Tax news

Tax

IRS Updates Per Diem Travel Rates

The Internal Revenue Service has issued Revenue Procedure 2002-63 providing new per diem rates for employee expenses incurred while traveling away from home for work. The rates can be used by businesses wishing to reimburse employees for unsubstantiated lodging, meal, and incidental expenses while traveling away from home.Employers may reimburse employees for travel related expenses using the new per diem rates and the expenses will be deemed substantiated.
Tax

Archer MSA Pilot Program Continues

The Internal Revenue Service has announced plans to continue the Archer Medical Savings Account (MSA) pilot program beyond the planned cut-off date of October 1, 2002. Originally the IRS indicated it would only allow 750,000 MSAs to be created under the pilot program. Only 21,079 MSA returns were filed for 2001, and the number of MSA returns expected to be filed for 2002 is 59,151.Taxpayers with MSA accounts enjoy tax treatment similar to Individual Retirement Arrangements (IRAs) for their medical accounts.
Community News

IRS Closes Tax Shelter Loophole

The Internal Revenue Service issued Notice 2002-65 that will close the tax loophole that enables certain types of tax shelters that have gained publicity lately. The IRS estimates that last year alone approximately 87,100 taxpayers used a tax device such as the one addressed in this Notice.The premise behind this tax avoidance device is to move income through various entities such as partnerships and S corporations in such a way as to defer tax payment and in some cases avoid taxes altogether.
Tax

IRS Announces Increase in Interest/Dividend Threshold

Internal Revenue Service tax form Schedule B, "Interest and Dividend Income," will become a distant memory for more than 15 million taxpayers starting with the 2002 tax returns that will be due in the Spring of 2003.
Tax

IRS Commissioner Rossotti's End-of-Term Report

Internal Revenue Service Commissioner Charles O. Rossotti's five-year term will end in November 2002. In anticipation of that event, Mr. Rossotti has filed an end-of-term report with the Treasury Department's IRS Oversight Board. "We are winning the battle but losing the war," said Mr.
Tax

New Study Highlights Bad News For Seniors With IRAs

A study released last week by the Joint Economic Committee (JEC) of the House of Representatives points out problems with the current law requiring mandatory withdrawals from retirement plans which, in a declining stock market, result in seniors being required to reduce their retirement holdings much faster than they originally anticipated.Hefty penalties on non-mandated withdrawals from Individual Retirement Accounts and other tax-deferred accounts such as 401(k)s discourage seniors from withdrawing their money when the market conditions are conducive to sound investment strategy.
Tax

Ex-CEO Gets Jail Time For Corporate Kickback Scheme

Although recent legislative reforms have focused on public companies, headlines show the fallout from corporate greed also affects executives and auditors of private companies. Last week, the founder and former CEO of Conair Corporation was sentenced to 20 to 37 months in jail for tax evasion.The tax evasion took the form of a multi-million dollar kickback scheme involving several vendors.
Tax

Projected Inflation-Adjusted Tax Brackets And Other Amounts For 2003

provided by CCHCCH has prepared projected inflation-adjusted tax brackets for the 2003 Tax Rate Schedules, standard deduction amounts, and personal exemption amounts for use in year-end and 2003 tax planning. The projected figures are based on the inflation-adjustment provisions of the Internal Revenue Code (IRC) and the average of the Consumer Price Index for All Urban Consumers (CPI-U) published by the Department of Labor for each month in the 12-month period ending on August 31, 2002.
Tax

Taxpayers Voluntarily Disclose Questionable Transactions

The Internal Revenue Service's 120-day amnesty program for encouraging taxpayers to disclose participation in tax shelters ended in April, 2002, and since that time the IRS has been sifting through 1,664 disclosures that were made by 1,206 taxpayers who participated in the program.
Tax

IRS Gets Hands Slapped

This week, the Treasury Department's Internal Revenue Service Oversight Board released a report indicating that certain IRS operations are causing significant problems and actually creating more hardships for taxpayers. The Oversight Board requested that the Office of Taxpayer Advocate (OTA) step in and make sure that the IRS resolves taxpayer's questions more quickly.
Tax

