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Ten Tax Tasks For December From The PICPA

April 15 may be the best-known tax date of the year, but if you want to save on next year's taxes the Pennsylvania Institute of Certified Public Accountants recommends that you start planning in December. Here are 10 tasks to consider before year-end to minimize your 2003 tax bill.Balance Gains and LossesTally up your investment winners and losers for 2003.

SEC Fee 'Just Another Tax'

In an effort to pump more money into the Securities and Exchange Commission (SEC), fund managers are demanding that the so-called "SEC fee" go entirely to the industry watchdog agency and not at all to the U.S. Treasury.The International Counsel Association of America is angry that a large part of the SEC fee has been appropriated in the past by the U.S.

Comprehensive Tax Guide Available at

The IRS comprehensive tax guide for individuals has been updated for tax year 2003 and is now available at IRS Publication 17, "Your Federal Income Tax," has been published annually by the IRS for more than 60 years and has been available on the IRS Web site since 1996.Publication 17 has been updated with important changes for 2003, including tax breaks for men and women serving in the military resulting from the Military Family Tax Relief Act of 2003, which was signed into law on Nov. 11.

IRS Helps Military Personnel Get New Law’s Tax Breaks

The Internal Revenue Service is helping taxpayers use a new law providing income exclusions for death benefit payments and certain home sales. Both provisions are retroactive, so some qualifying taxpayers must file amended returns to claim these tax breaks. The IRS asks them to put the words “Military Family Tax Relief Act” in red at the top of such returns to speed processing.The new law doubled the gratuity paid to survivors of deceased Armed Forces members to $12,000, made the entire amount tax-free and made the changes effective for deaths occurring after Sept. 10, 2001.

PCAOB Vows to Look For Abusive Tax Shelters

The new accounting regulatory board plans to take a hard look at abusive tax shelters and a “very heavy-handed” approach with the firms that sell them.William McDonough, head of the Public Company Accounting Oversight Board (PCAOB), said in Senate testimony last week that policing tax shelters was not Congress' motive in establishing the PCAOB in the 2002 Sarbanes-Oxley Act. However, he said PCAOB staffers will look for evidence that firms have marketed abusive tax shelters during their annual inspections of major accounting firms.

Texas Society of CPAs Speaks Out About Foreign Outsourcing Trends

In a recent letter to Scott Voynich, Chairman of the Board of Directors for the AICPA, the Executive Board of the Texas Society of CPAs has expressed concern over the growing trend of CPAs outsourcing services to foreign countries. You may read and comment on this trend below. AccountingWEB members may add their comments below. Just click on the orange comment button below this article and add your comments and thoughts on this issue. Letter to the AICPANovember 11, 2003S.

IRS Announces Audits of Credit Counseling Companies, FTC Files Suit

The Internal Revenue Service (IRS) is auditing more than 30 nonprofit credit counseling companies as part of a wide-ranging investigation into business practices in the $1 billion industry."This is an unprecedented effort by the IRS and one that is fully justified," said IRS Commissioner Mark Everson.

Combating Abusive Tax Shelters: A Summary

As part of a comprehensive strategy to ensure all taxpayers pay their fair share, the Treasury Department and the IRS continue to move aggressively to combat abusive tax avoidance transactions.This multi-pronged strategy includes requiring prompt disclosure of potentially abusive transactions by taxpayers and promoters, providing more timely analyses of these transactions and publishing legal guidance as early as possible.

GAO Report: IRS Has 'Material Weaknesses' in Security Controls

The Internal Revenue Service and other Department of Treasury agencies, continue to have "material weaknesses" in security controls designed to protect the confidentiality, integrity and availability of their systems, a new General Accounting Office (GAO) report concludes.

KPMG’S Statement Regarding Hearing in the “U.S. Tax Shelter Industry”

KPMG LLP issued the following statement in regard to a hearing today of the U.S. Senate Permanent Subcommittee on Investigations, at which current and former KPMG partners testified on the subject of tax services formerly offered by the firm: At the invitation of the Subcommittee, KPMG partners and former partners participated in the hearing today examining the activities of accounting firms, banks, investment advisors and law firms in offering aggressive tax strategies to their clients in the late 1990s and early 2000s.

