Tax news March 2008

Tax

IRS personnel and volunteers reach out on 'Super Saturday'

In an effort to reach people who don't normally file a tax return but who will need to file for 2007 in order to qualify for the economic stimulus package, the Internal Revenue Service (IRS) opened 320 offices nationwide on March 29th for "Super Saturday," working with volunteers from partners including the AARP Tax Aide program and the United Way. IRS field assistance personnel also visited nursing homes and similar locations to prepare returns.
Tax

IRS on YouTube: Tax agency joins the 21st century

If you want to see pop stars committing fashion disasters or politicians falling asleep at receptions, you log onto YouTube. In an innovative approach to making Americans aware of tax rebates, the IRS has climbed onboard the YouTube bandwagon.
Tax

How to deal with the advance recovery (stimulus) rebate process

Grant Thornton’s National Tax Office has received a number of inquiries concerning how to best deal with the advance recovery (stimulus) rebate process. The following summarizes our current understanding of the situation and is based on both public pronouncements and informal discussions with IRS and other government officials.Getting the rebate as soon as possibleThe IRS will begin issuing advance rebate payments this May and will continue to issue them through the end of the year.
Tax

H&R Block rebate survey shows taxpayers in a cautious mood

More that 65 percent of taxpayers surveyed by H&R Block on March 1st are planning to use their rebates to pay bills or buy necessities like food. Respondents to the online survey were also asked how they planned to spend their tax refunds, and their answers showed nearly the same priorities. Forty five percent of taxpayers surveyed said they would use both the rebate and the refund to pay bills; 21 percent said they would use the rebate for necessities while 17 percent said they would use their refunds for necessities.
Tax

Tax Freedom Day arrives early in 2008

The annual announcement from the Tax Foundation tells us how many days we have to work each year in order to pay federal taxes. Tax Freedom Day 2008 will fall on April 23, three days earlier than 2007's Tax Freedom Day, which fell on April 26.Stimulus rebates and a projection of slow growth in 2008 are the principal reasons for the earlier celebration, according to the nonpartisan Tax Foundation.Tax Freedom Day is calculated by dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year.
Tax

IRS to offer extra help on 'Super Saturday'

The Internal Revenue Service and scores of its partners nationwide will open hundreds of locations on Super Saturday, March 29, in an effort to reach those Americans who are eligible for the economic stimulus payment but who normally are not required to file an income tax return.Approximately 320 IRS offices will be open on Super Saturday to prepare the simple Form 1040A for people who are filing a return solely to receive their stimulus payment.
Community News

Ex-KPMG partner charged in new case

Federal prosecutors in New York have charged Robert Pfaff, 57, of Englewood, CO, a former partner at KPMG, with conspiracy to defraud the United States and to commit tax evasion and wire fraud, and obstructing and impeding the Internal Revenue Service (IRS) by concealing fees he and others received for setting up tax shelters for various clients. The indictment charges Pfaff and co-conspirators with hiding millions of dollars in fees by transferring the money from bank accounts in the U.S. and the Northern Mariana Islands into Philippine bank accounts.
Tax

Latest e-mail scam targets TurboTax

As if the mad rush for Americans to collect all the necessary financial data and file their taxes wasn't bad enough, cybercrooks are beefing up spam attacks concerning taxes as April 15 approaches.Some spammers are targeting the wildly popular, do-it-yourself tax software giant TurboTax with an e-mail message telling the recipient to download software updates in order to comply with new IRS requirements. But the URL provided doesn't take you to TurboTax's official Web site.
Tax

IRS provides safe harbor guidance for personal use of Section 1031 investment home

Recognizing that many taxpayers who own properties primarily for rental income use them occasionally for personal purposes, the Internal Revenue Service (IRS) in February clarified safe harbor rules for personal use of properties that are held under IRC Section 1031 as for productive use or for investment. These properties qualify for deferred payment of capital gain.
Tax

Indiana homeowners benefit from new tax law while sales tax increases

A new tax restructuring plan in Indiana cuts property taxes for homeowners while giving them more control over the rates of increases in the future.Gov. Mitch Daniels signed the tax package on Wednesday to lower property taxes and raise the sales tax from 6 to 7 percent effective April 1. Homeowners will get an average 30 percent property tax cut, starting with May bills.House Speaker Pat Bauer told the Louisville Courier-Journal that millions of people were afraid of property taxes costing them their home.
Tax

