Tax news

Tax

States Back Offshore Compliance Effort

As the deadline for the Internal Revenue Service’s Offshore Voluntary Compliance Initiative (OVCI) draws near, 10 states have announced they will grant special consideration to taxpayers who apply to the initiative. If individuals amend their state returns and pay all tax, penalties and interest by October 15, they can avoid state prosecution.“The actions by these states send another strong signal to people improperly using offshore credit cards.
Tax

Extensions of Time to File Your Tax Return

If you can't meet the April 15 deadline to file your tax return, you can get a four-month extension of time from the IRS. The extension will give you extra time to get the paperwork in to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.You must make an accurate estimate of any tax due when you request an extension.
Tax

Notices — What To Do

It’s a moment any taxpayer dreads. A letter arrives from the IRS — and it’s not a refund check. But don’t panic. Many of these letters can be dealt with simply and painlessly.Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.
A&A

IRS Targets Abusive Employee Leasing Arrangements

The Internal Revenue Service and the Treasury Department are warning taxpayers against participating in certain offshore deferred compensation arrangements involving domestic and foreign employee leasing companies.Taxpayers who are current or past participants in such arrangements are encouraged to apply to participate in the Offshore Voluntary Compliance Initiative (OVCI) that IRS announced on Jan. 14 of this year.
Tax

Ten Ways to Invite a Tax Audit

When most taxpayers file their tax returns for the previous year, they send them with a hope that they made no mistakes and that the only additional communication they will receive from the IRS is a refund, if they’re due one. Yet, millions of taxpayers will hear from the IRS because they made a common, human-error mistake or if their returns show less income than the records filed by their employers and financial institutions. The National Association of Tax Professionals (NATP) has developed a list of ten common ways to invite a tax audit and attract the attention of the IRS.
Tax

Officials Consider Relaxing Rules to Fire IRS Workers

In 1998, Congress enacted stricter rules for terminating Internal Revenue Service (IRS) employees, a move that was meant to strengthen taxpayers’ rights. Now, the Bush administration and key legislators want to lessen some of the rules, which they say have contributed to low morale and a decrease in tax law enforcement.Since passage of the IRS Restructuring and Reform Act of 1998, 71 IRS employees have been fired. The majority of the terminations were because employees failed to file a tax return on time or underreported their income.
Tax

IRA Contributions Can be Made Until Tax Filing Deadline

If you haven’t put any money into an Individual Retirement Arrangement (IRA) for tax year 2002, or if you’ve put in less than the maximum allowed, you still have time. You can contribute to either a traditional or Roth IRA until the April due date of your tax return.Be sure to tell the IRA trustee that the contribution is for 2002. Otherwise, the trustee may report the contribution as being for 2003, when it is received.You may contribute up to $3,000 of your earnings for 2002 or up to $3,500 if you are age 50 or more.
Tax

IRS Provides Tax Info And Help For Military Families

IRS Press ReleaseThe Internal Revenue Service has created a new section on its Web site containing important information to help ensure members of the U.S.
Community News

IRS Shows Support For Free File Pop-Up Ads

Just last week, consumer groups from around the country complained to the Treasury Department about the perceived commercial misuse of consumer information by the companies participating in the IRS’ Free File program. In a Senate hearing this week, an IRS representative said they are comfortable with the organizations trying to "upsell" their services.Dale F.
Tax

New U.S. - U.K. Tax Treaty Eliminates Dividends Withholding

This week, Treasury Secretary John Snow and Tony Brenton, the United Kingdom’s Acting Ambassador to the United States, announced that a new income tax treaty between the two countries would go into effect starting April 1. Mr. Brenton commented that the agreement’s start date coincided with the start of the tax year in the United Kingdom. According to Mr. Snow, the purpose of the treaty is to eliminate tax barriers and promote cross-border trade and investment.
Tax

What to do if You Can’t Pay Your Taxes

If this year’s tax filing deadline will be a “pay” day for you and you cannot pay the full amount that you owe, you should still file your return by the due date and pay as much as you can.You can charge your taxes on your American Express, MasterCard, Visa or Discover Card. To pay by credit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. The service providers charge a convenience fee based on the amount you are paying.
Tax

Filing Deadline And Payment Options

If you’re trying to beat the tax deadline, the IRS says there are several options for last-minute help. If you need a form or publication, the IRS Web site has copies available. If you discover you need more time to finish your return, get a four-month extension with Form 4868. And if you have trouble paying your tax bill, the IRS has several payment options available.To get the automatic extension, file Form 4868, Application for Extension of Time to File U.S.
Tax

Some Helpful Post Tax Season Tips!

Ah, a breath or fresh air...Busy season is nearing its end and that means a time to relax and enjoy spring...Not so fast. Can you see the surface of your desk? Do you have papers on the floor, in piles on your desk, everywhere in your office? April 13- 19 is National Organize Your Files Week. So set aside some time over the next month to clean out your files and office. Set aside a specific amount of time for the office cleaning task. Rather than trying to squeeze the job in between phone calls, designate specific time for this job.
Tax

Companies do Pay Substantial Taxes, Even on Inflated Earnings

Just because a company inflates its earnings by a couple hundred million doesn’t mean it won’t pay the taxes on those bogus earnings.
Practice Management

Grassley Urges Caution When Using Paid Tax Preparers

Disturbed by what he heard at a hearing on taxpayer issues, Senator Charles Grassley, Chairman of the Senate Finance Committee, has issued a statement urging taxpayers to exercise caution when hiring a paid tax preparer.Sen. Grassley’s caution comes after hearing from the General Accounting Office who estimated that over half of US taxpayers who overpay their taxes had employed the services of a paid tax preparer.
Tax

Where to File Your Return

Once you complete your 2002 federal tax return, you can either file it electronically or mail it to the IRS. If you choose to mail your return, be sure to read your tax instruction booklet carefully to find the address of the IRS center for your area.For this year, the IRS has changed some of its filing locations.
Tax

Deadline Nears For Offshore Tax Evaders

April 15 is the last chance for people who have used offshore payment cards or other offshore financial arrangements to avoid U.S. taxes to take advantage of the Offshore Voluntary Compliance Initiative (OVCI).Eligible taxpayers who step forward will receive the initiative’s penalty relief.
Tax

Intuit Expands Free Tax-Filing Program to States

Arizona is jumping on the free tax-filing bandwagon. Last Friday Gov. Janet Napolitano announced that the state had formed a public-private partnership with Intuit, Inc., which will allow qualified Arizona taxpayers to prepare and pay their state taxes electronically at no charge.Arizona’s program is similar to the Free File Program, a partnership between the Internal Revenue Service (IRS) and 17 software makers. Intuit, which is also part of the federal software alliance, will be donating its TurboTax software for Arizona’s program.
Tax

Top Ten Craziest Sales Tax Laws

In true Late Show fashion, here are the "Top Ten Craziest Sales Tax Laws" (courtesy of Taxware)In Minnesota, non-edible cake decorations are taxable, but edible cake decorations are exempt.In California, chewing gum is considered candy, or a "nonfood" product, and taxed at between 7.25 - 8.75%.
Tax

How to Prepare Your Tax Returns For Mailing

Although electronic filing is becoming more and more the filing method of choice for taxpayers, there are still many who file paper returns. If you are one, the IRS recommends that you take a few minutes to make certain that all information is complete and accurate before sealing that envelope. This simple precaution could help you avoid mistakes that may delay your refund or result in correspondence with the IRS.Here are just a few items to complete prior to mailing your tax return:Sign your return. Your federal tax return is not considered a valid return unless it is signed.

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