Tax news October 2008

Tax

Income tax repeal, investments in renewable energy on state ballots this year

While tax measures are less prominent on most state ballots this year, Question Number 1 in Massachusetts asks voters to cut the state income tax from 5.3 to 2.65 percent on January 1 and eliminate it entirely by 2010. North Dakota voters are being asked to cut their income tax by 50 percent and the corporate tax by 15 percent, largely because they enjoy a revenue surplus from a tax on oil drilling, The Wall Street Journal reports.
Tax

Defendant, age 72, gets 13 years in tax fraud case

William Cover of Naperville IL, one of six people convicted of tax fraud, conspiracy, and other charges in May in a nationwide tax avoidance scheme, and the second to be sentenced in the case, was ordered to serve 160 months or 13 years in prison by U.S. District Court Judge Charles Norgle earlier this month. Cover had been found guilty on 25 charges in connection with his participation in a tax scheme promoted by the Aegis Management Company that allowed 650 wealthy taxpayers to avoid $60 million in taxes.
Tax

Wrong addresses cause many to miss out on IRS rebate checks

The Internal Revenue Service is looking for taxpayers who are missing more than 279,000 economic stimulus checks totaling about $163 million and more than 104,000 regular refund checks totaling about $103 million that were returned by the U.S. Postal Service due to mailing address errors."People across the country are missing tax refunds and stimulus checks. We want to get this money into the hands of taxpayers where it belongs," said IRS Commissioner Doug Shulman.
Tax

Missed the deadline for a tax rebate? There may still be time

Going, going… gone? With the October 15th tax filing deadline past, the chance to apply for your economic stimulus rebate has also passed, though only temporarily for most taxpayers. You may remember that, to get the rebate, you had to file a 2007 tax return, and that window of opportunity has closed. The rebates were created for 2008 tax returns, but, recognizing that the economy needed a boost and that the best way to jump start it was with consumer spending, Congress decided to base eligibility on known information, that is, the income reported on 2007 tax returns.
Tax

Long Island students will be IRS agents for a day

Business owners skimming funds from their company. A bar owner who keeps two sets of books. A multi-filer tax scheme. As special Internal Revenue Service agents for a day, students from Long Island University's Brooklyn Campus will see what it is like to solve white-collar crimes like these. Working with real IRS agents on pretend crime investigations, students will be introduced to forensic careers in accounting.
Tax

November Tax Talk Today prepares listeners for Form 990 changes

The Internal Revenue Service's next Tax Talk Today Web cast on Tuesday, Nov. 4, at 2 p.m. focuses on "Preparing for the New Form 990."The IRS has redesigned Form 990 to reflect significant changes that have taken place in the tax law and the tax-exempt sector. Organizations and their preparers will want to tune in to learn about the new form and instructions so that they fully understand how the changes affect the filing process.The new form will be filed in 2009 for the 2008 tax year.
Tax

Cindy McCain releases tax returns

After months of pressure, Cindy McCain, wife of republican presidential nominee John McCain, released the summary pages of her 2006 and 2007 federal income tax returns for public scrutiny. This information is now available on the McCain campaign's Web site. Mrs. McCain had received an extension to file her 2007 tax returns because she had not received all information necessary to complete the returns. Senator and Mrs. McCain have filed separate tax returns throughout their marriage, because Mrs.
Tax

Former IRS agent sentenced in snooping case

Earlier this year, Christopher Supple, 40, of Bridgeport, CN, an Internal Revenue Service officer, was accused of using a computer in 2002 to access tax information regarding a personal acquaintance. Supple pleaded guilty before United States Magistrate Judge Donna F. Martinez in Hartford, CN to one count of unauthorized access to a government computer. In his plea, Supple acknowledged that he accessed the information deliberately and without authorization.Supple faced a potential one-year prison term and a fine of up to $100,000. This week, Supple received sentencing.
Tax

IRS announces pension plan limitations for 2009

The Internal Revenue Service today announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2009. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. It also requires that the Commissioner annually adjust these limits for cost‑of‑living increases.Many of the pension plan limitations will change for 2009 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.
Tax

