Tax news


IRS Launches a New Program for Business Taxpayers

On January 12, the Internal Revenue Service launched a new program for new business taxpayers designed to boost electronic payment of taxes. This development offers some taxpayers new, quicker access to an electronic payment system.This initiative will be available using the Electronic Federal Tax Payment System (EFTPS), a service offered free by two bureaus of the U.S. Department of the Treasury, IRS and the Financial Management Service (FMS).

New Arrest in Parmalat Scandal, Accounting Firms Named in Probe

The investigation into food giant Parmalat widened Monday, as a former director was arrested and two of the bankrupt company’s former audit firms face an official inquiry.Milan magistrates launched formal investigations into Deloitte & Touche’s Italian branch and the former Italian arm of Grant Thorton.
Community News

Protesters Say H&R Block Exploits Low-Income Taxpayers

A national nonprofit community group organized a series of 40 protests against H&R Block’s refund loans, saying that the tax-preparation company takes advantage of low-income clients.The protests were led last week by The Association of Community Organizations for Reform Now, or ACORN, which opposes the company’s ''refund anticipation loans,'' the short-term loans offered by H&R Block and other tax preparers.The loans sound attractive because H&R Block will loan clients their refund amount quickly, and the loans have proven to be popular.

Congress to Consider Withholding Taxes From Contractor Pay

The taxpayer advocate is recommending that independent contractors have taxes withheld from payments, similar to the system used to tax regular employees. The advocate, Nina E. Olson, holds a position created by Congress in 1998 to ensure taxpayers are treated fairly by the Internal Revenue Service. Olson’s office is required to produce an annual report to Congress that lists the most pressing concerns in order of importance.

The Impact of Sarbanes-Oxley on Corporate Tax Departments

By Raj Kushwaha, EVP Products and Services, Velosant, LPThe United States’ Sarbanes-Oxley Act (U.S. Public Company Accounting Reform and Investor Protection Act) of 2002 marks the most significant reform in US public financial reporting of recent times. Designed to restore public confidence in the management of public companies following the outcry over Enron, WorldCom and others, Sarbanes-Oxley has impacted directly on the responsibilities and liabilities of Corporate Executives, Board of Directors, Audit Committees, Auditors and Analysts.

Senate Committee Wants Tax Records of Muslim Charities

The Senate Finance Committee wants to see confidential tax and financial records of 27 Muslim charities and foundations as part of a broad investigation into whether the tax-exempt organizations are tied to terrorist groups.The committee has asked the Internal Revenue Service to turn over records that include lists of donors and leaders, applications for tax-exempt status, audit records and the results of criminal investigations, the Washington Post reported.Committee staffers and outside experts say the request, announced Wednesday, is unusual in its scope.

Alternative Minimum Tax Top Problem Facing Taxpayers

National Taxpayer Advocate Nina E.

IRS Has Free Publications on Every Topic You Need

From aardvark to zyzzyva, the IRS has a publication that covers it — free for the asking. The IRS has numerous publications on a variety of tax-related topics available by phone, fax or on this Web site.Are you a student seeking knowledge on the lifetime learning credit? Check out Publication 970. Are you a first-time home buyer? Information on potential deductions is housed in Publication 530.No matter what you’re looking for, you can find it by using one of these easy steps:Access the’s “Forms and Publications” page to find what you need.

Fastow Strikes Plea Deal, Will Serve 10 Years for Role in Enron Scandal

He helped engineer one of the biggest frauds in history and yesterday former Enron Chief Financial Officer Andrew Fastow pleaded guilty to charges that will put him in prison for 10 years. His wife Lea, former Enron assistant treasurer, pleaded guilty to a lesser tax charge and will spend five months in prison.The plea by Fastow includes a stipulation that he will cooperate with prosecutors who are investigating, but haven’t charged, other top Enron officers, including former Chairman Kenneth Lay and former CEO Jeffrey Skilling.

California Tax Preparers Gear Up for Mandatory E-Filing

A new law in California has some tax preparers scrambling to ensure they can file every state tax return electronically this year. The law requires all tax preparers who filed more than 100 state returns for the 2002 tax year to submit all their work for this tax season by computer. Taxpayers can opt out of the program if they choose.The California Society of CPAs says that reaction to the new law has been mixed. One CPA, Donna Flanders of Modesto, told the Modesto Bell that e-filing is "the wave of the future" that cuts down on paperwork.

