Tax news

Tax

Estate Tax Debate May Reach Compromise

Acknowledging that they may never be able to totally do away with the always-controversial “death tax,” Senate Republicans have been secretly considering a compromise. They are anxious to push the bill forward while they hold control of Congress and the White House.With the federal budget deficit soaring and President Bush’s economic policies increasingly coming into question, Sen.
Tax

Wealthy Art Collectors Forced to Pay Up For Avoiding Sales Tax

More than 100 collectors of art, jewelry and antiques have been forced to pay $16.2 million in unpaid sales taxes and interest in an investigation into tax avoidance in New York’s art world. The inquiry has resulted in five New York dealers pleading guilty to failure to collect sales taxes in recent months.
Tax

Senate Hears Testimony on Tax Shelter Schemes

Saying that Congress can’t write laws fast enough to keep up with those who find ways around them, Sen. Charles Grassley, chairman of the Senate Committee on Finance, took aim at those promoting and selling tax shelters at a hearing on Tuesday.
Tax

Law Firm Ordered to Turn Over Tax Shelter Client List

With Congress' attention turned squarely on trying to curb tax shelter abuse, the IRS has won permission from a federal court to force a law firm to reveal the names of their clients who have invested in tax shelters that may be abusive.Sidley Austin Brown & Wood, a Chicago-based law firm, was served a summons to turn over their client lists. The firm is only the second law firm that has been ordered to cooperate with the IRS in its tax shelter investigations.
Tax

Setback For IRS is Win for KPMG

In a blow to Justice Department attorneys seeking to better protect consumers from promoters of risky tax shelters, a U.S. Magistrate has ruled that KPMG LLP has grounds to withhold documents it says are privileged from Internal Revenue Service investigators. KPMG, the nation’s fourth largest audit firm, has been strongly criticized over its tax-shelter practice and the aggressive legal strategy it has used to defend it. The firm handed over hundreds boxes of documents to the IRS, but withheld those the firm said were privileged. Retired U.S.
Tax

2004 Standard Mileage Rates Set — 800,000 More Businesses Eligible

The IRS has released the optional standard mileage rates to use for 2004 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.To reduce a recordkeeping burden, the IRS also announced that taxpayers who use no more than four vehicles at the same time for business purposes may use the standard mileage rate, starting in 2004.
Tax

IRS Announces Pension Plan Limitations For 2004

The Internal Revenue Service today announced cost‑of‑living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2004. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. It also requires that the Commissioner annually adjust these limits for cost‑of‑living increases.Many of the pension plan limitations will change for 2004.
Tax

Witching Hour Approaches for Florida Tax Amnesty Program

At midnight October 31, Florida closes the doors on its popular tax amnesty program and those who did not participate will face the wrath of the Florida Department of Revenue."This department will engage in a very substantial enforcement program for those that did not take advantage of this period," said Jim Zingale, director of the Florida Department of Revenue.The program, which was offered to Florida individuals and businesses, has raked in $35 million in back taxes and interest since it began on July 1, 2003.
Tax

IRS Cautions 'Quick Fixes' From Credit Counseling Organizations

The Internal Revenue Service, the Federal Trade Commission and state regulators issued a consumer alert for those seeking assistance from tax-exempt credit counseling organizations.Paying bills is never easy, but job loss, divorce or unexpected medical bills can be devastating to a consumer. Many consumers seek help from non-profit credit counseling organizations in managing their debt or "repairing" damaged credit.
A&A

SEC Exempts Two Reports From CEO & CFO Certification

With the threat of criminal prosecution, millions in fines and possible jail time facing them for signing off on corporate reports they know to be false, CEOs and CFOs have been leaving nothing to chance. They can breathe a little easier now that two reports have been taken off the list of those requiring their certification.The Securities and Exchange Commission staff announced last week at a corporate lawyer’s conference that employee benefit plan reports and reports known as 8-Ks will be exempt from certification by top corporate officers.
Tax

US Income Tax Celebrates It's 90th Birthday, Taxation Then and Now!

