Tax news March 2009

Tax

New tax break available for recipients of unemployment compensation

All or part of unemployment benefits received in 2009 will be tax free for many unemployed workers, according to the Internal Revenue Service."This morning we learned that a record 5.6 million people were receiving unemployment benefits in the middle of March. This underscores the need for the relief provided by the American Recovery and Reinvestment Act, which includes making the first $2,400 of unemployment insurance exempt from tax," said IRS Commissioner Doug Shulman.
Tax

IRS announces additional tax break for new car purchases

The Internal Revenue Service has announced that taxpayers who buy a new passenger vehicle during 2009 may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns next year.This deduction will be an above-the-line tax deduction, so non-itemizers can take the deduction. Furthermore, there is no association between this deduction and the calculation for state and local income tax or general sales tax deductions on Schedule A.
Tax

Madoff’s accountant: When is an auditor not an auditor?

The American Institute of Certified Public Accountants (AICPA) and the New York State Society of CPAs expelled David Friehling, of Friehling & Horowitz, CPAs (F&H) from membership on March 18th following an ethics investigation. Friehling was charged on that same day by the Securities and Exchange Commission (SEC) with falsely certifying that he prepared the audit statements of Bernard Madoff's broker-dealer firm (Bernard L. Madoff Investment Securities LLC – BMIS or BLMIS) in accordance with generally accepted accounting principles (GAAP).
Tax

IRS employee charged with filing false returns, illegal access to data

Timothy M. Morrison, United States Attorney for the Southern District of Indiana, announced that Andrea M. Bennett, 41, Indianapolis, Indiana, has been charged with illegally accessing IRS computers and filing false claims against the government, following an investigation by the Internal Revenue Service, Criminal Investigation Division, and the Treasury Inspector General for Tax Administration. The information alleges that Bennett was employed in Indianapolis as a contact representative for the IRS, providing information to taxpayers and making adjustments to their tax accounts.
Tax

Obama announces Treasury nominees

After some candidates have dropped out of contention, President Barack Obama has announced three high-level nominations for Treasury Department posts. These include: Helen Elizabeth Garrett for assistant Treasury secretary for tax policy, Michael S. Barr for assistant Treasury secretary for financial institutions, and George W.
Tax

Desktop snacks for healthy eating at the office

It's late. Work is piled all around. You still have hours to go before you call it a day. You're hungry. What do you do? Reach for the nearest can of soda and a handful of cookies? Fill your craving with packages of salty snacks? Order out for pizza? Hit the candy machine?
Tax

IRS seeks to pierce the veil of secrecy on foreign bank accounts

The days of anonymous Swiss bank accounts identified only by numbers and of stashes of cash in the Cayman Islands are dwindling. Not that there is anything inherently wrong with keeping the accounts, as long as the purpose isn't to evade U.S. income tax. The IRS reports that since the year 2000, the number of individuals reporting their foreign income on Foreign Bank and Financial Accounts Forms (FBAR) has jumped by almost 85 percent. Even so, the tax authorities still believe that reporting compliance problems are rampant.
AccountingWEB Life

Beat stress by staying in shape during busy season

We all know that one of the best ways to relieve stress and tension is with exercise. The Anxiety Disorders Association of America states that exercise is considered vital for maintaining mental fitness, and it can reduce stress. ADAA reports that scientists have found that regular participation in aerobic exercise has been shown to decrease overall levels of tension, elevate and stabilize mood, improve sleep, and improve self-esteem. Even five minutes of aerobic exercise can stimulate anti-anxiety effects.
Tax

Claiming a Warren Buffett connection couldn't save these investment bad guys

The Securities and Exchange Commission has obtained an emergency court order to halt an ongoing scheme by a Palmdale, CA company and two individuals who defrauded investors through a series of false claims including that Warren Buffett is associated with the company.The SEC alleges that International Realty Holdings, Inc. (IRH), Ottoniel Medrano, and Leticia Isabel Medrano raised hundreds of thousands of dollars from investors in several states since October 2008. Ottoniel Medrano is a prison guard at California City Correctional Center.
Tax

SEC freezes assets of Chicago-area investment advisor

The Securities and Exchange Commission has obtained an emergency court order freezing the assets of a Chicago-area investment adviser and two of its principals who are alleged to have misappropriated more than $4 million in client assets by transferring them to third parties, and incorrectly reported the net asset and other investment values to investors.The SEC charged The Nutmeg Group LLC, owner and managing member Randall Goulding, and chief compliance officer David Goulding for misappropriating client assets, making misrepresentations to their clients, failing to comply with Nutmeg's cu
Tax

