Tax news

Tax

'Gimme Tax Shelters' - Free Tax Talk Today Webcast

In a special free two-hour Webcast co-sponsored by the IRS, Tax Talk Today will explain to tax professionals and financial planners the new ways that the IRS is looking at tax shelters used by corporations. The Webcast, "Gimme Tax Shelters," airs live from 2-4 p.m. ET on Tuesday, October 15, 2002. This program is of particular interest to practitioners whose practice includes tax planning strategies for both large and mid-size corporations, and who represent these clients before the IRS.
Tax

BDO Ordered to Give Tax Shelter Records to IRS

The Internal Revenue Service has been given clearance by a federal judge to obtain tax shelter records and related client lists from accounting firm BDO Seidman. Last July, the Justice Department had filed suit against both KPMG and BDO Seidman in an attempt to gain access to documents and client lists relating to tax shelters sold by the firms.The IRS will presumably use the lists of BDO clients participating in tax shelters as a starting point for choosing audit victims.
Tax

Lawmakers Want Tax Disclosures Tougher Than FASB's

In a letter to President Bush, Senate Finance Committee ranking member Charles E. Grassley urged a sweeping review of disclosure requirements related to corporate income taxes. He wants more details on IRS Schedule M-1, and he wants someone other than the Financial Accounting Standards Board (FASB) to decide what is adequate tax footnote disclosure for financial statements.Sen.
Tax

Taxpayer Advocacy Panel Members Chosen

The Treasury Department and the Internal Revenue Service have announced the selection of 102 members of the national Taxpayer Advocacy Panel (TAP), a group made up of tax professionals, professors, retired military, small business owners, and one state legislature member.
Tax

October 15 Tax Deadline Nears

The last significant deadline for individual taxpayers occurs next week on October 15 when individual tax returns on final extension are due. Taxpayers who requested an additional extension beyond August 15 and received approval from the Internal Revenue Service have until midnight October 15 to file their 2001 tax returns without risk of penalty for late filing. The late filing penalty is 5% per month of any unpaid tax, up to a maximum of 25%.All taxes owing for 2001 should have already been paid by last April 15 when the first extension request was filed.
Tax

Justice Department Clears Path For Tax Consortium

The Department of Justice has given its approval for several private-sector tax preparers and tax software companies to form a consortium that will offer free tax filing services through the IRS Web site. The free services will be offered to at least 60% of the nation's taxpayers as part of the IRS plan to have 80% of U.S. taxpayers filing electronically by 2007.Under the terms of the plan, participating companies will each agree to provide free services to a minimum of 10% of taxpayers.
Tax

IRS Cracks Down on Three Tax Shelters

The Internal Revenue Service has announced that participants in three highly-complex tax shelters have a limited time span in which to settle up with the government and avoid the cost of litigation.The three targeted shelters are tax avoidance devices frequently offered by promoters who gain fees for selling interests in the shelters.
Tax

Isle of Man to Provide Tax Details to US

The Isle of Man has signed a bilateral agreement with the United States to exchange information on tax matters between the two countries.The move follows similar agreements between the US and the Channel Islands in September.
Tax

IRS Ruling May Help Retirees

The Internal Revenue Service has issued Revenue Ruling 2002-62 that may help certain taxpayers whose retirement funds are at risk of being depleted by a drop in stock values.
Tax

KPMG Fights Back at Hearing on Tax Promoter Issues

KPMG fought back today in a hearing in federal district court in Washington DC. The hearing is viewed as a testing ground for the extent to which tax practitioner privilege serves as a defense against summonses issued by the Internal Revenue Service (IRS). Earlier this year, the summonses received wide press coverage when the Department of Justice (DOJ) revealed the names of clients, while trying to enforce summonses issued to KPMG.
Tax

