Tax news April 2007

Tax

Senators Drop Bills Abolishing IRS & IRC

Two bills were introduced in the Senate last week that would abolish Internal Revenue Service and the Internal Revenue Code, accoridng to the NAEA E@lert.The first bill, S. 1025, introduced by Senator Saxby Chambliss (R-GA), would defund the IRS and replace Subtitles A, B, and C of the tax code with a 23 percent tax-inclusive sales tax, to be administered by the states.
Tax

SEC Approves Framework to Ease SOX Rules

The Securities and Exchange Commission approved a framework Wednesday for changes to rules under the Sarbanes-Oxley law that would ease requirements for companies and the auditors responsible for their records. Sarbanes-Oxley, which arose from the 2002 corporate scandal, mandates that public companies assess the strength of their internal checks and balances to guard against fraud. The vote by the five SEC commissioners was unanimous to support building more leeway into the rules, especially rules for auditors being written by the independent board that oversees the accounting industry.
Tax

Renaissance Promoter Pleads Guilty to $75 M Fraud

Todd Eugene Strand of Murrieta, Calif., pleaded guilty in a Kansas City, Kan., federal court to conspiracy to defraud the United States in the assessment and computation of taxes and mail fraud charges for his involvement in a tax fraud scheme, the Justice Department and the U.S.
Tax

Illinois Tax Scam Promoters Indicted

A prominent Southern Illinois automobile dealer and three promoters of a tax fraud scheme in the U.S. Virgin Islands were charged with a variety of tax and wire fraud-related charges in an indictment returned last Friday and made public today, the Justice Department and the Internal Revenue Service (IRS) announced.A federal grand jury in East St. Louis, Ill. returned the 21-count indictment, which charges James A. Auffenberg Jr. of Swansea, Ill., Peter G. Fagan of De Leon, Texas, James W. Ferguson III of Amarillo, Texas, and J. David Jackson of St. Croix, U.S.
Tax

Clients Who Save the Planet Can Save on Taxes

As April 17 draws near, taxpayers across the country are taking a last look at their returns to make certain they claim every last exemption, credit or deduction they have coming to them. If 2006 was the year your clients “went green,” you may find that in addition to doing their part for the planet and cutting back on their energy costs, they are eligible to claim numerous tax credits created to reward efforts to save energy.
Tax

GAO Audit Reveals IRS Security Weaknesses

The Government Accountability Office recently reported that the Internal Revenue Service has made limited progress toward correcting or mitigating previously reported information security weaknesses. The report found 66 percent of the weaknesses that GAO had previously identified still existed.As part of its audit of the IRS’s 2005-06 financial statements, the GAO took a look at what the agency was doing to correct previously reported information security weaknesses.
Tax

Govt. Sues to Shut Down 125 Jackson Hewitt Franchises

The Justice Department has sued to shut down 125 franchises of No. 2 U.S. tax preparer Jackson Hewitt Tax Service Inc. after the IRS accused the outlets of submitting thousands of fraudulent returns that cost the government more than $70 million. The Justice Department said the franchises' fraudulent practices included using phony W-2 forms, bogus deductions and fuel tax credits and false claims regarding the earned income tax credit. Jackson Hewitt Tax Services Inc. is the nation's second largest tax preparer.
Tax

IRS Reveals Most Common Errors

The Internal Revenue Service urged tax preparers and taxpayers to review their tax returns for common errors that could delay the processing of returns and refunds.Here are some ways to avoid common tax return errors:File electronically. If you choose to e-file, many of the common errors are avoided or corrected by the computer software. If income is under $52,000, you may be able to e-file for free using IRS Free File.Use the peel-off label if you choose to mail a paper return. You may line through and make necessary corrections right on the label.
Tax

House Approves Taxpayer Protection Act

The House Ways and Means Committee approved H.R. 1677, the "Taxpayer Protection Act of 2007," which seeks to crack down on RALs and prevent identity theft.
Tax

IRS Private Collection Earns Passing Mark & Controversy

A much-debated program to use private companies to collect unpaid taxes has been given a generally positive assessment by a Treasury Department auditor.Even so, an employee union and some members of Congress are hoping to end the Internal Revenue Service program before it expands as planned later in the year, Government Executive magazine reported."Overall, the IRS has taken proactive measures to effectively develop and implement the program," J. Russell George, Treasury inspector general for tax administration, wrote in his audit report.
Tax

Justice Dept. Levies $75M Tax Shelter Fine

The Justice Department last week announced that, as part of an agreement with the Texas-based law firm, Jenkens & Gilchrist, it will not seek a criminal indictment of the firm for its involvement in the creation and sale of aggressive tax shelters and that the firm will pay a fine of $75 million to the Internal Revenue Service.One former partner in Jenkens & Gilchrist’s Chicago office, Paul Daugerdas, earned $93 million in fees from tax shelter work, making him one of the single wealthiest participants in the tax shelter business, according to the New York Times.Jenkens & Gilchrist, wh
Technology

Cell Phones Eligible for Excise Refund

The Internal Revenue Service reports that a large number of cell-phone users are overlooking the telephone tax refund mistakenly believing that the one-time refund only applies to land-line customers. According to the IRS, most cell-phone users qualify for the federal telephone excise tax refund. In most cases, the refund is also available to land-line, fax and Internet phone customers as well. The method of phone signal transmission does not affect the refund.

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