Tax news July 2008

Tax

Who bears the tax burden in the U.S.?

"Soak the rich" is a popular concept among some groups. Raise taxes on the wealthiest among us, and we'll raise revenue and be rolling in surplus cash, right? Everyone's got a story about some bazillionaire who picks his teeth with hundred dollar bills and never pays a red cent in taxes. But setting anecdotes and politics aside, a quick look at the facts will tell you, the notion that the U.S. can tax its way to prosperity is all wrong.
Tax

Florida man arrested in murder-for-hire of IRS employee

United States Attorney Robert E. O'Neill, Melissa Chedotal, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA), Atlanta Field Division and Steven Ibison, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Tampa Field Office, today announced the arrest of Randy Nowak, age 48, of Mulberry, Florida. Nowak is charged in a criminal complaint with attempting to murder an employee of the United States, specifically the IRS, related to the performance of her official duties, in violation of Title 18, United States Code, Section 1114.
Tax

PayPal turns over account records to IRS

Earlier this year, PayPal let customers know the company would be providing the IRS with some of their account information. This was in response to a 2006 federal court ruling that the IRS could ask PayPal, a global leader in online payments with more than 63 million accounts worldwide, to hand over account information on American taxpayers with bank accounts, credit cards, or debit cards from foreign financial institutions."Your privacy is extremely important to PayPal.
Tax

A tax tale gone wild: Is Joe Francis a victim of the rogue IRS and a disgruntled CPA?

Joe Francis, founder of the "Girls Gone Wild" videos, is no stranger to legal trouble. But according to his attorney Robert Bernhoft, the eleven months Francis just spent in jail awaiting trial on felony tax evasion charges had nothing to do with any misbehavior on his part. Instead, the trouble stems from the government persecuting his client because, says Bernhoft: They don't like his videos; they are jealous of his youth and his enormous success; and the IRS runs a "rat-out-your-neighbor" abusive Whistleblower program.
Tax

Colorado man accused of bribing IRS agent with baseball tickets

A Monument, CO man has been indicted by a federal grand jury on charges of attempting to bribe an IRS Agent. Edward Sobczewski, 47, was arrested Wednesday and accused of asking an IRS agent to alter the audit results of his 2006 income tax return in exchange for season tickets to the Colorado Rockies baseball games.Sobczewski was be advised of the charges pending against him in the U.S. District Court in Denver. If convicted of Bribery, Sobczewski faces up to 15 years in federal prison, and a maximum of $250,000 in fines.The Denver Post reports that U.S.
Tax

Celebrity Watch: Michael Vick adds back-taxes to list of woes

Former NFL quarterback Michael Vick, currently serving a prison term for criminal conspiracy resulting from felonious dog fighting, filed for Chapter 11 bankruptcy protection earlier this month and has requested more time for preparing the paperwork in his bankruptcy proceeding.
Tax

Indian tribes take issue with IRS interpretations

Indian tribal governments are urging Congress to enact legislation that would prohibit the IRS from interpreting the tax law in a way that limits the tax-exempt debt that Indian tribes can issue, claiming that such limitations put the tribes at a competitive disadvantage to state and local government, according to a report in public finance newsletter, The Bond Buyer.Tribes claim that the IRS limitations require that tax-exempt bond status is only allowed if the proceeds from the bond issues go towards "essential government functions." Tribes attempting to use tax-exempt bond dollars
Tax

IRS tries to find non-filers to give them rebate checks

The Internal Revenue Service is reminding qualifying retirees and veterans that it is not too late to file for an economic stimulus payment and announced it will send a second set of information packets to 5.2 million people who may be eligible but who have not yet filed for their stimulus payment.The packages will contain everything needed by a person who normally does not have a filing requirement but who must file this year in order to receive an economic stimulus payment.
Tax