IRS Issues New Guides For Charitable Organizations

The Internal Revenue Service has published two new brochures to help charities understand the tax laws conferring tax-exempt status.One brochure is designed to help prospective charities apply for tax exemption under the tax law.

Software Firms, California at Odds Over Free E-Filing Services

Companies that sell tax-preparation software are viewing California’s year-old, Internet-based tax system as an unfair threat to their business.Intuit Corp., which makes TurboTax and offers free e-filing of state tax returns in California, has said it would stop offering the free service if the state continues to provide a competing product.

IRS Zeros In On Executive Pay

As executive paychecks and perks have exploded, so have concerns about the taxes executives pay. That’s according to the Internal Revenue Service, which discussed its efforts to make sure executives are in compliance with tax laws on Thursday’s Tax Talk Today Internet broadcast. "Based on IRS experience, basic compliance laws have not been aggressively reviewed for years, and people may have forgotten some of the fundamentals.

KPMG'S Statement Before The Committee, November 18

Representatives of KPMG are here today at the Subcommittee's invitation to discuss the tax services offered to KPMG clients in the past. Our representatives are prepared to provide the Subcommittee information regarding these complex tax strategies. KPMG would like to take the opportunity to place this issue into an appropriately broader context. There are four main points the firm would like to call to your attention:The tax strategies being discussed today represent an earlier time at KPMG and a far different regulatory and marketplace environment.

Senate Probe Targets KPMG Tax Shelters, KPMG Responds

Accounting firm KPMG’s efforts to market four questionable tax products will be the focus of two days of Senate hearings this week. More below...Senate Probe Targets KPMG Tax Shelters, KPMG Responds KPMG'S Statement Before The Committee, November 18KPMG’S Statement Regarding Hearing on the “U.S. Tax Shelter Industry”More below...

Recruiting And Training Tax Preparers

By: Charles E. McCabeWhen I began my career in the tax business over 30 years ago, getting good tax preparers was not very difficult. My employer, H & R Block, Inc., had developed their income tax school a few years earlier as an ingenious method of recruiting and training tax preparers to support their rapid expansion. As a district manager and later a regional director, I was able to find plenty of good people who were willing to pay to take the Basic Income Tax course with no guarantee of employment.

IRS Fines Tax Preparers $2.4M, But Doesn’t Collect

The Internal Revenue Service has fined tax preparers over $2.4 million in the past two years, but has collected only a fraction of that amount, according to congressional auditors.The General Accounting Office (GAO) said IRS collected just $291,000, or 12 percent of the penalties due.

Tax Moves to Make in 2003, Courtesy of The IRS

The Internal Revenue Service reminds taxpayers they have less than eight weeks to make their final financial moves for the 2003 tax year.Taxpayers can take the first step toward advance tax planning by reviewing tax law changes featured on the IRS Web site, A little advance planning now could save taxpayers time — and perhaps even money — later.For many families, tax planning means locating the IRS notice for their Advance Child Tax Credit. For teachers, it means keeping those receipts for school supplies they purchase with their own money.
Practice Management

IRS Expands Locations For Convention Expense Deductions

According to CCH, the IRS has updated the list of countries and locations included in the "North American area" for the purposes of the Code Sec. 274(h) convention expense deduction. Expenditures related to meetings and conventions in these locations generally can be deducted just as if they were held in the U.S. Comment. In today's global business environment, conventions and meetings are frequently held outside of the U.S. The IRS traditionally has taken a hard line toward deducting foreign convention expenses. Code Sec.
Community News

KPMG Separates Legal Services, Discussing Formation of New Legal Group

KPMG announced this week that it will stop providing full-scope legal services, and that its associated legal network – KLegal International – is to be discontinued.Member firms of the KLegal International network are now discussing the formation of a new legal grouping that will be completely independent of KPMG, and which will work with KPMG member firms - where appropriate - on a non-exclusive basis. The announcement reflects changed market conditions, including the U.S.


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