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More Taxpayers Ensnared by Alternative Minimum Tax

About 2.6 million taxpayers this filing season will be tangled in a tax web intended for only the richest Americans.Congress in 1969 created a backup tax system called the alternative minimum tax (AMT), which was designed to ensure that the wealthiest Americans paid taxes. The AMT was invented after Congress learned that 155 millionaires paid no taxes in 1966.The problem is that the ATM was never indexed for inflation, so people who do not consider themselves rich are getting hit more and more every year.

IRS Updates 'Dirty Dozen' Scams for 2004

In an update of an annual consumer alert, the Internal Revenue Service urged taxpayers to avoid falling victim to one of the “Dirty Dozen” tax scams and a variety of other schemes. In the new 2004 ranking, several new scams have reached the top of the consumer watch list, including abusive trusts and the “claim of right” doctrine.In addition, the IRS has taken a new step this year and issued 10 new pieces of legal guidance involving scams in the “Dirty Dozen” and other tax schemes.

President Bush Urges Congress to Make Tax Cuts Permanent

President Bush last week called on Congress to make his tax cuts permanent and discussed with taxpayers his plan to create jobs in America and to continue to grow and strengthen the economy. New figures released last week by the Treasury Department demonstrate the real benefits of the President's tax relief for all Americans. Last July and August when tax relief checks went out, families with children received up to $400 per child ¡V in all, 24 million families received tax relief totaling $14 billion.

Treasury and IRS Issue Depreciation Regulations

Last week, the Treasury Department and Internal Revenue Service issued proposed and temporary regulations that provide guidance for computing depreciation deductions under the Modified Accelerated Cost Recovery System (MACRS) in section 168 of the Internal Revenue Code when property is acquired in a like-kind exchange or as a result of an involuntary conversion. "Previously, the depreciation rules for MACRS property acquired in a like-kind exchange or involuntary conversion transaction were unclear.

Federal Prosecutors Issue Subpoenas in Coke Fraud Case

The Coca-Cola Co.

EU Begins $4 Billion in Sanctions Against U.S.

Pascal Lamy, the European Union's trade commissioner, last week put U.S.
Community News

Crowe Chizek Institutes Forensic Services & Investigations Practice

Occupational fraud is one of the most prevalent and costly problems faced by today's business community. According to the National White Collar Crime Center, it is estimated that losses due to employee theft can range from $20 to $90 billion annually, with as many as three-quarters of all employees stealing from their employers at least once. In its most recent "Report to the Nation," the Association of Certified Fraud Examiners estimated that fraud would impact the American economy by approximately $600 billion in 2002.

Treasury and IRS Issue Guidance on 'Swaps'

Earlier this week the Treasury Department and the IRS issued proposed regulations regarding the taxation of contingent nonperiodic payments with respect to notional principal contracts (NPCs). These contracts consist mainly of those transactions referred to in the financial marketplace as "swaps." Existing final regulations state that the income or deduction for a nonperiodic payment must be recognized by a party to the NPC in an economic manner over the full term of the NPC.

Child Tax Credit Could Cause Confusion

It won’t always be easy to take advantage of the new tax breaks, exemptions, deductions and higher child tax credits when filling out returns this year.Tax preparers say that the higher child tax credit is one of the most confusing aspects of the $330 billion tax cut passed by Congress last May. Lawmakers raised what previously was a $600 per-child tax credit to $1,000 for 2003 and directed the Internal Revenue Service to mail the extra $400 immediately instead of waiting for the refund filing season beginning now.

Prisoner Receives $215,000 Refund from IRS

Any law-abiding, tax-paying citizen might be delighted, if not shocked, to receive a $215,000 tax refund from the Internal Revenue Service, but it seems like an awful lot for a prisoner to get. John Wesley Sarpy pleaded guilty earlier this month to filing a false claim when he sent in a tax return from prison, claiming $213,000 refund after showing 2001 earnings of $987,219 and tax withholdings totaling $576,495.

