Tax news March 2007

Technology

IRS Names New Director of Electronic Tax & Credits

The Internal Revenue Service named David R. Williams as director of the electronic tax administration and refundable credits unit.The electronic tax administration office oversees the e-file program that is now used by most taxpayers, the IRS said, as well as the
Tax

Tax Cheat Avoids $100 Million Penalty

Incorrectly worded Justice Department documents filed as part of the biggest tax prosecution ever will cause the federal government to miss out on $100 million.Telecommunications entrepreneur Walter Anderson, who admitted hiding hundreds of millions of dollars from the IRS and District of Columbia tax collectors, was sentenced Tuesday to nine years in prison and ordered to repay about $23 million to the city. But U.S.
Technology

Houston, We Have a Problem

When it comes to filing tax returns, Houston is the worst procrastinating city in the United States, according to an Intuit study. The company tallied last-minute online tax filings to rank which American cities are the biggest procrastinators when it comes to filing federal income tax returns. The "Top 10 Procrastinating Cities in America," was determined by the number of tax returns electronically filed online via the TurboTax Online service from April 14 - April 17, 2006. Houston, along with Chicago, has consistently ranked near the top of the list each year it has been published.
Tax

2006 Tax Year Tough on IRS

A new telephone refund, last-minute tax changes and a direct-deposit service made the 2006 tax filing season challenging for the Internal Revenue Service.So said IRS Commissioner Mark Everson, who noted during a Tuesday speech that the agency grappled with implementing the one-time telephone excise tax refund. During an address at the National Press Club in Washington, D.C., Everson added that he was surprised at the low claim rate for the refund, Government Executive magazine reported.
Practice Management

Another Enron in Europe?

Many European businesses are failing to effectively implement corporate governance codes which is heightening the risk of a serious corporate scandal on the scale of that involving Enron, new research claims. A poll of Europe's 500 largest publicity listed firms found just 56 percent had the necessary policies in place to protect against ethic and compliance failures, with only 9 percent expecting budgets aimed at addressing the issue to increase.
Technology

IRS Enhances Online Payment Application

Two recent enhancements provide added functionality to the Internal Revenue Service’s Online Payment Agreement application. The first permits individuals who have not yet received a bill to establish pre-assessed agreements on current tax year Form 1040 liabilities. The second allows practitioners with valid authorizations to remain in the application to request agreements for multiple clients.
Tax

Benefits, Dangers of Paying Taxes with Credit Card

Individuals and businesses may choose to pay taxes with one of the major credit cards through service providers that have contracts with the Internal Revenue Service (IRS) and earn miles, points, rewards or money back from the credit card issuer. For taxpayers whose returns contain an unpleasant surprise, the credit card option allows some time to pull together the cash he needs to pay the tax bill.But preparers should warn their clients that interest on credit card balances is generally higher than interest paid to the IRS on underpayment of taxes (currently 8 percent).
Technology

Self-Prepared e-Filing Up 8 Percent

The Internal Revenue Service announced that e-filed returns from tax professionals have climbed more than 4 percent. But one of the biggest areas of growth is in returns filed electronically from home. Self-prepared e-filed returns have grown more than 8 percent from last year. “Taxpayers are filing electronically at a record pace this year,” said IRS Commissioner Mark W. Everson. “We encourage people to consider e-file and Free File as the tax deadline approaches.
Tax

Health Tax Credit Tips for Pension Clients

If you have clients receiving pensions from the Pension Benefit Guaranty Corporation or benefits under the Trade Adjustment Assistance programs, they may be eligible for the Health Coverage Tax Credit (HCTC). The HCTC pays 65 percent of qualified health plan premiums for eligible individuals. These individuals can choose to have the 65 percent credit applied either monthly directly to their health plan as their premiums become due, or yearly on their federal tax return as a refund or credit against taxes owed.
Tax

Monitoring Your Clients' Life Changes

A survey of more than 1,000 taxpayers found that 55 percent of Americans don't know about or won't claim credits and deductions triggered by some of life's most celebrated events.The survey by H&R Block reveals that more than half of taxpayers whose life situation changed last year through marriage, having a baby, buying a home or changing jobs remain unaware of major tax benefits available to them.
Tax

