Tax news May 2009

Tax

Another celebrity in the IRS spotlight: Robin Givens

More and more, it seems, celebrities are making themselves at home in the arena of tax troubles. The latest entertainer to spar with the IRS over unpaid taxes is Robin Givens, former wife of heavyweight boxing champion Mike Tyson. The 44-year-old actress is being sued by the U.S. Government for what it says is $292,000 in unpaid federal taxes, interest, and penalties dating back to 1996.
Tax

Two attorneys face the music in Son of Boss tax shelter

The verdict is in for two Texas attorneys – Cary Patterson and Harold Nix – who the IRS says used a Son of Bass tax shelter to eliminate the federal tax on millions of dollars. Between 1998 and 2000, the two men earned fees of more than $30 million each by representing the State of Texas in litigation against tobacco companies. When the IRS took them to court, Hix and Patterson lost and filed an appeal. Now the Fifth Circuit Court of Appeals has ruled against them again, after finding that the investment partnerships they set up lacked economic substance.
Tax

Benefits to both homeowners and lenders in new housing law

With previous efforts to aid homeowners who are facing foreclosure or whose home values are "underwater" making only a slight dent in foreclosure projections, Congress has passed carrot-and-stick legislation called the Helping Families Save Their Homes Act to encourage both homeowners and lenders to take advantage of government mortgage programs. What has changed in this new bill since the U.S. Treasury announced its foreclosure prevention plan in March is that lender participation in government plans is now required as long as consumers meet eligibility requirements.
Tax

Small business tax deduction strategies: Maximize Section 179 write-offs

Even though most business property must be depreciated over a period of time, you can still speed up write-offs if you're armed with tax knowledge. That's because your not-so-secret weapon - the Section 179 expensing allowance - lets you write off most or all of the cost of most business assets in the very first year of ownership! Here are the ground rules.Under Section 179 of the tax code, you can elect to instantly deduct, or "expense," the cost of qualified business assets bought and placed in service during the year, up to a certain limit.
Tax

Tell your clients about new eco-friendly energy tax breaks

Several of our subscribers have asked us about the tax incentives for energy savings contained in the new economic stimulus law (the American Recovery and Reinvestment Act of 2009). Strategy: Learn the new rules inside and out. Then spread the word to your clients. If they make energy-saving improvements this year, they can cut taxes in addition to utility bills. The new law changes may benefit both individual and business taxpayers.What's new for individuals?The new law triples the residential energy credit to 30% of qualified expenditures (up from 10%).
Tax

IRS contractor charged with crime after allegedly urinating in elevator

Criminal charges were filed this week against Michael Hicks, a contractor for the Internal Revenue Service in Detroit, after a surveillance camera showed that Hicks urinated several times in a freight elevator in the IRS building on Michigan Avenue. An affidavit filed in the U.S.
Tax

Global indirect tax policies affect many businesses

A recent KPMG Global Indirect Tax Brief provides the latest information on how governments worldwide are striving to raise additional revenues by broadening their indirect tax base. This does not necessarily mean across-the-board tax increases.
Tax

2008 Foreign Bank Account form due June 30

The IRS reports that U.S. persons who have bank and other financial accounts in a foreign country may be required to report those accounts to the U.S. Department of Treasury by the June 30 deadline.With globalization, more people in the U.S. have foreign financial accounts. There is nothing improper about setting up or maintaining such accounts. However, U.S.
Tax

IRS will not impose penalties on delinquent Foreign Bank Account Reports

The IRS is in the process of cracking down on offshore activities and, as part of this process, is encouraging voluntary disclosures from taxpayers who have offshore accounts.
Tax

IRS spent $19.5 million on cancelled project for new Web portal

The Internal Revenue Service (IRS) spent nearly two years and $19.5 million to develop its new Web portal, but cancelled the project six months before its scheduled completion date, according to a new report publicly released last week by the Treasury Inspector General for Tax Administration (TIGTA).Despite increasing demand for increased services from both taxpayers and IRS employees, the IRS cancelled the project because of concerns about the portal's business strategy and hardware costs, the report found.
Tax