IRS Announces 2003 Standard Mileage Rates

Press ReleaseThe Internal Revenue Service has announced the optional standard mileage rates to use for 2003 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.The amounts for the various deductible costs for use of a car will be effective January 1, 2003, and are as follows:The standard mileage rate for the use of a car for business purposes is 36 cents a mile for all business miles driven, down from 36.5 cents a mile in 2002.The standard mileage rate for the use of a car when giving services to a ch
Tax

'Push, Nevada' Dares to Give IRS a Good Name

The Internal Revenue Service has a new hero. He is Jim Prufrock, the meek IRS agent portrayed by actor Derek Cecil as a champion of the hardworking taxpayer in the new ABC/Disney series, "Push, Nevada." The show premiered Tuesday night, well in advance of other network season premieres scheduled for the weeks to come, and it caught an audience hungry for new fare.For those who remember David Lynch's "Twin Peaks" of several years ago, this show will seem like familiar territory.
Tax

IRS Seeks Comment on Changes to Form 1116

The Internal Revenue Service is asking for comments on its revisions to the instructions for Form 1116, Foreign Tax Credit. These changes are to be effective for tax year 2002 and beyond. The streamlined instructions include simplification of the worksheets used to compute the adjustments to foreign source capital gains and losses, as well as shorter and simpler descriptions for how to fill out the tax form.A draft copy of the 2002 instructions for Form 1116 is available for your examination.
Tax

IRS Vows to Catch Big Fish With New Technique

Introducing a major shift in audit strategy, the Internal Revenue Service on Thursday announced plans to implement a new statistical technique designed to identify taxpayers who fail to report their entire income.The target group is taxpayers with income of over $100,000, which is a major change in focus for the IRS.
Tax

House to Vote on New Education Bill

The U.S. House of Representatives is expected to schedule a vote, perhaps as early as this week, on H.R. 5193, tentatively called the Back to School Tax Relief Act of 2002. The bill, introduced by Rep.
Tax

Consumer Groups Object to IRS E-File Program

Last month the IRS unveiled a new plan to offer links to online tax software vendors on its Web site. In return for the links, each of the vendors promise to provide free tax preparation services for at least 10% of taxpayers.
Tax

Missouri Tax Amnesty Program Now in Progress

Missouri taxpayers have a small window of opportunity to come clean with the state taxing authorities while avoiding interest and penalties on back taxes. The Missouri Tax Amnesty Program, which went into effect last month, provides Missouri taxpayers with the right to file overdue state tax returns with no extra charge for interest and penalties. Tax returns filed under the amnesty program must be postmarked by midnight, October 31, 2002.To be eligible for amnesty, taxes must have been due on or before December 31, 2001.
Tax

Tax Talk Today Webcast to Tackle the Estate and Gift Tax

Talk Tax TodayWebcast Highlights New Laws, News Forms and New Places to File. Tax Talk Today will assist tax professionals and their clients in better understanding changes to the estate and gift tax rule. The new Webcast, "Estate and Gift Tax Update," airs live from 2-3 p.m. EST on Tuesday September 10. In 2000, the IRS received 123,500 estate tax returns and examined 6 percent of these. With tax law changes increasing exclusions in 2002, practitioners will need to know where the IRS will be focusing audits.
Tax

WTO Wins Right to $4 Billion in Sanctions Against U.S.

The World Trade Organization (WTO) ruled last Friday that the European Union (EU) has the right to impose trade sanctions amounting to $4.043 billion on the U.S. to make up for tax breaks given to U.S. corporations that export products to European countries.The issue at task is a situation that occurs when a U.S.
Tax

Senate to Probe Tax Aspects of Accounting Settlements

Senate Finance Committee Chairman Max Baucus said his committee is reviewing rules that permit companies to take tax-deductions for settlements related to the recent wave of accounting scandals. Sen. Baucus is responding to a Wall Street Journal article that explained how huge tax breaks are softening the financial blow of the settlements. The Journal reported that government lawyers don't usually worry about whether or not a settlement is tax-deductible.

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