Tax news

Tax

H&R Block Readies Refund to Peace-Seeking Taxpayers

H&R Block, the nation's largest preparer of income tax returns, has reached an agreement with the attorneys general in 41 states and the District of Columbia to reimburse certain Block customers who paid for a special insurance policy, the Peace of Mind, in connection with the preparation of their 2001 income tax returns.Block offers the Peace of Mind program for taxpayers who want an additional level of protection beyond the standard service guarantee.
Community News

Pennsylvania Judge OKs Lawsuit Against H&R Block

A Pennsylvania judge has given the green light for a class-action lawsuit to proceed against tax preparation firm H&R Block. The suit alleges that Block deceived its customers into paying for extra fees for filing tax returns electronically.According to the lawsuit, after Block prepared the taxes for the two plaintiffs in the case, the company led the plaintiffs to believe that their only option was to file the return electronically, at a cost of $30 to $40.
Tax

Senate Panel Investigating Tax Shelter Abuses

The U.S. Senate Permanent Subcommittee on Investigations has launched an investigation into the potentially abusive tax shelter schemes marketed and sold by Big Four firms Ernst & Young and KPMG. The agency has requested documents from the firms relating to the shelters.The investigation follows on the tails of a similar investigation into the validity of tax shelters being conducted by the Internal Revenue Service.
Tax

KPMG Survey Results Show R&E Credit Not Successful

Congress created the Research & Experimentation credit program in the 1980s to provide an incentive for companies to engage in research and to level the international corporate playing field.
Tax

Citizen Groups Target Corporate Offshore Tax Shelters

Two prominent online citizen-action groups have launched a media and grassroots campaign to end corporate offshore tax shelters. MoveOn.org and WorkingforChange.com say that big corporations aren’t shouldering their share of the tax burden and are deserting the country at a time of need.
Tax

Some Out-of-State 529 Plans Face Taxes

Parents confounded by the over abundance of ways to save for college may face a new hurdle as out-of-state College 529 Plans become subject to income taxes in some states. The 529 funds, often exempt from state taxes, have become a popular way to save for college since up to $250,000 can be put away for education-related expenses, with the earnings exempt from federal taxes.A new trend shows that more states are levying income taxes on those who earn dividends on plans outside of their home states.
Tax

IRS Tightens Loans to Pay Estate Taxes

When an entrepreneur dies, heirs must sometimes sell the family businesses to pay the estate taxes. Recognizing this burden, the Internal Revenue Service (IRS) allows qualified businesses to use a low-interest installment plan. Even so, some businesses take advantage of the financing arrangement, often failing to make their payments. Now, the IRS is getting tough, requiring installments loans to be secured with a bond or lien, according to an April 17th article in Business Week Online. Section 6166 of the Internal Revenue Code gives businesses up to 14 years to pay estate taxes.
Tax

Washington Accounting Firm Closed in IRS Investigation

Port Orchard, Washington-based Pat's Accounting Inc. was raided by the Internal Revenue Service on one of the busiest days of the year for accountants, April 15. The IRS was acting on information provided by a former employee that Richard Peirce, son of the owner of Pat's, was intentionally preparing and personally benefiting from fraudulent income tax returns.The IRS investigation centers around a tip that Mr.
Tax

IRS Releases Industry Issue Resolution Guidelines

The Internal Revenue Service has published revised procedures for the Industry Issue Resolution (IIR) Program. Under the revised procedures, business taxpayers, industry associations and other interested parties can submit frequently disputed or burdensome business tax issues at any time for possible resolution under the program.In past years, issues have been submitted by industry associations and others representing both small and large business taxpayers. These submissions have resulted in tax guidance that has affected thousands of taxpayers.
Technology

E-Filing Sites Easily Handle Tax Deadline Crunch

Online tax filing went without any hitches this year, according to Gomez, Inc., a research organization that helps companies measure and improve their customers' online experience.In an April 18 article in E-Commerce Times, John Lovett, a senior performance analyst at Gomez, reported that tax preparation sites were prepared for last-minute filers and as a result there were few glitches — even on April 15. Mr. Lovett said that his firm monitored a group of leading tax sites, noting response time and site availability.
Tax

