Tax news

Tax

Two More Plead Guilty in HealthSouth Case, IRS Joins Probe

And then there were 14. Two more former HealthSouth officials agreed this week to plead guilty to conspiracy charges as part of what investigators say is a $2.5 billion accounting fraud. Richard Botts, 45, former senior vice president in the tax department, and Will Hicks, 39, former vice president of investments, join 12 of their former colleagues who formerly pled guilty in the case — including the only five people to serve as the company’s chief financial officer.
Tax

Offshore Amnesty Program Reports Success Despite Bad Press

The Offshore Voluntary Compliance Initiative (OVCI) is reporting strong results. The program, designed by the U.S. Treasury Department to encourage wealthy individuals to pay taxes on income hidden in offshore banks, received some unwarranted bad press this week when two U.S. Senators misread a Treasury report and questioned the success of the effort.Earlier this year the IRS announced that more than 1,200 people had responded to the initiative, offering to report offshore income and pay the taxes, thus avoiding potential civil fraud charges and criminal prosecution.
Tax

House Considers Tax Break For Businesses

House Ways and Means Committee Chairman Bill Thomas (R-CA) has introduced a bill that would provide at least $120 billion in tax relief for businesses over the next 10 years.Congress is under pressure from the World Trade Organization to discontinue a U.S. export credit that provides a subsidy to U.S. manufacturers who sell their goods abroad. Finding a means to replace the advantages provided by the export credit is the impetus for the proposed business tax relief legislation.Representative Thomas's bill, H.R.
Tax

More Delays in IRS Modernization Program

The Internal Revenue Service announced last week that a major milestone in the agency's massive modernization project will not be met. The first phase of the Customer Account Data Engine (CADE), a database that will eventually hold tax records of all of the nation's taxpayers, was scheduled to go online in August, 2003, after an earlier postponement from December, 2001.
Tax

GAO Tells IRS to Shape Up Regarding Excise Tax Management

The General Accounting Office has completed its review of the Internal Revenue Service's management of excise tax collection and distribution, and the news is not good for the IRS. Several problems exist with the excise tax program, and the GAO has offered recommendations for solving those problems.The federal government assesses excise taxes on various services, collects those taxes, then transfers the money to appropriate trust funds. Each year nearly $70 billion is collected in federal excise taxes.
Technology

IRS Makes Paying Taxes Online Easier

The Internal Revenue Services continues to try to find ways to meet its mandated goal of getting 80% of American taxpayers filing tax returns electronically by 2007. The latest stimulus to that plan includes improvements on the IRS's electronic tax payment Web site.The Web site, EFTPS-OnLine, or Electronic Federal Tax Payment System, gives taxpayers a location on the Internet where they can make tax payments and review their payment history.
Community News

Privacy Advocates Cry 'Foul' Over IRS Tactics

In the same week that the IRS has won a court ruling demanding that a CPA firm turn over tax shelter client information, the Service has come under fire for its own practices that seemingly compromise taxpayer privacy.Washington, D.C.-based Insight Magazine has published an investigative report chronicling the details of an IRS-H&R Block co-marketing effort from a couple of years ago that has left many
Tax

Child Tax Rebate On Its Way

The first wave of checks representing the Child Tax Rebate, a result of the Jobs and Growth Tax Relief Reconciliation Act of 2003, is on its way. Altogether, approximately 25 million checks will be mailed in this rebate program.The tax rebate checks, which represent an advance payment on tax benefits that will be available on next spring's income tax returns, will be mailed in three batches. The first batch goes out this week in Friday's mail.
Community News

Tax Advisers Lose Another Layer of Client-Adviser Privilege

In the continuing battle between tax advisers and the IRS regarding turning over taxpayer records of those involved in tax shelters, it seems the advisers are losing. A federal appeals court ruled yesterday that BDO Seidman must turn over the names of clients who purchased certain tax shelters from the firm.BDO has been embroiled in a privacy-based legal battle with the IRS for over a year.
Tax