Coming Soon to a TV Near You: ‘The Accountant and the Stripper’

The accounting profession is about to get the Hollywood treatment: Actor William H. Macy is slated to star as a CPA who turned six failing strip clubs into financial jackpots in an upcoming Showtime movie based on a true story.According to the Hollywood Reporter, the movie is tentatively titled "The Accountant and the Stripper" and will focus on Lew Berman, who took over the Florida strip clubs as a receiver in 1996, just after he retired from the Melbourne, Fla., CPA firm he co-founded.

Top Ten Most Often Missed Business Tax Deductions

Calling the millions of dollars that is overpaid to the Internal Revenue Service (IRS) each year, "a widespread epidemic", the Tax Recovery Group (TRG) is releasing their list of the top ten most often missed business tax deductions. Failing to utilize these deductions accounts for the majority of businesses overpaying their taxes, which, according to statistics, businesses throughout the country overpay their taxes to the sum of millions of dollars each year.

IRS Office of Professional Responsibility to Disbar CPA

An administrative law judge has issued a decision and ordered that Joseph R. Banister be disbarred from practice before the Internal Revenue Service. Banister is a CPA from San Jose, CA and a former IRS criminal investigation agent.The IRS Office of Professional Responsibility, in a complaint against Banister, alleged that he was misrepresenting the law to taxpayers and that he failed to file his own federal income tax returns for tax years 1999-2002.

KPMG Makes Management Changes After Recent Tax Shelter Probe

On Monday, KPMG's Chairman and Chief Executive Eugene D. O'Kelly announced that several management changes were being made in the firm's leadership structure. This announcement comes at a time when the IRS is investigating KPMG as a promoter of potentially abusive tax shelters that cost the U.S. Treasury $1.4 billion. According to a GAO report, tax shelter activities cost the IRS between $11 billion and $15 billion each year between 1993 and 1999.

IRS E-Filing Directive Sparks Privacy Debate

Is it unnecessary government intrusion or a way to gather routine information?Tax preparers are debating that question since the IRS announced it would flag taxpayers who use its free electronic tax filing program. Intuit has already said it won’t comply with the directive to identify free electronic filers who use its TurboTax software, USA Today reported. The IRS is trying to encourage more taxpayers to reduce paperwork by filing their federal taxes electronically.

Suit Alleges EY, UBS Knew of HealthSouth Fraud

A suit filed last Thursday in U.S. District Court in the Northern District of Alabama charges that HealthSouth’s former auditors and investment bankers knew about fraud within the company long before it became public last year.The suit, brought on behalf of stock and bond investors who bought into the company between 1998 and 2002, claims that its former auditors at Ernst & Young, and former investment bankers at UBS Warburg, knew about fraud within the company even as they signed off on financial statements and sold HealthSouth securities to the public, the New York Times reported.

IRS Plans New Steps to Improve Operations, Shift Jobs to Front-Line Positions

As part of an ongoing program to improve management of the Internal Revenue Service, IRS Commissioner Mark W. Everson announced today a series of new steps to improve agency operations. These changes are designed to create operational efficiencies that will allow the IRS to add more enforcement positions in 2005.“These changes reflect our ongoing effort to manage the agency efficiently and effectively for the nation’s taxpayers,” Everson said. “By tightening operations, we can devote more people to front-line positions and strengthen tax enforcement activities.

Plea Bargain For Fastow’s Wife Unravels

A plea agreement between prosecutors and former Enron chief financial officer Andrew S. Fastow appeared doubtful Friday after a judge failed to accept a five-month jail term as part of the plea agreement for Fastow’s wife Lea.Fastow had made his plea bargain contingent on his wife’s deal to serve the five-month sentence for filing a false tax return, but Judge David Hittner of Federal District Court in Houston would not commit to that short a sentence, the New York Times reported.

Plea Deal for Wife of Former Enron Exec Gets Preliminary OK

A tentative plea agreement for the wife of former Enron Corp. finance chief Andrew S. Fastow may lead to a plea from Fastow himself and perhaps his cooperation into the investigation of the company’s collapse, observers say.U.S. District Court Judge David Hittner on Thursday tentatively accepted Lea Fastow’s plea agreement, which would send the former assistant Enron treasurer to prison for five months on one count of filing a false tax return, the Wall Street Journal reported.


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