Tax news

Tax

U.S. Shows Willingness to Reform Auditing, Tax Policies Overseas

In recent months, tension has been rising between the U.S. and foreign governments over jurisdiction over accounting firm oversight, and perceived unfair corporate tax breaks. Now, U.S.
Tax

IRS Attacked on Interest Reporting Rule

Pressure on the Internal Revenue Service is growing as more lawmakers and lobbyists voice support to withdraw a regulation that would force U.S. banks to declare to the IRS any bank interest paid to non-U.S. citizens.Interest income paid by U.S. banks to nonresident aliens is not taxable in the United States. But a proposed regulation (REG-133254-02) would provide such information to the IRS.
Tax

IRS Issues Proposed Regulations Governing Corporations Filing Consolidated Returns

Provided by CCHThe IRS has issued proposed modifications to the consolidated return regulations under Code Sec. 1502 that relate to stock basis after a group structure change. The regulations affect corporations filing consolidated returns.Reg. §1.1502-31 applies if one corporation succeeds another corporation under the principles of Reg. §1.1502-75(d)(2) or (3) as the common parent of a consolidated group in a group structure change.
Tax

IRS Chief Counsel B. John Williams Resigns

provided by CCH"He did an excellent job, and taxpayers were extremely well served during his tenure as IRS Chief Counsel," said Treasury Secretary John Snow in a July 2 press release in response to IRS Chief Counsel B. John Williams's resignation. The move was unexpected, according to one Treasury representative, who noted that Williams worked tirelessly as Chief Counsel and that he will be missed.
Tax

Time to Celebrate (?) 60th Anniversary of Tax Withholding

This month marks the 60th anniversary of United States federal income tax withholding. While you may be dubious as to whether or not this is an event to celebrate, you may at least be interested in a bit of historical perspective about something all employees accept without question. It wasn't always that way.Prior to 1943, tax payments were made by only the wealthiest taxpayers who wrote a single check and mailed it with their tax return in time for the annual due date of March 15.
Tax

E&Y to Make $15 Million Settlement With IRS

As part of an agreement with the Internal Revenue Service, Big Four firm Ernst & Young will implement a new program that will ensure compliance with the law relating to creating and marketing of tax shelters, and the firm has agreed to make a $15 million non-tax deductible settlement with the IRS.The new E&Y Quality and Integrity Program will "ensure the highest standards of practice and ongoing compliance with the law and regulations," according to IRS Commissioner Mark W. Everson. Mr.
Tax

IRS Closes Door on Controversial Tax Shelter

Former Tyco International Ltd. Chairman Dennis Kozlowski really knew how to take advantage of tax laws. Now, however, others won't be able to follow in his footsteps. The Internal Revenue Service has closed a major loophole that will prevent many executives from sheltering certain types of income from taxation.Mr. Kozlowski reportedly used a technique that allowed him to defer income taxes for between 15 and 30 years by transferring company stock options to family partnerships. It is believed that Mr.
Tax

Tax Practitioners Have New Contact at IRS

The Internal Revenue Service has announced the appointment of Beanna J. Whitlock as director of National Public Liaison, a division of the agency that serves as a vital link to tax professionals and practitioners, business associations, taxpayer assistance groups and federal agencies.Whitlock, who assumed her post on June 30, has been a tax professional for 35 years and an enrolled agent since 1979.
Tax

H&R Block Settles Multi Million Dollar Class Action Suit

H&R Block has agreed to settle a massive class action suit in Texas.
Tax

Illinois to Add $45 Million to State Coffers With Estate Tax

Not waiting for the federal government to make a final decision on the fate of the federal estate tax, the Illinois legislature is preparing to add an estate tax on estates that exceed $1.5 million. The state expects to add approximately $45 million per year to its budget by enacting the estate tax.Illinois Governor Rod Blagojevich contends that the estate tax will only affect 158 Illinois residents. That being the case, the average tax taken from each resident's estate would be between $275,000 and $300,000.
Tax