Wisconsin investment advisor charged with engaging in kickback scheme

The Securities and Exchange Commission has obtained an emergency court order to freeze the assets of an Appleton, WI-based investment adviser charged with engaging in a kickback scheme and other fraudulent conduct involving six unregistered investment pools it managed.The SEC alleges that James Putman, who is the founder, majority owner, and CEO of Wealth Management LLC, and Simone Fevola, who is the firm's former President and Chief Investment Officer, each accepted $1.24 million in undisclosed payments derived from investments made by the unregistered investment pools.
Tax

FEI Committee on Taxation urges Congress to help U.S. businesses stay competitive

On May 4, 2009, President Barack Obama and Treasury Secretary Tim Geithner unveiled several major international tax proposals that are intended to correct so-called "loopholes" in current tax law. On May 11, 2009, the Administration issued the Treasury Greenbook, which provided a more detailed description of the tax proposals. The Administration asserts that its international tax proposals will crack down on overseas tax havens and replace perceived tax incentives for creating jobs overseas with incentives to create them at home.
Tax

'Bad guy' tax preparers keep courts busy

Even with government agencies that include the Secret Service and the Tax Division of the Justice Department working with the Internal Revenue Service to identify offenders, there is no shortage in the number of tax preparers accused of engaging in fraud.
Tax

New Jersey is offering tax amnesty program

The New Jersey Division of Taxation has initiated a limited time Tax Amnesty program for individuals and businesses that, due to tough economic times, owe taxes and are now confronted with accumulating interest payments and penalties. From now until June 15, 2009, the Division will waive all penalties and forgive half of the interest owed.Tax Amnesty is available to individuals and businesses that owe unpaid taxes to the Division of Taxation for tax returns due on or after January 1, 2002 and before February 1, 2009.
Tax

IRS announces optional withholding increase for pension plans

As part of a wider outreach effort to educate taxpayers about the benefits they will receive under the American Recovery and Reinvestment Act, the Internal Revenue Service has released new withholding adjustment procedures for pension plans.In February, the IRS issued revised withholding tables incorporating the Making Work Pay Tax Credit, one of the key provisions of the American Recovery and Reinvestment Act. That change resulted in more take home pay for more than 120 million American households and provided an immediate economic stimulus.
Tax

NTEU attempts to save jobs for 1,500 IRS employees

In an attempt to save the economic livelihood of about 1,500 employees at the Internal Revenue Service's (IRS) Andover, MA service center who are facing the loss of their job this year, a group of six members of Congress has asked the Special Inspector General of the Troubled Asset Relief Program (TARP) to ensure preference to Andover employees when hiring to fill TARP jobs and other economic oversight positions.In a letter to TARP Special Inspector General Neil M. Barofsky, lawmakers from Massachusetts and New Hampshire—led by Massachusetts Reps. Stephen F.
Tax

Some California celebrities are in the public eye for owing taxes

California has more than its share of tax cheats, and since so many TV and movie actors call southern California home, a few of them made the rolls of scofflaws this year, and last year, and the year before... some of them have been haunting the tax cheat rolls for a decade. Given the sorry state of California's economy, it would be hard to blame Governor Arnold Schwarzenegger for rattling the saber a little bit at his fellow entertainers who owe back taxes.
Tax

Will multinational corporations survive the coming tax changes?

Why are business groups, including the U.S. Chamber of Commerce, spitting nails after President Obama's announcement of tax changes on Monday May 4th?U.S. corporations already pay high taxes, 35 percent compared to the average tax rate for other industrialized countries of 24.1 percent. In addition, most countries do not tax the foreign profits of domestic corporations. That means that U.S. multinational corporations are already dealing with fierce competitive disadvantages in the global marketplace.
Tax

Why the secrecy? Public disclosure of taxes not a new idea

Andy Rooney recently brought up the issue of public disclosure of taxes on 60 Minutes after paying the highest taxes of his life. He championed the cause, saying he would show his if everyone else showed theirs in an attempt to expose tax cheaters.The IRS cannot release any of the personal data contained in a tax return or share the information with most other federal agencies, according to an article on taxanalysts.com. But this secrecy about who pays what has not always been the American way.
Tax

States turn federal tax credits into cash for would-be homebuyers

How do you turn a tax credit into a cash benefit that will have the power to stimulate the economy and improve lives? That's the task that 10 or more states are taking on, in an effort to make the recently passed federal $8,000 first time homebuyers credit effective. Here's a reminder of what this credit entails and how to claim it: The credit is available to first time homebuyers, defined as an individual who has not owned a home in three year period prior to the purchase.

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