IRS Criticized For Not Informing Taxpayers of Refunds

A bipartisan group of senators has written a letter to Treasury Secretary Paul H. O'Neill complaining of the IRS policy of not informing lower income taxpayers of their eligibility to claim a portion of the Child Tax Credit as a refundable credit. According to the group, in 2001 there were 611,560 U.S. households that were eligible but failed to claim a Child Tax Credit, and nearly 75 percent of those households earned less than $25,000 for the year. The Child Tax Credit amounted to $600 per eligible child in 2001.
Tax

IRS Points Finger at Andersen

The Internal Revenue Service has filed a petition in the Chicago federal court to force accounting firm Arthur Andersen LLP to produce documents relating to tax shelters sold by the firm. The IRS claims it has evidence that the shelters produced "likely improper tax deductions" for participants and that those deductions ranged from $10 million to $1.6 billion.
Tax

Nevada Tax Scammers Deal Themselves Some Prison Time

Four casino workers at the Virgin River hotel-casino in Mesquite, Nevada have been sentenced after pleading guilty to criminal charges stemming from underreporting tip income on their income tax returns.
Tax

IRS Updates Per Diem Travel Rates

The Internal Revenue Service has issued Revenue Procedure 2002-63 providing new per diem rates for employee expenses incurred while traveling away from home for work. The rates can be used by businesses wishing to reimburse employees for unsubstantiated lodging, meal, and incidental expenses while traveling away from home.Employers may reimburse employees for travel related expenses using the new per diem rates and the expenses will be deemed substantiated.
Tax

Archer MSA Pilot Program Continues

The Internal Revenue Service has announced plans to continue the Archer Medical Savings Account (MSA) pilot program beyond the planned cut-off date of October 1, 2002. Originally the IRS indicated it would only allow 750,000 MSAs to be created under the pilot program. Only 21,079 MSA returns were filed for 2001, and the number of MSA returns expected to be filed for 2002 is 59,151.Taxpayers with MSA accounts enjoy tax treatment similar to Individual Retirement Arrangements (IRAs) for their medical accounts.
Community News

IRS Closes Tax Shelter Loophole

The Internal Revenue Service issued Notice 2002-65 that will close the tax loophole that enables certain types of tax shelters that have gained publicity lately. The IRS estimates that last year alone approximately 87,100 taxpayers used a tax device such as the one addressed in this Notice.The premise behind this tax avoidance device is to move income through various entities such as partnerships and S corporations in such a way as to defer tax payment and in some cases avoid taxes altogether.
Tax

IRS Announces Increase in Interest/Dividend Threshold

Internal Revenue Service tax form Schedule B, "Interest and Dividend Income," will become a distant memory for more than 15 million taxpayers starting with the 2002 tax returns that will be due in the Spring of 2003.
Tax

IRS Commissioner Rossotti's End-of-Term Report

Internal Revenue Service Commissioner Charles O. Rossotti's five-year term will end in November 2002. In anticipation of that event, Mr. Rossotti has filed an end-of-term report with the Treasury Department's IRS Oversight Board. "We are winning the battle but losing the war," said Mr.
Tax

New Study Highlights Bad News For Seniors With IRAs

A study released last week by the Joint Economic Committee (JEC) of the House of Representatives points out problems with the current law requiring mandatory withdrawals from retirement plans which, in a declining stock market, result in seniors being required to reduce their retirement holdings much faster than they originally anticipated.Hefty penalties on non-mandated withdrawals from Individual Retirement Accounts and other tax-deferred accounts such as 401(k)s discourage seniors from withdrawing their money when the market conditions are conducive to sound investment strategy.
Tax

Ex-CEO Gets Jail Time For Corporate Kickback Scheme

Although recent legislative reforms have focused on public companies, headlines show the fallout from corporate greed also affects executives and auditors of private companies. Last week, the founder and former CEO of Conair Corporation was sentenced to 20 to 37 months in jail for tax evasion.The tax evasion took the form of a multi-million dollar kickback scheme involving several vendors.

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