Tax news June 2007

Tax

New advanced coal project tax credit applications available

The U.S. Treasury Department and the Department of Energy (DOE) released today new instructions for applying for the tax credits for advanced coal projects and gasification projects. The new instructions provide additional time to submit applications for the credits. For the 2007-2008 allocation round, applications for DOE certification are not due to the Energy Department until October 31, 2007.
Tax

IRS hopes compliance study reduces tax gap

Internal Revenue Service officials announced plans to launch a new National Research Program (NRP) reporting compliance study for individual taxpayers that will provide updated and more accurate audit selection tools and support efforts to reduce the nation’s tax gap.The latest NRP study will be the first of an ongoing series of annual individual studies using an innovative multi-year rolling methodology. The study will start in October 2007 and examine about 13,000 randomly selected tax year 2006 individual returns.
Tax

Congress closes child tax loophole

A new tax law signed by President Bush further tightens the screws on wealthy parents who make gifts to a child in order to take advantage of a lower tax rate on children's investment income. The law marks the second time in just over a year that Washington has extended the reach of the so-called kiddie tax, which subjects a child's income to a parents' higher tax rate. What prompted Congress to further expand the kiddie tax were reports that some wealthy parents were planning to take advantage of a tax-law change designed for low-income people that will be effective next year.
Technology

Beware phony IRS e-mail warnings

The Internal Revenue Service warned computer users about phony e-mails designed to scare people into believing they are under tax investigation in order to give scammers access to their computer hard drives. The tax agency said that the e-mail claiming to be from IRS Criminal Investigation falsely states that the person is under a criminal probe for submitting a false tax return to the California Franchise Board. Opening up an attachment to learn more about the complaint allows those behind the scam to gain remote access to the computer.

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