Congress to Debate Changing Tax Filing Date

Maryland Congressman Roscoe Bartlett (R-6-MD) has introduced legislation that would change the annual filing date for income tax returns from the current April 15 to the first Monday in November, the day before Election Day."I think it's just common sense that the price we pay for our government - which is taxes - should be a top priority when Americans go to the polls to select their members of Congress," said
Tax

Some Taxpayers Withhold Payment in Protest of War

With the April 15 tax deadline as a backdrop, dozens of tax season protests, organized by the National War Tax Resistance Coordinating Committee, occurred across the country this past week. Protesters came out to voice their concern about tax funds being used for the war. Additionally, thousands of Americans are finding another way to protest the Iraq war and it doesn’t involve marching in the streets or picketing the White House.
Tax

Study Shows IRS Prosecutions Down

In a season when many Americans are paying their dues to the IRS, the agency is taking a few knocks as the result of a study released last week by Syracuse University's Transactional Records Access Clearinghouse (TRAC).The study found that IRS criminal tax prosecutions are down about 50 percent from what they were a decade ago. The IRS led the prosecution on 1,064 tax cases in 1993, a number that had fallen to 512 by 2002. TRAC predicted about 360 prosecutions for 2003.
Tax

2.4 Million Taxpayers File For Free

The Internal Revenue Service has announced that as of April 9, more than 2.4 million taxpayers filed their taxes online for free using the IRS' Free File program.In February 2002, President Bush proposed free online tax filing as one of his E-Government initiatives.
Tax

White House Continues Fight For Greater Tax Cuts

Provided by CCHPresident Bush will continue to urge Congress to pass legislation that cuts taxes by at least $550 billion over 10 years, as agreed to by the House, which approved the fiscal year (FY) 2004 budget resolution, HConRes 95, on April 10. The budget resolution limits the Senate's economic growth package to $322.5 billion from FY 2003 to 2013. To ensure passage of the budget resolution, Senate Finance Committee Chairman Charles E.
Tax

Amended Returns

Oops! You’ve discovered an error after your tax return has been filed. What should you do? You may need to amend your return, according to the IRS.The IRS usually corrects math errors or requests missing forms (such as W-2s) or schedules. In these instances, do not amend your return. However, do file an amended return if any of the following were reported incorrectly:Your filing status Your total income Your deductions or credits Use Form 1040X, Amended U.S.
Tax

Workers Seek Pension Plan Protections

After a three-year lull, debate on cash balance pensions heated up last week when workers and labor advocates asked the Internal Revenue Service and the Treasury Department to safeguard the pensions of older workers.Labor supporters are asking the government to mandate employee protections for plan conversions. At stake are the pensions of thousands of older workers, who stand to lose promised benefits in the conversion from traditional plans to cash balance plans.
Tax

Tax Time Provides Insight Into Human Nature

Tax payers and tax preparers have toiled since January 1 in gathering the critical data needed to pay Uncle Sam. But while this group rummaged through shoeboxes and 1040 forms, social scientists sat back and observed, looking for clues into human nature.What do they see, these scientists who look at taxpayers the way a doctor observes a virus in a microscope?
Tax

President And Mrs. Bush Release 2002 Tax Return

The White House has announced that President and Mrs. Bush have released their 2002 income tax return.The couple reported taxable income of $771,940 for the tax year 2002. This resulted in a total of $268,719 in federal income taxes paid by President and Mrs. Bush. The President's 2002 income included salary earned as President and investment income from the trusts in which their assets are held. President and Mrs.
Tax

Haven’t Filed Last Year’s Tax Return? Here’s What to Do

The IRS says it hears many reasons from taxpayers for not filing a tax return. You may not have known whether you were required to file. Whatever the reason, it’s best to file your return as soon as you can. If you need help, even with a late return, the IRS is ready to assist you.The failure to file a return can be costly — whether you end up owing more or missing out on a refund. If you owe taxes, a delay in filing may result in a "failure to file" penalty and interest charges.

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