SEC Files Civil Fraud Case Against Columbia Management Advisors, Inc.

The Securities and Exchange Commission filed a civil fraud action this week in federal court in Boston alleging that Columbia Management Advisors, Inc. and Columbia Funds Distributor Inc. allowed certain preferred mutual fund customers to engage in short-term and excessive trading, while at the same time representing publicly that it prohibited such trading. Columbia Management Advisors, Inc.

Treasury and IRS Shut Down Aggressive Executive Stock Transaction

On Wednesday, the Treasury Department and the IRS issued a revenue ruling that would shut down an aggressive transaction involving the exercise of stock options by corporate insiders using debt financing provided by the corporation. In these transactions, typically the corporate insider will exercise options he or she holds by giving the company a promissory note. If the value of the stock later falls below the face amount of the note, the company may agree to reduce the insider’s debt.

KPMG Tax Shelter Probe Widens, Another Firm Enters the Picture

Presidio Advisory Services LLC, a San Francisco-based company founded by two former KPMG partners, has been "informally" contacted by federal prosecutors looking into three of KPMG’s tax shelter strategies.KPMG, one of the "Big Four" accounting firms, admitted last week that it is the subject of a federal probe "in connection with certain tax strategies," the Wall Street Journal reported.

IASB Issues Standard on Share-based Payment

The International Accounting Standards Board (IASB) last week issued International Financial Reporting Standard 2 Share-based Payment (IFRS 2) on accounting for share-based payment transactions, including grants of share options to employees. Recent events have emphasised the importance of high quality financial statements that provide neutral, transparent and comparable information to help users make economic decisions.

Intel Says IRS Inspecting Old Returns

Intel Corp. disclosed that its 2001 and 2002 tax returns are being examined by the Internal Revenue Service, which disputes how the computer chip maker handles tax issues associated with export sales.In an annual filing with the Securities and Exchange Commission (SEC), Intel revealed that the IRS started looking at its old returns in January. The IRS has disagreed with Intel, and other Silicon Valley companies, over export issues and how revenue is transferred between U.S.

KPMG Partnership Confirms Joseph Mauriello as Deputy Chairman

KPMG LLP's 1,600 partners have ratified the selection of Joseph Mauriello as Deputy Chairman of the U.S. audit, tax and advisory firm, according to an announcement by Eugene D. O'Kelly, Chairman and CEO. The election of Mauriello, 59, is effective immediately for a term that runs through the firm's fiscal year 2006.Consistent with the firm's governance procedures, Mauriello was elected by KPMG LLP's board of directors on February 16, prior to ratification by the partnership.

Roman Catholic Church of England: 'Love Your Taxes'

Could an 11th commandment—love your taxes—be far off in England? The Roman Catholic Church of England and Wales has launched a campaign to encourage its 4.6 million members in the U.K. and Northern Ireland to embrace their inner taxpayer.

Tax Tip: Early Distributions From Retirement Plans

An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a “taxing” experience.Any payment that you receive from your IRA or qualified retirement plan before you reach age 59½ is normally called an “early” or “premature” distribution. As such, these funds are subject to an additional 10 percent tax. But there are a number of exceptions to the age 59½ rule that you should investigate if you make such a withdrawal. Some of these exceptions apply only to IRAs, some only to qualified retirement plans, and some to both.

Tax Tip: Remember Your Advance Child Tax Credit

It seems just yesterday when you got that check in the mail for the Advance Child Tax Credit. How much was it? $400? $800? $1233? Who can remember? Now, it’s time to get your stuff together to prepare your 2003 tax return and you’re going to need to know how much that check was. How much did you receive? We’ll tell you how much.

More Errors in 1099s Expected Due to Confusing Dividend Tax Cut

A tax cut that was welcome nine months ago is now creating confusion and hassles for financial companies and taxpayers.Last week, the Treasury Department and the IRS agreed to make certain provisions of the Tax Technical Corrections Act of 2003 related to dividend income available to taxpayers in advance of its passage.


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