As the modern income tax marks its 90th year, the Tax Code is more complex than ever, notes CCH. While tax bills will be smaller for many people in 2003 thanks to tax legislation passed this year, the Internal Revenue Code is doing anything but shrinking. In fact, as the modern income tax law marks its 90th anniversary in October, it’s more complex than ever.
Community News

UAL Seeks IRS, Congressional Assistance With Pension Fund Shortfalls

Cash-strapped UAL, parent company of United Airlines, put employees on notice that it has asked the Internal Revenue Service to allow waivers to its original plan to restore its pension plans to 100 percent funded status. Earlier this year Northwest Airlines was allowed by the IRS to put off $454 million in payments it was required to make to its pension plans this year. Instead Northwest will make those contributions over five years beginning next April.
Tax

New IRS Fax Guidelines Ease Burden on Taxpayers

The Internal Revenue Service has announced new facsimile guidelines that will make it easier for taxpayers and tax professional to correspond with the agency. The new guidelines will expand the list of documents and information the IRS will accept via fax.The expanded guidelines stem from recommendations from tax professional organizations. The changes are aimed at reducing the burden on taxpayers and practitioners and shortening the time it takes to resolve tax inquiries and cases.
Tax

It's Not Too Soon to Start Planning For 2004 Income Taxes

USA Today published some tips and reminders this week for taxpayers already thinking about 2004, as well as a reminder to tax procrastinators that next Wednesday, October 15, is the due date for 2002 federal income tax returns on final extension.While official 2004 tax brackets have yet to be published, analysts have already projected what the new brackets will look like.Experts suggest that a close examination of the tax brackets provides useful information.
Community News

Klotsche Joins IRS to Help Combat Abusive Tax Shelters

John C. Klotsche, a former chairman with leading international law firm Baker & McKenzie, will join the Internal Revenue Service to help coordinate the agency’s efforts to combat abusive tax shelters and improve enforcement processes.He will serve as Senior Advisor to IRS Commissioner Mark W. Everson and will also work with Mark E. Matthews, the Deputy Commissioner for Services and Enforcement.
A&A

New IRS Material Helps Retirement Plans Stay Compliant

The Internal Revenue Service recently released new materials, including a CD-ROM, to help small businesses and plan administrators understand how to keep employee retirement plans eligible for tax-favored status.These materials, in various formats, explain the IRS programs available to assist employee-retirement plan administrators navigate the complex tax laws. The materials also explain how to correct errors in the plans, often without even having to notify or correspond with the IRS.
Tax

IRS Investigates Corporate Donations of Patents

Tuesday's Wall Street Journal reported that the Internal Revenue Service has begun scrutinizing corporate donations of patents, indicating that deductions for such donations may be inflated beyond the true value of the patents.It is common practice for companies to take tax deductions for donations of patents to universities and other research facilities.
Tax

IRS Certifies Toyota Prius For Clean Fuel Vehicle Deduction

The Internal Revenue Service has certified the 2004 Toyota Prius as being eligible for the clean-burning fuel deduction. The certification means taxpayers who purchase a new hybrid vehicle may claim a tax deduction of up to $2,000 on Form 1040.Federal tax law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel.
Community News

IRS Announces Changes to Tax Return Centers For Ten States

The Internal Revenue Service is urging tax professionals to be aware of changes that will affect where they send tax returns and payments for clients in 10 states starting in 2004. The changes are a result of redistributing workload among the 10 IRS processing centers to provide better service.Tax professionals whose clients are in the Metro New York area and Alabama, Arkansas, Delaware, Michigan, Montana, Rhode Island, Tennessee, Utah and Wyoming will be filing their returns with different IRS centers during the 2004 filing season.
Tax

GAO Questions IRS' Ability to Evaluate EIC Pilot Program

A controversial IRS program that will require proof of eligibility to receive earned income credits is coming under fire from the General Accounting Office, which has issued a report questioning the ability of the IRS to effectively evaluate the success of the pilot program.Unlike recipients of other benefit programs, Earned Income Credit recipients generally receive payments without advance, formal determinations of eligibility.

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