) has recently issued a 40-page report indicating that the IRS’s e-help desk, launched in 2002, has several problems that need to be addressed.The e-help desk is a telephone call-in service provided by the IRS for taxpayers who have questions about electronic tax filing services offered by the IRS.
Technology

Tax Prep Software Put To The Test

While a reported 60 percent of taxpayers use a paid preparer to complete their tax returns, there are still many individual filers who prepare their own returns using tax prep software. In two separate instances in 2006, tax courts ruled against filers who tried to blame their erroneous returns on the software they used.
Tax

Why Taxpayers Don’t Claim EITC

Complex steps for claiming the Earned Income Tax Credit and a lack of awareness about the benefit are the most common reasons why taxpayers fail to claim it, according to H&R Block.H&R Block, which prepared one of every four tax returns claiming the EITC in 2006, helped more than 5 million taxpayers claim nearly $10 billion in EITC benefits last year. Still, the IRS estimates that nearly a quarter of those who qualify don't claim the valuable credit, leaving as much as $1 billion unclaimed.The EITC offsets income taxes as a work incentive for low-income Americans.
Tax

EAs Should Note President's 2008 Budget Request

Enrolled Agents should take special note of President Bush's fiscal year 2008 budget proposal to allow the Internal Revenue Service to terminate installment agreements.One of the surprisingly few requests aimed at narrowing the tax gap in the president's request would end installment agreements when a taxpayer fails to file a timely return or fails to make timely required tax deposits.At the top of the president's list is expanded information reporting, followed by increased penalties and new requirements for large businesses.
Tax

ABA Tax Law Challenge Winners Announced

The taxation section of the American Bar Association recently announced winners in the 2006 Law Student Tax Challenge, an annual event drawing law student participants from around the country. On average, approximately 40 two-person teams enter the competition each year. Both J.D. and LL.M. degree candidates are eligible to enter, and winners are chosen from both divisions of candidates.
A&A

IRS Offers Bank Secrecy Act Reminder

The Internal Revenue Service reminded small businesses that provide money services, including money transfer services, check cashing, and money orders, may be accountable to reporting and record keeping requirements under the Bank Secrecy Act (BSA).The BSA, passed in 1970 to fight money laundering in the United States, requires businesses to keep records and file reports that have a high degree of usefulness in criminal, tax, and regulatory matters.
Tax

Tax-Free Space Trip Cleared for Launch

When the prospect of a big tax bill ruined a man’s chance for a ride into space, a space tourism startup put his dream back on track.Brian Emmett has signed on to become a tax-free “test passenger” for Benson Space Co., which plans its first flight for the end of next year. Emmett will serve as a consultant, offering feedback during the testing phase of the project, according to the Associated Press.Emmett recently turned down his original chance at weightlessness after winning a spaceflight from the Oracle Corp. as part of a 2005 sweepstakes.
Tax

Treasury Releases Blue Book for FY 2008

The Treasury Department unveiled its General Explanations of the Administration's Fiscal Year 2008 Revenue Proposals also known as the "Blue Book."The Bush administration proposed tax measures that will weigh in with a net cost of $1.9 trillion over the next 10 years. A substantial portion of the Blue Book re-proposes measures that have been included in Blue Books for the last several years. At the top of the administration's list of proposals were provisions to make permanent the income tax cuts enacted in 2001 and 2003.
Tax

IRS Issues Film/TV Production Regs

The IRS has issued temporary and proposed regulations relating to deductions for the cost of producing film and television productions under Code Sec. 181. The regulations affect taxpayers that produce films and television productions within the United States, and became effective February 9, 2007.BackgroundCode Sec. 181, which was added by the American Jobs Creation Act of 2004 (P.L. 108-357) and modified by the Gulf Opportunity Zone Act of 2005 (P.L.
Tax

AICPA Submits Foreign Trust Recommendations To IRS

The American Institute of Certified Public Accountants (AICPA) submitted comments to the IRS on various foreign trust reporting issues that were developed by the Institute’s Foreign Trust Task Force. The specific comments address issues related to foreign trusts, foreign gifts, Canadian registered education savings plans, and nonresident aliens and Notice 97-34 and various foreign trust regulations. The comments cite 15 specific recommendations, including:Revising the Form 8891, U.S.
Tax

H&R Block Opens 1 Million Accounts

H&R Block Inc. announced that the H&R Block Bank reached its goal of opening one million bank accounts for free nearly three months earlier than expected because of the overwhelming popularity of the prepaid card.The company expected to reach its goal by the end of tax season - April 17 this year. Instead, the milestone was reached after slightly more than two months of offering the accounts, which can be accessed with the H&R Block Emerald Prepaid MasterCard®.In those two months, the card has helped H&R Block clients save nearly $30 million on check-cashing fees.
Technology

Accounting Software Provider Acquires Digital Insight Corp.

Intuit Inc., a leading provider of business and financial management solutions for small and mid-sized businesses, financial institutions, consumers and accounting professionals, has completed its acquisition of Digital Insight Corp. Intuit believes the acquisition of Digital Insight, a leading technology provider in online banking, will help redefine the relationship between financial institutions and their small business and consumer customers.
Technology

Information Security Management Remains Chief Concern

Information Security Management is expected to continue to have a powerful influence over business in 2007, according to the 18th Annual Top Technology Initiatives survey of the American Institute of Certified Public Accountants (AICPA). For the fifth consecutive year, the survey identified Information Security as the technology initiative expected to have the greatest effect in the upcoming year.A related initiative, Identity and Access Management, jumped from sixth place in 2006 to second in 2007.
Tax

Ford Hybrids Still Qualify for Tax Credit

The Internal Revenue Service announced that purchasers of qualified Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit. Also, four qualifying 2008 Ford hybrid vehicles were announced. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Ford sold 5,645 qualifying vehicles to retail dealers during the quarter ending Dec. 31, 2006.
Tax

IRS to Scrutinize Excessive Per Diem Payments

Companies that routinely reimburse employees for travel expenses using per diems that are higher than the federal rates, had better make sure the amounts are tracked and documented carefully.The Internal Revenue Service is going after these unsubstantiated amounts and can impose taxes on the entire per diem.
A&A

Experts Predict Bad Year Ahead for Cyber-crime, Cyber-terrorism

According to information released by Risk Bloggers, security and risk management experts around the world predict information security events will occur in 2007, with sophisticated criminal groups increasingly exploiting technology to keep one step ahead of consumer and corporate defenses, resulting in unprecedented losses.Some key vulnerabilities cited were large groups of zombie computers organized into Botnets, web server security holes and uncontrolled mobile devices, such as portable storage and smart phones.
Tax

New Student Taxes Web Site Launched

Gail Perry, a CPA and author (and AccountingWEB staff writer) based in Ann Arbor, Michigan, has launched a new web site dedicated to helping students file their income tax returns online. Not only does www.campustaxes.com provide inexpensive online tax filing for U.S. income tax returns and all state income tax returns, the site provides a Q&A section where students can ask questions of Ms.

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