Tax news February 2008

Tax

IRS targeting taxpayers with accounts in Liechtenstein

The Internal Revenue Service is initiating enforcement action involving more than 100 U.S. taxpayers to ensure proper income reporting and tax payment in connection with accounts in Liechtenstein.
Tax

IRS, Nicolas Cage tangle over personal expenses

Actor Nicolas Cage is the latest celebrity to be caught up in a dispute with the IRS.The IRS contends that Cage, the star of "National Treasure," wrongly wrote off $3.3 million in personal expenses, reports Forbes.com. The expenses included limos, meals, travel, gifts, and his Gulfstream turbojet.Fellow actor Wesley Snipes also tangled with the IRS, which accused him of dodging his tax obligations from 1999 to 2004. Snipes was recently found guilty on three misdemeanor charges for failing to file income tax returns.Forbes, citing U.S.
Tax

IRS gives tax return extension to certain farmers and fisherman

Agricultural industry taxpayers, farmers, and fishermen, who electronically file Form 1040 returns with Form 4136, Credit for Federal Tax Paid on Fuels, must wait until March 3 to e-file the newly-revised Form 4136.Normally, 1040 filers who are farmers or fishermen are not required to make an estimated tax payment if they file their return and pay all taxes due by March 1. But this year, because March 1 falls on a Saturday, the date extends to Monday, March 3.
Tax

Hundreds of rich Germans may be snagged in tax evasion scandal

Homes and offices across Germany were raided Tuesday in a widening tax evasion scandal linked to Liechtenstein that has already claimed the chief executive of Deutsche Post, the German postal service.Klaus Zumwinkel's home was searched last week. Accused of evading $1.47 million in taxes, the powerful executive has since resigned. Officials say more than 100 raids are planned for this week with 1,000 individuals targeted in the investigation.
Tax

Growth of online tax filing expected to increase

As tax season approaches, an increasing number of people plan to file their federal taxes online, according to the Consumer Internet Barometer.Forty percent plan to file online, up from 34 percent three years ago. More than two-thirds of consumers report having filed online for three years or more, up from less than 55 percent in 2005.
Tax

Economic Stimulus Act provides tax benefits to businesses

In addition to providing stimulus payments to individuals, the Economic Stimulus Act of 2008 provides incentives to businesses. These incentives include a special 50 percent depreciation allowance for 2008 purchases and an increase in the small business expensing limitation for tax years beginning in 2008.50 percent special depreciation allowanceDepreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property over several years.
Tax

IRS announces AMT-affected tax return processing back on track

The Internal Revenue Service is now processing five tax forms affected by legislation involving the Alternative Minimum Tax (AMT).On Monday, IRS systems began to accept and process returns that include the five affected forms. After several days of processing, the IRS has confirmed all systems are working properly.In late December, the IRS announced it would delay processing of several tax forms. For the vast majority of taxpayers, the filing season this year began on time.
Tax

IRS provides details of tax rebate program

The Internal Revenue Service is advising taxpayers that in most cases they will not have to do anything extra this year to receive the tax rebate payments beginning in May.
Tax

New IRS tax form helps homeowners with mortgage relief

Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the Internal Revenue Service. Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec.
Tax

Evading taxes a capital offense in China

Wesley Snipes and Richard Hatch should be happy they don't live in China.A federal jury last month ordered actor Snipes, who paid no federal taxes from 1999 to 2004, to pay up to $17 million in back taxes plus penalties and interest.
Tax

Congress passes stimulus bill, including tax rebate

On Thursday, the House of Representatives passed an economic stimulus bill designed to stave off a recession. The bill passed 380-34, complementing the Senate vote of 81-16 earlier in the day. President Bush has indicated he expects to sign the bill into law next week.For the general public, the highlight of the bill is a tax rebate program that will provide individual taxpayers with a $600 rebate and joint filers with a $1,200 rebate this May. Additional rebates will be issued in the amount of $300 per child.
Tax