Congress Tries Last Minute Push to Expand Child Tax Credit

The Senate is offering a compromise, and Democrats promise negative publicity, but House Republicans appear to be holding out for an expanded Child Tax Credit that seems unlikely to make it into law this summer.The U.S. House and Senate have been at odds over efforts to further expand the recently expanded Child Tax Credit so that it includes low-income families who would receive the credit as a tax refund whether or not they paid tax to offset the credit.
Tax

EFTPS-OnLine Gets Major Upgrade

The Internal Revenue Service announced that the Internet version of the Electronic Federal Tax Payment System (EFTPS), the EFTPS-OnLine Web site, has undergone a major upgrade to include several new improvements to help taxpayers.The changes will provide users with more than a half-dozen new features, ranging from more convenience for scheduling payments to expanded ability to track payment history.
A&A

IRS Issues Temporary Regulations on S Corporation ESOPS

The Treasury Department and the IRS have issued temporary and proposed regulations to shut down abusive arrangements involving certain employee stock ownership plans (ESOPs) holding stock in S corporations.
Technology

Internet Taxes on the Road to Extinction

The House Judiciary Committee voted to approve legislation that would permanently extend the moratorium on Internet access taxes. The bill must now be approved by the full House before it proceeds to the Senate.Meanwhile the Senate Commerce Committee indicated it will not attach the issue of sales tax on Internet purchases to the Internet tax moratorium legislation.
Community News

Ernst & Young Faces More Tax Shelter Headaches

The Internal Revenue Service is doing its best to keep Big Four firm Ernst & Young in the news this summer. The federal taxing agency is investigating a particular shelter devised and marketed by E&Y. Millions of dollars from many high profile executives could be at stake.Earlier this month, the IRS won a $15 million settlement from E&Y as part of an agreement that the accountants would launch a new level of integrity associated with the tax shelter services provided to clients.
Tax

Study Shows States Lose Tax Dollars Through Corporate Shelters

According to the results of a new national study performed by the Multistate Tax Commission, state revenues from corporate income taxes decreased by more than a third during 2001.
Tax

IRS Issues Final Regulations on Catch-Up Contributions

The Internal Revenue Service has finalized its regulations relating to catch-up contributions to employer-sponsored tax-deferred retirement plans for taxpayers over age 50. The final regulations take the place of proposed regulations issued in the fall of 2001.Catch-up contributions to tax-deferred plans were introduced in the Economic Growth and Tax Relief Reconciliation Act of 2001. For 2003, eligible taxpayers may contribute as much as $2,000 as a catch-up contribution. The amount will increase by $1,000 each year until it reaches $5,000 by 2006.
Tax

NYC Mayor Takes on IRS Over Earned Income Credit Plan

New York City Mayor Michael Bloomberg has gone on record against the Internal Revenue Service's controversial plan to require pre-certification for certain recipients of the Earned Income Credit.In a New York Daily News interview this week, the mayor indicated his concern that the pre-certification process might "decrease filings by legitimate, eligible recipients." There are approximately 700,000 recipients of the Earned Income Credit (EIC) in New York City.
Tax

Senator Concerned By Unapproved Reorganization of the IRS

Senator Max Baucus (D-MT) has expressed continued concern over the actions of IRS Commissioner Mark W. Everson as he creates the team and shifts some of the organizational structure to help best run the Internal Revenue Service.Sen. Baucus expressed initial concern in a letter to Commissioner Everson which was co-sponsored by Senate Finance Committee Chairman Charles Grassley a couple of weeks ago.
Technology

Taxing Times Ahead: Digital Sales and The European Union

By, Torsten Fetzer, Director of Tax Research Department TaxwareOn 1 July 2003, a new European Union Directive [Directive 2002/38/EC and Regulation No. 792/2002 amending the Sixth VAT Directive (77/388/EEC)] comes into force with regard to the levying of Value Added Tax (VAT) on digital sales within the European Union.All companies outside the EU that are supplying certain specified digital goods and services to final consumers in the EU will be required to register with European tax authorities by July 2003 to collect value-added taxes (VAT).
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.

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