IRS Seeks Tax Advocacy Panel Members

The Internal Revenue Service is seeking individuals to help improve the nation's tax agency by applying to be members of the Taxpayer Advocacy Panel. The Panel provides a forum for citizens from each state to make suggestions regarding IRS and its decision making. The panel’s purpose is to listen to taxpayers, identify taxpayers' issues, and make recommendations for improving IRS service and customer satisfaction. Taxpayer Advocacy Panel (TAP) members:Provide opportunities for citizen input and make recommendations to the IRS on customer-service issues.
A&A

A Conversation with Barry Goldwater: Handling High Net Worth Clients

As CPAs get deeper into financial services and wealth management, they will have to solve more and more complex financial problems which often cut across unfamiliar planning territory. One group of clients many firms hope to close, can be both challenging and rewarding. They are high net worth individuals, those clients who fit into the $10 million-and-above club. If you are fortunate in grabbing the opportunity to inform and perform for high net worth clients, you must stop and think about what is important to this group.What drives and motivates them?
Tax

Senate ID Theft Hearing Lauds Calif. Privacy Laws

A U.S. Senate subcommittee was told Wednesday that California's innovative privacy laws are successfully protecting Californians by getting consumers, businesses, government agencies and others to change their behaviors in order to better protect personal information and fight identity theft.
A&A

Computer Theft Endangers Calif. Firm's Clients

A Santa Rosa tax accounting firm is alerting thousands of clients that their private financial records may be in jeopardy after a key computer was stolen from the office, the Santa Rosa (Calif.) Press-Democrat reported.Terry Brown, owner of Tax Service Plus, said a computer containing the records of his firm's 3,000 to 4,000 clients was missing when he arrived at work March 7 and found a back door broken open.He said he's notifying clients by letter what actions they should take to protect themselves against anyone who tries to use the stolen information to open a fraudulen
Tax

IRS’ OIC Changes Affect Delinquent Taxpayers

The Offers in Compromise (OIC) program, through which thousands of delinquent taxpayers negotiate down their debt to the IRS each year, has been revised and the new application package is now available, NAEA E@lert reports. While negotiating an OIC has never been an option for the majority of taxpayers, key features of the program have changed dramatically enough that it will no longer be feasible for some and will be available to others for the first time.
Tax

IRS Auditors Claim Billions Lost Under Pressure

A Congressional committee is looking into IRS auditors’ complaints that they are being forced to close corporate cases prematurely, leaving billions in tax dollars unpaid. In interviews, these revenue agents warned that unless they were free to pursue what their instincts tell them, their focus would end up being only on known abuses, and new ones created by the tax advice industry would go undetected.The agency countered that it had increased the number of companies whose tax returns it examined by a fourth since 2001, even though the number of auditors was virtually the same.
Technology

e-Filing Tip: Form 8886, Reportable Transaction Disclosure Statement

Previously, Form 8886 needed to be e-filed in XML format as part of the electronically filed return. Now, it can also be attached as a PDF.Taxpayers required to file electronically can provide the Form 8886 in either XML as part of the electronic return file or as a PDF attachment. Taxpayers electing to include Form 8886 as a PDF attachment must use the most current version of the form as posted on IRS.gov, Forms and Pubs, and the file should be described as "Form 8886".
Tax

CalCPA Assists Food Bank, Promotes Tax Credit

Low-income individuals and families in the Fresno area are receiving groceries from the Community Food Bank in special bags advising them on how to get money back from Uncle Sam.The bags, donated by the California Society of CPAs and the CalCPA Institute, provide information on how to apply for the Earned Income Tax Credit (EITC), a federal program.
Tax

IRS Approves Saturn Hybrid Credits

The Internal Revenue Service has approved the certification by General Motors Corp. that its 2007 Saturn Aura Hybrid vehicle meets the requirements of the Alternative Motor Vehicle Credit as a qualified hybrid motor vehicle. The credit amount for the hybrid vehicle certification of the 2007 Saturn Aura Hybrid is $1,300.Consumers seeking the credit may want to buy early since the full credit is only available for a limited time.
Tax

Where's My Refund? Boosts IRS Web Traffic

Use of the IRS Web site has increased 9 percent over this time last year to 83.3 million visits, according to IRS e-News for Tax Professionals. One of the most popular features is Where’s My Refund?, the IRS Internet-based service at which tax preparers and their clients can check the status of a refund anytime from anywhere. Nearly 21 million requests have been received on Where’s My Refund? this year, representing a growth of more than 3.9 million users compared to the same period last year.“Where’s My Refund? is easy to use,” said IRS Commissioner Mark W. Everson.

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