IRS Employees Using Computers For Personal Mail, Pornography

Treasury Department inspectors have found that Internal Revenue Service employees are using government-provided computers for sending and receiving personal e-mail, reading the news, listening to music, and visiting pornography Web sites.During one one-week period last October more than 19 million government computers were used by IRS employees while working on government time to access more than one million so-called questionable items on the Internet.
Tax

Bill Would Allow IRS to Use Private Debt Collectors

With more than 40 states now using private collection firms to collect unpaid taxes, the federal tax agency could get the authority to contract out a portion of its collections, if a bill pending in the U.S. House of Representatives is approved.The House bill, introduced last month by Rep. Amo Houghton (R-N.Y.), would give the overtaxed tax agency the authority to farm out about $13 billion in tax collections to private agencies.
Community News

Outsourced Tax Processing Gains Popularity Among Accounting Firms

Business Process Outsourcing (BPO) is a popular current trend among many types of companies, and accounting firms, including the Big Four, are getting on the bandwagon.According to a survey by CFO Magazine and AMR Research, 68.3% of companies expect to increase outsourced services in the next year.Big Four firm Ernst & Young reports that it sent tax returns to its Indian office for processing this year. It is estimated that as many as 50 U.S.
Tax

Justice Department Cracks Down on Fraudulent Tax Schemes

The Department of Justice has banned sales of a controversial tax strategy book, arguing that the book is not protected by the First Amendment because it encourages the unlawful action of not paying income taxes. In a different case a federal judge ordered a Georgia man to stop promoting a slavery reparations tax credit and to turn over a list of his clients."The tax division is focusing on promoters of tax-evasion schemes," said Eileen J.
Practice Management

KPMG Feels Tax Shelter Heat on Several Fronts

Big Four accounting firm KPMG is in the spotlight this week as media focus turned to several incidents regarding KPMG's alleged misconduct with selling tax shelters.KPMG E-Mails Raise Concerns Over Tax SheltersThe Wall Street Journal is reporting today that internal KPMG e-mails show evidence of knowledge about possible flaws in various tax shelter products more than a year before they stopped selling the tax shelters in question.
Tax

Treasury Issues Guidance on Partnership Abuses

The United States Treasury Department and the Internal Revenue Service have issued regulations dealing with a tax shelter commonly known as "Son of Boss." The regulations address the tax treatment of the assumption of certain obligations by a partnership from a partner. The regulations ensure that temporary or permanent non-economic tax losses cannot be created by transferring these obligations to partnerships. "These regulations are part of our increased efforts to shut down abusive tax shelter transactions," stated Treasury Assistant Secretary for Tax Policy Pam Olson.
Tax

Treasury Department Sues One of Nation's Largest Law Firms

The Treasury Department, on behalf of the IRS, sued one of the nation's largest law firms, Dallas-based Jenkens & Gilchrist, on Thursday, demanding that the firm turn over information about clients who participated in potentially abusive tax shelters that were promoted by the law firm.The lawsuit was filed in U.S. District Court in Chicago against the Chicago office of Jenkens & Gilchrist.
Tax

House Passes New April 30 Tax Filing Deadline

Seeking new ways to encourage taxpayers to file their returns electronically, the House of Representatives on Thursday voted 252-170 to pass a bill that would change the deadline for filing annual individual income tax returns from April 15 to April 30. The catch is, the returns have to be filed electronically in order to take advantage of the new deadline.Lawyers and accountants have voiced opposition to the measure, indicating their concern that changing the date will only confuse taxpayers.
Tax

Beware New Child Tax Credit Scam

It didn't take the scammers long to start targeting potential recipients of this summer's Child Tax Credit rebate. The IRS is reporting incidents of a new telephone scam that may be gaining in popularity.The latest attempt to take advantage of confusing tax legislation is a telephone caller who tells an unwary individual that there is a quicker way to get this summer's tax rebate. Just provide your credit card number and you'll be charged $39.99 and your tax rebate will be on its way.
Tax

IRS Moves Forward With EIC Certification Plan

The Internal Revenue Service announced on Friday it would proceed with plans to implement a pre-certification procedure for certain potential recipients of the Earned Income Credit (EIC). The plan was originally announced in April, then quickly shelved when impassioned opposition was voiced.

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