IRS seeks to fill openings on Taxpayer Advocacy Panel

The Internal Revenue Service seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), which listens to taxpayers, identifies key issues, and makes recommendations for improving IRS service."TAP members are your friends and neighbors, walking in the shoes of the average taxpayer. A better understanding of how to serve the taxpayer well is a key to sound tax administration," said Doug Shulman, IRS Commissioner.TAP provides a forum for taxpayers from all 50 states as well as the District of Columbia and Puerto Rico.
Tax

More taxpayers jump start their own economies by early filing

Taxpayers who will get refunds may be working out their own economic stimulus plans, by filing their taxes earlier than usual. The IRS reports that as of February 27th, the number of returns filed by the same day last year was up three percent... a modest increase.
Tax

Former BDO Seidman vice chair pleads guilty to tax fraud

Adrian Dicker, a United Kingdom chartered accountant and former vice chairman and board member at a major international accounting firm, has pleaded guilty to conspiring with certain tax shelter promoters to defraud the United States in connection with tax shelter transactions involving clients of the accounting firm and the law firm Jenkens & Gilchrist (J&G), the Justice Department and Internal Revenue Service (IRS) announced. In the hearing before U.S. Magistrate Judge Theodore H.
Tax

California man accused of falsely claiming to be an IRS Enrolled Agent

A Fairfield, California man accused of falsely presenting himself as an IRS Enrolled Agent is facing 16 felony charges following a lengthy investigation by the Treasury Inspector General for Tax Administration.Acting U.S. Attorney Lawrence G. Brown announced Friday that a federal grand jury returned a 17-count indictment against Keith Thayer Towns, 46. Towns, whose business Web site allegedly advertised that he was an enrolled IRS agent, faces 16 felony charges of making false statements to the IRS and a misdemeanor charge of misusing the name of the IRS.
Tax

IRS issues guidelines to assist Madoff victims

Victims of Bernard L. Madoff's massive Ponzi scheme will be able to deduct up to 95 percent of their investment loss, IRS Commissioner Douglas H. Shulman said Tuesday before the Senate Finance Committee.The IRS is issuing guidelines that would cover victims of all Ponzi schemes, not just Madoff's, and would ease the rules for claiming theft-loss deductions, which are losses claimed by victims of fraud.
Tax

IRS lowers interest rates for second quarter

The Internal Revenue Service has announced that interest rates for the calendar quarter beginning April 1, 2009, will drop by one percentage point. The new rates will be: 4 percent for overpayments [3 percent in the case of a corporation]4 percent for underpayments6 percent for large corporate underpayments1.5 percent for the portion of a corporate overpayment exceeding $10,000Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.
A&A

New tax law extends NOL carryback period

The Internal Revenue Service has announced that small businesses with deductions exceeding their income in 2008 can use a new net operating loss tax provision to get a refund of taxes paid in prior years.
Tax

The IRS is now the only tax collector: Can they do the job?

By Anne RosivachThe decision by the Internal Revenue Service (IRS) not to renew contracts with private debt collection companies after a month-long review of their costs and effectiveness has returned all responsibility for collections to the Agency. IRS Commissioner Doug Shulman said in a statement that the IRS anticipates hiring more than 1,000 collection employees in fiscal 2009, which ends on September 30.The private tax collection program was not popular in Congress, which attempted to end the program in 2007 and 2008.
A&A

Small businesses found to be especially vulnerable to fraud

According to a report released by the Association of Certified Fraud Examiners (ACFE), U.S. organizations lose an estimated seven percent of their annual revenues to fraud – but the damage is the worst among small businesses. Among the fraud cases detailed for the survey, the median loss suffered by organizations with fewer than 100 employees was $200,000, higher than the median loss for larger organizations.
Tax

Wanted: A few good Issues for IRS Industry Issue Resolution Program

The Internal Revenue Service is encouraging business taxpayers, associations and other interested parties to submit to the Industry Issue Resolution (IIR) Program tax issues for resolution involving a controversy, a dispute or an unnecessary burden on business taxpayers.Though submissions can be made at anytime for consideration in the IIR program, submitted issues received by March 31, 2009, will be considered for acceptance in April and, if accepted, included on the Treasury/IRS Priority Guidance List.The objective of the IIR program is to resolve business tax issues common to signific

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