Tax news August 2008

Tax

Disgruntled taxpayer rams car into IRS building

A 48-year-old resident of Center Point, AL, who was apparently upset about his finances, rammed his car into the Birmingham, AL IRS building on Tuesday. After a phone call with the IRS, in which the man, who has not been named in the press, threatened an IRS agent, the agent called Birmingham police. A Jefferson County sheriff was dispatched to the man's house where he was told by the man's wife that the man had left his house. The wife told authorities that the man was armed. The wife provided the sheriff with the man's cell phone number.
A&A

IRS publishes fact sheet on for-profit hobby deduction rules

The Internal Revenue Service would like to remind taxpayers to follow appropriate guidelines when determining whether an activity is engaged in for profit, such as a business or investment activity, or is engaged in as a hobby.Internal Revenue Code Section 183 (Activities Not Engaged in for Profit) limits deductions that can be claimed when an activity is not engaged in for profit. IRC 183 is sometimes referred to as the hobby loss rule.
Tax

Housing bill summary includes many tax provisions

Grant Thornton provides an update on the housing bill that was signed recently by President Bush with over $15 billion in tax incentives and several important revenue offsets. The bill's tax provisions are aimed at both businesses and individuals and will have a significant impact on a large number of taxpayers.
Tax

IRS releases instructions for new Form 990

The Internal Revenue Service released the revised instructions that tax-exempt organizations will need to fill out the redesigned Form 990, which must be filed starting with tax year 2008 (filed in 2009).Most charities and other tax-exempt organizations must file an annual informational return with the IRS to maintain their tax-exempt status.
Tax

Tax Talk Today announces EITC program

Tax preparers are encouraged to attend the next Tax Talk Today monthly Webcast scheduled for September 9 when the topic will be "EITC Due Diligence...It's Your Responsibility."Paid tax return preparers must meet four specific due diligence requirements when preparing returns claiming the Earned Income Tax Credit -- or face potential penalties. Learn what you must do to meet these requirements and get the latest information from the IRS executive and technical staff responsible for this $43 billion program.
Tax

New tax rules for companies with heavy vehicles

Individuals and organizations with 25 or more trucks, tractors or other heavy vehicles used on highways now are required to make their excise tax filings with the Internal Revenue Service electronically, rather than by paper.Form 2290, Heavy Highway Vehicle Use Tax Return, is used to report and pay highway-use excise taxes. Last year truckers and others filed over 700,000 Forms 2290 and paid over $1 billion in federal highway use taxes.
Tax

IRS revises program for voluntary retirement plan corrections

The Internal Revenue Service has issued updated guidance on the voluntary correction program for employee retirement plans – the Employee Plans Compliance Resolution System (EPCRS)."Employers and plan administrators want to comply with the tax laws and regulations to protect plan participants," said Michael Julianelle, director of the IRS's Employee Plans division. "EPCRS helps employers and plan administrators take a proactive role in identifying and fixing mistakes.
Tax

Sales tax holidays: Love them or hate them?

More than a dozen states and the District of Columbia have sales tax holidays that last at least a couple of days each year, some last much longer. Usually the holiday coincides with back-to-school time to give parents a break on outfitting their kids with necessities. What consumers can buy during the sales tax holidays varies by state, but generally includes clothing, shoes, classroom supplies, and computers, often with a dollar limit. Another popular item that pops up in sales tax holidays is energy efficient appliances for the home.
A&A

New IRS analysis shows only half of Schedule C income is reported

New data based on analysis of the Internal Revenue Service's (IRS) National Research Program Individual Reporting Compliance Study of 2001, on which the agency's estimate of the "Tax Gap" is based, show that only one-half of Schedule C income and only 88 percent of capital gains are reported, David Cay Johnston, writing for Tax Notes says. Johnston obtained the data ahead of IRS publication.
Tax

Football great Bernie Kosar pays tax lien

Bernie Kosar, the former National Football League quarterback, says he has paid the $228,806.21 lien the IRS placed on him for income taxed owed for 2006, according to the Cleveland Plain Dealer. The Miami Herald had reported Kosar was behind on property tax for 2007, failing to pay $52,724.95 as of March 31, owing $59,881.49 with penalties, interest, and other charges.As a player for the Browns, Kosar helped guide the team to three AFC Championship games. He also played with the Cowboys, and the Dolphins.
Technology

Has the IRS lost its appetite for collecting payroll tax?

