Tax news

Tax

IRS Lowers Interest Rates For First Time Since January

The Internal Revenue Service has posted its new interest rates for the fourth quarter of 2003. The rates are lower across the board, which should make people owing back taxes happy. People receiving overdue tax refunds from the federal government will find that the interest they receive is going down as well.New interest rates go into effect October 1, 2003.
Tax

Taxpayers Face New Challenges When Reporting 2002 Capital Gains

Schedule D, Capital Gains and Losses, the tax form used to report sales of assets held as investments, is in for a facelift, and the test audience is not very pleased."This is a tax break that's going to cost you more in compliance and computing burdens – and, I don't know, maybe you'll have to buy a computer — than the break's going to give you," said Christopher Bergin, director of Tax Analysts, a nonprofit organization dedicated to promoting fairness, simplicity, and efficiency in taxation.Changes to the form for the Spring 2003 tax filing season will incorporate new tax rules tha
Tax

Business Taxes Paid to State and Local Governments Jumps in FY 2003

Businesses across the country paid nearly $400 billion in state and local taxes in fiscal year 2003—a $20.3 billion (5.3 percent) increase over fiscal year 2002, according to a new report from a business tax watchdog organization.The Council on State Taxation (COST) represents 550 corporations in an effort to "preserve and promote the equitable and nondiscriminatory state and local taxation of multi-jurisdictional business entities," according to its mission statement.
A&A

IRS Reminds Some Businesses of Retirement Plan Deadline

The Internal Revenue Service reminded approximately 750,000 small and mid-size businesses using "off-the-shelf" retirement plan documents that they must update their plans by Sept. 30, 2003. Businesses must formally adopt updates to maintain the tax benefits associated with retirement plans.The deadline is a result of rules that apply to so-called Master & Prototype (M&P) plans and Volume Submitter plans. These off-the-shelf retirement plans are IRS-approved templates intended to standardize and simplify the complex employee plan area.
Tax

TurboTax E-File Scam May Land Milwaukee Woman in Jail

A 24-year-old Milwaukee woman awaits sentencing after using TurboTax and the Internal Revenue Service's free file online tax preparation system to file 10 fake tax returns in an attempt to collect several thousand dollars in refunds.Shana Cooper pleaded guilty last Friday to four counts of forgery and one count of attempted theft-false representation. She also pleaded guilty to fraudulently accepting a Wisconsin homestead tax credit. She faces a possible 16 years in prison.
Tax

PCAOB Tackles Tax Shelters

In its top to bottom review of all aspects of the auditing business, the Public Company Accounting Oversight Board (PCAOB) has turned its attention to tax shelters.Created in the wake of corporate scandals at Enron, WorldCom and others, the PCAOB is charged with reforming the auditors who oversee publicly held companies. Most of those audit firms have until October 22 to register with the PCAOB, which will guarantee an inspection by the board.To date, just 440 audit firms—half the number who audited public companies last year—have registered.
Tax

Office of Professional Responsibility: A Roadmap For Ethical Practice

Paying taxes is one of the most important tasks Americans face every year. Many entrust tax preparers with their most intimate financial details, and ask them to represent them before the government. But who keeps the preparers prepared—and responsible? That’s the job of the new Office of Professional Responsibility, launched early this year by the Internal Revenue Service. The expanded group, which replaces the Office of Director of Practice, sets and enforces standards for responsible and ethical practice.
Community News

H&R Block to Set up Shop at a Wal-Mart Near You

The company that promises "Always low prices. Always," will soon be able to offer it's customers low cost tax preparation services while they shop.H&R Block Chairman Mark Ernst announced the latest developments on a distribution arrangement with Wal-Mart at Block's annual shareholder meeting this week.According to a company spokesperson, H&R Block will operate modular office units in over 850 Wal-Mart stores around the United States. The kiosks will accommodate up to three tax preparers at any one time.H&R Block also offers tax season preparation services at Sears, Roebuck & Co.
Tax

IRS Accused of Improperly Disposing of Tax Forms

An employee of Cincinnati's Metro Recycling Company has contacted the news department of a local television station with the information that he regularly finds old tax returns in the bottom of recycling bins that come from the Internal Revenue Service."They send in containers for our company and when we open them up this stuff in the bottom falls out," said the informant who wishes to remain unnamed.
Tax