IRS announces 2009 tax brackets, exemptions, standard deductions

For 2009, personal exemptions and standard deductions will rise and tax brackets will widen because of inflation adjustments announced today by the Internal Revenue Service.By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2009.
Tax

Helio Castroneves still faces tax charges, but may now race outside the country

Just two weeks ago he stood in a Miami court in leg irons and handcuffs, as the judge set bail at a cool $10 million and ordered him not to leave the country. Even so, on October 26th, Helio Castroneves will be racing in the Nikon Indy 300 at Surfer's Paradise on Australia's Gold Coast. The 33 year old two-time Indy 500 champ and winner of 2007's Dancing With the Stars was indicted on October 2nd on multiple charges of tax evasion. But two weeks later, Judge William C. Turnoff has given him permission to compete in the race "down under" later this month.
Tax

Whistleblowers get new protection when they expose tax cheats

As the IRS looks to tighten up its Whistleblower program and make it more effective, it has once again made changes. Just last June they issued updated rules. And four months later, after a period of public comment, they've tweaked the rules again... this time to strengthen the confidentiality of informant identity. This was of particular concern to the Ferraro Law Firm, which represents numerous informants and has filed claims for more than $13 billion in underpaid taxes.
Tax

IRS offers guidelines for hurricane grant tax issues

The Internal Revenue Service has released a notice designed to help eligible homeowners who received federal reimbursement grants stemming from Hurricanes Katrina, Rita, or Wilma take advantage of a new tax provision.Notice 2008-95 provides guidelines to homeowners who received these grants, including the Louisiana Road Home Grants and the Mississippi Development Authority Hurricane Katrina Homeowner Grants.The Housing and Economic Recovery Act, enacted this summer, included the new provision, aimed at help
Tax

AMT fix: No real relief for accountants or legislators

The most significant provision in the Emergency Economic Stabilization Act of 2008 for small businesses as well as individuals is the one-year "patch" of the Alternative Minimum Tax (AMT), says Tom Ochsenschlager, AICPA vice president, taxation, who spoke with AccountingWEB about the broader impacts of the bill. Small businesses are affected by the AMT because they are typically S Corporations or limited liability companies, and as flow-through entities, their revenues are often subject to the tax. "This AMT patch will have very important budget impacts for small businesses," he says.
Tax

IRS gains permanent authority for undercover operations, disclosure of information

Two brief paragraphs in the newly enacted Emergency Economic Stabilization Act of 2008 delete expiration dates from sections of the Internal Revenue Code that grant the Internal Revenue Service (IRS) authority to conduct undercover operations and disclose information relating to terrorist activities and render this authority permanent.
Tax

Tips for maximizing your taxes... and possibly your patriotism

Is it a matter of patriotism to pay higher taxes? Here's what one federal judge said. "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible.
Tax

Can racecar champ Helio Castroneves outrun the taxman?

A winner on the Indy racetrack and onstage at Dancing With the Stars... but in one of his most recent appearances, Helio Castroneves was wearing handcuffs and leg irons. Last Friday the 33 year old Brazilian racecar driver appeared in court to face multiple charges of tax evasion and one count of conspiracy to defraud the United States of taxes on $5.5 million in income.
Tax

IRS Q&A explains first-time homebuyers tax credit

The IRS recommends that first-time homebuyers should begin planning now to take advantage of the new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.Available for a limited time only, the credit:Applies to home purchases after April 8, 2008, and before July 1, 2009.Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.Howev
Tax

Rescue bill extends tax breaks, expands energy credits, and more

Tax provisions attached to the Emergency Economic Stabilization Act of 2008, and signed into law by President Bush on October 3 will result in over 290 changes to the Internal Revenue Code, according to a CCH Tax Briefing. In addition to extending a long list of tax breaks for individuals and businesses, the bill contains provisions directly related to the financial bailout and extends and expands energy credits.
Tax

Tax woes may have Paul Hogan feeling “down under”

The largest tax fraud inquiry in Australia's history, that's the way the Australian Crime Commission describes the scam, or series of scams in which Crocodile Dundee star, Paul Hogan is accused of taking part. The official inquiry, called "Operation Wickenby," is in its fourth year. When the investigation started, the ACC estimated it could clawback about $300 million (Australian) in unpaid taxes.

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