Survey results: Americans unsure how they will spend rebate checks

American consumers may not be as all-consuming as politicians are hoping for when it comes to jump-starting the economy through a broad-based tax rebate, according to findings from a nationwide CCH CompleteTax survey. "While it may be in the overall economy's best interest for individuals to go out and buy more, when you ask the average person what they would do, they're more focused on their financial well-being than on the health of the economy," said David Bergstein, CPA, a tax analyst for CCH CompleteTax. The survey of 2,020 U.S.
Tax

IRS beefs up online services

Things have gotten easier for taxpayers who need help preparing their federal returns this year. The IRS has enhanced both Publication 17 and Where's My Refund?, two key electronic tools available on this Web site, IRS.gov, the official Web site of the IRS.
Technology

Baseball tickets: Touch all the tax bases

With spring training on the horizon, your client may have lined up baseball tickets. Careful planning can maximize the tax benefits for the coming season.Strategy: Advise your client to take customers out to the ballpark. Besides building goodwill, the client may write off certain ticket costs plus other out-of-pocket expenses. The costs may qualify as business entertainment or a business gift. Ground rules: If a taxpayer attends a game with a customer, the cost is deductible only if the event qualifies as business entertainment.
Tax

Aerospace industry pushes for R&D tax credit extension

The research and development tax credit creates high-paying jobs and should be an important tool in efforts to stimulate the U.S. economy, Aerospace Industries Association President and CEO Marion Blakey said in a Jan. 29 letter to Senate leaders.The tax credit is a proven incentive that helps U.S. companies compete in the global economy by encouraging high technology innovation.
Tax

Partisan bickering leaves tax rebate, economic stimulus in jeopardy

At the end of January, the House voted 385 to 35 to approve an estimated $146 billion stimulus package aimed at countering a slowdown in economic growth. However, one week later, Senate Republicans put the fate of $600-$1,200 rebate checks for more than 100 million Americans in limbo when they blocked the bid by Democrats to add $44 billion in help for the elderly, disabled veterans, the unemployed, and businesses.GOP senators banded together Feb.
Tax

National Taxpayer Advocate asks Congress for Taxpayer Bill of Rights

National Taxpayer Advocate Nina E. Olson has released her annual report to Congress, focusing particular attention on the consequences of changes to the tax code enacted late in the year and the need for a coordinated IRS approach to combat the cash economy portion of the tax gap. Olson also urged Congress to enact a Taxpayer Bill of Rights and to authorize symbolic "apology payments" in egregious cases where taxpayers suffer significant harm as a result of IRS errors.
Tax

Pennsylvania diverts gambling revenue to tax rebates for seniors

Pennsylvania Governor Edward G. Rendell is encouraging senior citizens and residents with disabilities to apply for Property Tax/Rent Rebates of up to $650. Application forms have been mailed to nearly 550,000 residents who received a rebate last year."Revenue from slots gaming provided desperately-needed property tax relief to nearly 550,000 seniors last year," Governor Rendell said. "Nearly half of those seniors would not have received the rebates without slots gaming revenue.
Tax

Snipes jury acquits on felony tax charges

The jury in the Wesley Trent Snipes tax trial has found the actor guilty on three misdemeanor charges for failing to file income tax returns. Snipes was acquitted on felony charges of conspiracy to defraud the Internal Revenue Service and presenting a fraudulent claim for payment to the IRS. He was also acquitted on three other charges of failing to file income tax returns. Eddie Ray Kahn, of Sorrento, FL, and Douglas P. Rosile, of Venice, FL, were found guilty of conspiracy to defraud the IRS and presenting a fraudulent claim for payment to the IRS.A sentencing date has not been set.
Tax

UK self assessment tax system recovers from crash, extra day given to filers-

Our sister site, AccountingWEB.co.uk, is reporting that the UK Self Assessment Online portal has been restored to service in the mid-afternoon on Thursday after breaking down on the busiest day of the tax year.An HMRC (Her Majesty's Revenue and Customs) spokesman confirmed that the Self Assessment online filing service experienced "technical difficulties" on Thursday morning, which meant that some taxpayers could not file online.Just after 3:30 p.m.

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