Evidence suggests that many businesses are no longer taking their obligation to pay and remit payroll tax seriously. According to recent GAO report, as of last September 30, 1.6 million businesses owe the IRS in excess of $58 billion in payroll taxes, interest, and penalties. That is the amount accumulated over a period of ten years. Taxes that have been owed for longer than ten years may have been permanently lost, due to a statute of limitations. That amounts to about 20 percent of the total delinquent taxes ($288 billion) for the same period.
Tax

Has the IRS overreached in audits of small businesses?

The National Small Business Association (NSBA), a small business advocacy group, has launched a new Web site, PreventIRSAbuse.org, designed to uncover potentially abusive Internal Revenue Service (IRS) audit tactics and inform its members about efforts by the IRS and Congress to use small business audits to enhance revenue. The NSBA site asks members to contribute their own experience with audits and challenges the fairness of the IRS characterization of the "Tax Gap."
Tax

Indiana accountant arrested for embezzling, shoots himself

Sixty-four-year-old Robert "Mike" Symmes, a Pendleton, IN accountant who operated his practice, Robert M. Symmes & Co., out of Chesterfield, IN, shot himself in the chest after being release on bail from an arrest stemming from a charge of embezzling more than $350,000 from his clients. Symmes was arrested last Wednesday and jailed in connection with felony charges of corrupt business influence, forger, and five counts of theft, the Anderson, IN-based Herald Bulletin reported. He was accused of not forwarding payroll and personal tax payments to the Internal Revenue Service.
Tax

Election Watch: Spectrum Group analyzes impact of certain Presidential candidate tax policies

When individuals talk about taxing the rich but giving breaks to normal middle class Americans, who are they talking about? What is "rich"? What is "middle class"?
Tax

New regulations ‘electrify’ Form 5500 filers

Uncle Sam is giving employers with qualified retirement plans a reprieve from new electronic filing requirements. Alert: New regulations relating to Form 5500, Annual Return/Report of Employee Benefit Plan, have been issued to reflect changes in the Pension Protection Act of 2006 (PPA). The electronic filing requirement mandated by the PPA has been postponed for one year.The new regulations generally apply to plan years beginning after 2008.
Tax

IRS to release instructions for new Form 990

This past April the IRS released for public comment draft instructions to the redesigned Form 990, Return of Organization Exempt From Income Tax, to be filed beginning with 2008 tax years (2009 filing season). The IRS has completed its review of the public comments and made revisions to the draft instructions, and expects to post the revised instructions on its Web site in the next few weeks.The upcoming release of revised Form 990 (2008) instructions will be accompanied by background documents which will explain changes made to the draft instructions in response to public comments.
Tax

IRS 2008 draft forms released: Speak now or forever hold your peace

The Internal Revenue Service has released for public comment draft revisions to Form 1065, U.S. Return of Partnership Income, Form 1120, U.S. Corporation Income Tax Return, and certain related schedules. Included in the release are new Schedule B for Form 1120 and Schedule C for Form 1065. These forms will be for use for tax years ending on or after Dec.
Tax

KPMG report lists most tax-favorable cities

San Juan, Puerto Rico, Baltimore, and Atlanta have the most favorable tax structures for businesses among U.S. cities/locations with populations exceeding 2 million, according to a study released recently by KPMG International (KPMG).Of the 35 large international cities highlighted in the study, San Juan, Baltimore and Atlanta all rank in the top ten -- first, eighth and ninth, respectively. And among the 10 countries in the study, the U.S.