IRS requests comments and input on new Form 941X

The IRS is looking for stakeholder input on a new form and process, planned to begin in 2009, that will improve the way employers and payers correct errors on previously filed employment tax returns.The agency has posted a "vision draft" of new Form 941X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund, for public review.
Tax

IRS announces rebate payment schedule

The Internal Revenue Service announced on Monday that it will begin sending more than 130 million economic stimulus payments starting May 2. The initial round of weekly payments will be completed by early July.The IRS also announced the availability of a new online calculator on IRS.gov to help people determine the amount of their stimulus payments.Stimulus payments will be made by direct deposit to people who choose to receive their 2007 income tax refunds through direct deposit.
Tax

New IRS Commissioner Shulman takes over reins

Douglas H. Shulman, the newly confirmed commissioner of the Internal Revenue Service, said he would concentrate both on enforcement and service and work to ensure the tax agency is fair, according to Associated Press reports."For the majority of Americans who pay their taxes willingly and on time, there must be clear guidance, accessible education, and outstanding service," Shulman said in a statement released by the IRS.
Tax

Cost of IRS rebate letters engenders comment

Over the weekend, the Internal Revenue Service received a lot of attention from Op ed columnists, letter writers, and general news media, in this case because the agency spent $42 million to mail out 130 million letters to individuals who filed a 2006 federal return telling them that they might receive a rebate.
Tax

Home office deduction makes Top Ten list for government reform

The U.S. Small Business Administration's Office of Advocacy has announced its 2008 Top 10 Rules for Review and Reform. The Top 10 are drawn from over 80 rules nominated by small business owners and their representatives as part of the Regulatory Review and Reform (r3) initiative. The recommendations have been transmitted to the appropriate federal agencies for their action.“The strongest and most compelling cases made our Top 10 list of rules,” said Thomas M. Sullivan, Chief Counsel for Advocacy.
Tax

IRS soliciting help in finding potential rebate recipients among the poor

As part of a national outreach effort, the Internal Revenue Service is encouraging nonprofits, charities, and other community groups to reach out to low-income Americans who may not realize they are eligible for the 2008 economic stimulus payment.Workers who normally do not file a tax return because their income is too low but who have at least $3,000 in wages, tips, or salary or other qualifying income may be eligible for an economic stimulus payment.
Tax

Accounting students earn course credit through VITA participation

Taxpayers from low income families, military families, and the elderly throughout the country are getting help with their federal and state income tax returns at the Internal Revenue Service's (IRS) Voluntary Income Tax Assistance (VITA) sites, many of which are staffed by student volunteers from accounting and business programs at nearby colleges and universities. For some accounting student volunteers, participation in VITA is considered a part of their academic learning as well as a unique service learning opportunity.
Tax

Grant Thornton urges IRS to delay patenting regulations

Grant Thornton LLP believes that patenting tax advice or tax strategies should be prohibited by legislation and urges the Internal Revenue Service and the U.S. Department of Treasury to delay finalizing the proposed regulations while Congress considers an appropriate legislative solution.Tax advice and tax strategies are rooted in public law. Granting a patent on such strategies and advice allows the patent holder to control or charge another taxpayer for applying law enacted for the potential benefit of every taxpayer.
Tax

AICPA and InvestmentNews offer online tax season assistance to financial advisers

The American Institute of Certified Public Accountants and InvestmentNews have teamed up this tax season to offer online answers to tax questions submitted by financial advisers. Readers of the weekly newspaper will be able to submit tax questions to InvestmentNews for consideration. The answers will be provided by a panel of CPAs who are members of the AICPA's Tax Division.
Tax

IRS issues new guidance on LIFO pooling for certain vehicle resellers

Using the Industry Issue Resolution (IIR) program, the Internal Revenue Service has issued guidance regarding the proper pooling treatment of automobiles, light-duty trucks, and crossover vehicles which have characteristics of trucks and cars under the dollar-value, last-in, first out (LIFO) inventory method.The Treasury Department and Internal Revenue Service recognize that the distinctions between cars and light-duty trucks have diminished significantly since the issue was last addressed in IRS guidance and by the Courts.

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