More Details Emerge on Charitable Giving Bill

Provided by CCHThe House Ways and Means Committee may ease restrictions on the costs that foundations can apply toward a five-percent payout of their assets, according to a rough draft of the final Charitable Giving Bill of 2003 (HR 7). The House Ways and Means Committee plans to mark up the bill on September 9.CCH learned of the document's contents on September 8 from an Internet posting by a private group in Washington, D.C., which obtained the draft from House Ways and Means staff.
Tax

House Fails in Effort to Stop EIC Pre-Certification Program

Democrats in the House of Representatives failed last week in their attempt to prevent the Earned Income Credit (EIC) pre-certification program that was approved by the Internal Revenue Service last month.The pre-certification program, scheduled to go into effect in 2004, will affect an initial test group of 25,000 possible candidates for the EIC.
Tax

Treasury and IRS Issue Guidance on the Additional Bonus Depreciation Allowance

The Treasury Department and the Internal Revenue Service have issued temporary regulations providing detailed rules on the additional first-year or "bonus" depreciation allowance.As a result of recent amendments to the Internal Revenue Code, taxpayers may deduct an additional 30- or 50-percent first-year depreciation allowance for certain depreciable property. This depreciation allowance is in addition to the amount of depreciation otherwise allowable in the first year.
Tax

IRS Ruling Permits Pre-Tax Reimbursement For Non-Prescription Drugs

On Wednesday, the Treasury Department and the Internal Revenue Service announced new clarification of what expenses qualify for pre-tax reimbursement under health care flexible spending plans.
Tax

Treasury Department Investigators Find IRS Customer Service Inadequate

The good news is that taxpayers are using the 500 taxpayer assistance centers the Internal Revenue Service has set up around the country. The bad news is there’s about a 50-50 chance they will get incorrect answers to their tax law questions.The subjects of earned income tax credit, education credit and dependents generated the most incorrect answers from IRS employees, according to a study conducted by Treasury Department investigators between July and December of last year.
Education & Careers

Good News For Students From The IRS

IRS Press Release - Sept. 2, 2003 Worried about the rising cost of tuition? Well, the IRS has good news for students that may provide you with a little extra money while you're in school and even after graduation.Students are entitled to as much as $5,250 in employer-provided educational assistance -- tax free! This tax benefit applies to both undergraduate- and graduate-level courses.Some people may deduct up to $3,000 of qualified higher education expenses, even if they don't itemize deductions on Form 1040, Schedule A.
Tax

Teachers Should Save Receipts for Educator's Deduction

IRS Press Release - Sept. 2, 2003 As the new school year begins, the Internal Revenue Service reminds teachers and other educators to save their receipts for purchases of books and classroom supplies. These out-of-pocket expenses may lower their 2003 taxes.The deduction is available to eligible educators in public or private elementary or secondary schools.
Education & Careers

Back-to-School Tax Breaks, Educator's Deductions

Another school year is in full swing. Whichever side of the desk you sit on, you may find some tax benefits waiting for you.
Tax

Tax Lawyers Exit Big Four, Head For Law Firms

Six high profile tax attorneys have left the Washington National Tax Services office of Big Four firm PricewaterhouseCoopers, and have landed at DC law firm Shaw Pittman. Is this the start of a trend? Shaw Pittman thinks it is."We are thrilled to be on the cutting edge of the trend of top attorneys moving from a Big Four accounting firm to an AmLaw 100 law firm," said Stephen B. Huttler, managing partner at Shaw Pittman. The firm has just added the six lawyers to its national tax law practice.Michael F.
Tax

Virginia Tax Amnesty Program Underway

The State of Virginia has launched a tax amnesty program with hopes of padding the coffers of an overstretched budget. The program, which runs from now until November 3, offers some enticing incentives for those who owe back taxes to the state.Amnesty for Delinquent Taxpayers allows Virginia taxpayers the option of paying back taxes during the amnesty program. Penalties on such payments will be waived and interest will be cut in half. If taxpayers can't pay the full amount of back taxes, they can apply the amnesty incentives to just the part of tax that they are able pay.
Tax

Debit Cards Facilitate Use of Flexible-Spending Accounts

Flexible spending plans offered by some corporations just got a whole lot easier to use with new rules allowing debit cards to track the use of pretax dollars employees put away to pay for medical expenses not covered by health plans. The IRS recently permitted the use of debit cards to cut down on the paperwork usually involved in taking advantage of these flexible-spending plans offered by many employers. These plans allow employees to put a portion of their pretax salary away for anticipated medical expenses during the year.

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