IRS announces new deadlines for disaster-area tax return extensions

The Internal Revenue Service is postponing until August 29, 2008 the time to file certain tax returns, to make certain tax payments, and to perform time-sensitive acts for storm, flood, and tornado victims in presidential disaster areas in six states, mostly in the Midwest.Previously, these deadlines varied by state, and the postponement provides people affected by the disasters with additional time."Our hearts go out to the people hit by these disasters," IRS Commissioner Doug Shulman said.
Tax

John Doe summons means Swiss banks may have lost their mystique

On July 8th, the IRS met with several major accounting firms that have foreign offices - a group which is thought to include Ernst & Young, PricewaterhouseCoopers, KPMG, Deloitte, BDO Seidman and Grant Thornton - to solicit their help with the Qualified Intermediary program. That program began in 2000 and is designed to help the IRS track funds that may be secreted in foreign accounts. Just days ago, a U.S. District Court Judge Joan A.
Tax

IRS warns of latest scam attempts

The Internal Revenue Service cautions taxpayers to be on the lookout for a new wave of scams using the IRS name in identity theft e-mails, or phishing, that have circulated during the last two months.In May and June alone, taxpayers reported almost 700 separate phishing incidents to the IRS. In 2008 so far, taxpayers have reported about 1,600 phishing incidents to the IRS."Taxpayers should take steps to keep their personal information out of the hands of identity thieves," said IRS Commissioner Doug Shulman.
AccountingWEB Life

Protect client assets in an Alaska trust

Your clients have worked hard to amass their wealth. So it's unfortunate when the family fortune is exposed to creditors or litigious individuals. Fortunately, there's an innovative technique for safeguarding their assets.Strategy: Establish an "Alaska trust" that meets certain requirements (see box). This is a self-settled trust where the grantor and the beneficiary are the same person. Yet the trust receives the same protection normally afforded to other types of trusts.
Tax

ID theft and foreclosures top list of IRS priorities

On Tuesday, the National Taxpayer Advocate Nina E. Olson delivered a report to Congress that identified the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year.
Tax

July Tax Talk will address retirement plan pitfalls

The Internal Revenue Service's Tax Talk Today program returns on Tuesday, July 8, 2008 at 2 p.m. with a Web cast on Retirement Plan Pitfalls.Few issues are as important to the owner of a business and its employees as the proper administration of retirement plans. Ensuring that the retirement plan is in good running order keeps the promise made in setting up the plan.Attend this program to learn how to use the IRS Fix-It Guides to identify and correct frequently encountered errors the IRS sees in retirement plans.
Tax

Stimulus rebate payment program wrapping up

Last week the Treasury Department sent out 10.025 million economic stimulus payments to American households totaling $7.775 billion. So far, Treasury has sent out 104.875 million total economic stimulus payments totaling $86.079 billion.
Education & Careers

Education tax credits would save states billions

Education tax credits -- programs that allow individuals to deduct education expenses from their tax liabilities, or corporations to do the same for donations to scholarship funds -- will save money for states that enact them, finds a new study from the Cato Institute.In "The Fiscal Impact of a Large-Scale Education Tax Credit System," Andrew Coulson, director of Cato's Center for Educational Freedom, and Ball State University economist Anca Cotet estimate the effect that model legislation for tax credits would have on the budgets of five different states.
Tax

IRS changes extension rules for K-1 business taxpayers

Internal Revenue Service officials have announced a change in the extended due date on certain business returns to help individuals better meet their filing obligations. The change, which reduces the extension period from six to five months, eases the burden on taxpayers who must report information from Schedules K-1 and similar documents on their individual tax returns.Income, deductions, and credits from partnerships, S corporations, estates, and trusts are reported to partners, investors, and beneficiaries on Schedules K-1 and other similar statements.
Tax

AMT relief passes House; Senate prospects unclear

The House last Wednesday approved a bill that would save millions of families from the Alternative Minimum Tax (AMT), but prospects in the Senate are not promising.The House voted 233-189 to stop the AMT from spreading to more middle-class taxpayers next April while raising taxes on hedge fund managers and oil companies to raise the estimated $61.5 billion in lost revenue.The Senate did not support a similar plan to raise the money that was proposed in December.

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