Tax news

Tax

Bill Would Allow IRS to Use Private Debt Collectors

With more than 40 states now using private collection firms to collect unpaid taxes, the federal tax agency could get the authority to contract out a portion of its collections, if a bill pending in the U.S. House of Representatives is approved.The House bill, introduced last month by Rep. Amo Houghton (R-N.Y.), would give the overtaxed tax agency the authority to farm out about $13 billion in tax collections to private agencies.
Community News

Outsourced Tax Processing Gains Popularity Among Accounting Firms

Business Process Outsourcing (BPO) is a popular current trend among many types of companies, and accounting firms, including the Big Four, are getting on the bandwagon.According to a survey by CFO Magazine and AMR Research, 68.3% of companies expect to increase outsourced services in the next year.Big Four firm Ernst & Young reports that it sent tax returns to its Indian office for processing this year. It is estimated that as many as 50 U.S.
Tax

Justice Department Cracks Down on Fraudulent Tax Schemes

The Department of Justice has banned sales of a controversial tax strategy book, arguing that the book is not protected by the First Amendment because it encourages the unlawful action of not paying income taxes. In a different case a federal judge ordered a Georgia man to stop promoting a slavery reparations tax credit and to turn over a list of his clients."The tax division is focusing on promoters of tax-evasion schemes," said Eileen J.
Practice Management

KPMG Feels Tax Shelter Heat on Several Fronts

Big Four accounting firm KPMG is in the spotlight this week as media focus turned to several incidents regarding KPMG's alleged misconduct with selling tax shelters.KPMG E-Mails Raise Concerns Over Tax SheltersThe Wall Street Journal is reporting today that internal KPMG e-mails show evidence of knowledge about possible flaws in various tax shelter products more than a year before they stopped selling the tax shelters in question.
Tax

Treasury Issues Guidance on Partnership Abuses

The United States Treasury Department and the Internal Revenue Service have issued regulations dealing with a tax shelter commonly known as "Son of Boss." The regulations address the tax treatment of the assumption of certain obligations by a partnership from a partner. The regulations ensure that temporary or permanent non-economic tax losses cannot be created by transferring these obligations to partnerships. "These regulations are part of our increased efforts to shut down abusive tax shelter transactions," stated Treasury Assistant Secretary for Tax Policy Pam Olson.
Tax

Treasury Department Sues One of Nation's Largest Law Firms

The Treasury Department, on behalf of the IRS, sued one of the nation's largest law firms, Dallas-based Jenkens & Gilchrist, on Thursday, demanding that the firm turn over information about clients who participated in potentially abusive tax shelters that were promoted by the law firm.The lawsuit was filed in U.S. District Court in Chicago against the Chicago office of Jenkens & Gilchrist.
Tax

House Passes New April 30 Tax Filing Deadline

Seeking new ways to encourage taxpayers to file their returns electronically, the House of Representatives on Thursday voted 252-170 to pass a bill that would change the deadline for filing annual individual income tax returns from April 15 to April 30. The catch is, the returns have to be filed electronically in order to take advantage of the new deadline.Lawyers and accountants have voiced opposition to the measure, indicating their concern that changing the date will only confuse taxpayers.
Tax

Beware New Child Tax Credit Scam

It didn't take the scammers long to start targeting potential recipients of this summer's Child Tax Credit rebate. The IRS is reporting incidents of a new telephone scam that may be gaining in popularity.The latest attempt to take advantage of confusing tax legislation is a telephone caller who tells an unwary individual that there is a quicker way to get this summer's tax rebate. Just provide your credit card number and you'll be charged $39.99 and your tax rebate will be on its way.
Tax

IRS Moves Forward With EIC Certification Plan

The Internal Revenue Service announced on Friday it would proceed with plans to implement a pre-certification procedure for certain potential recipients of the Earned Income Credit (EIC). The plan was originally announced in April, then quickly shelved when impassioned opposition was voiced.
A&A

IRS Web Site Offers Identification Numbers For Businesses

The Internal Revenue Service now lets businesses obtain identification numbers directly from its Web site. After the taxpayer completes an application form online, the system issues an employer identification number (EIN) that may be used immediately. This online process eliminates the need to send paperwork to the IRS as well as the delay in issuing a number that may result from an incomplete application form.
Tax

While Feds Cut Taxes, State Taxes Are on The Rise

While the federal government wrestles with the decision of how much of a tax cut to give taxpayers this year, state governments are struggling to keep offices open and balance their budgets, according to a recent report by the Associated Press.Twenty-one states have approved budgets for the coming fiscal year and included with those budgets are tax increases of $4.3 billion and fee increases of $2.3 billion.
Tax

House Passes Child Tax Credit; Moms and Toddlers Demonstrate

The House of Representatives, as expected, voted Thursday to pass legislation that would expand the Child Tax Credit so that it includes lower-income taxpayers in the form of a refundable tax credit. The Senate voted for a similar bill earlier this week.
Tax

House to Vote on Its Version of Child Credit Bill

Earlier this week the U.S. Senate passed a bill that would expand the recent revisions in the Child Tax Credit to make the credit refundable so that it includes more low-income families.
Tax

Fear of Filing - Guest Article

by Julian BlockThe law empowers and encourages the Internal Revenue Service to make life decidedly disagreeable for persons who intentionally fail to file their returns at tax time. The key federal statute is the Internal Revenue Code, which authorizes the imposition of severe sanctions, both criminal and civil, on those who fail to comply with our "voluntary" system.First, consider the provisions for criminal offenses.
Tax

Focus: Industry Sector Implications of Tax Cuts

Provided by CCH, Inc.The recent passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) (P.L. 108-27) has left people wondering how effective these new tax cuts will be in stimulating the economy. According to various industry representatives, it appears that the stimulative effect of JGTRRA can be measured on two fronts: real and perceived, both of which are vital to their respective recoveries.
Tax

Bush, House Weigh In on Revised Child Tax Credit

What started out as a rather benign adjustment to the recent tax legislation - a change in the Child Tax Credit to make it a refundable credit instead of a credit against existing taxes so that more lower-income families would receive money from the government - has turned into a political controversy, pitting the House Republicans against members of the Senate who passed a version of the bill last week.The Senate bill affects this summer's scheduled tax rebate by making the $1,000 Child Tax Credit refundable and the scheduled $400 rebate payable to
Tax

New York Accountants Argue For Tax Simplification

"These taxes… must, however, be simplified, not only to save the taxpayer inconvenience and expense, but in order that his liability may be made certain and definite." These words, spoken by President Woodrow Wilson in December, 1919, continue to ring true today.
Tax

States Can Now Start Claiming Their Share of $10 Billion in Tax Relief

The U.S. Treasury Department began the process of distributing $10 billion in temporary fiscal relief payments to states under the Jobs and Growth Tax Relief Reconciliation Act signed into law by President Bush on May 28, 2003. "The Treasury Department will ensure that payments are made available as quickly as possible," said Treasury Secretary John W.
Tax

Senate Bows to Pressure, Extends Child Care Credit to Low Income Families

The ink from President Bush's pen was hardly dry after signing the Jobs and Growth Tax Relief Reconciliation Act of 2003 when an uproar started over a large group of low income families who were excluded from the additional $400 child tax credit. A very vocal group in Congress argued that it was unfair to exclude those in the lowest tax bracket, who are not making enough money to pay any taxes, from the benefits of the child tax credit. Yesterday, the U.S. Senate agreed, and moved to expand the credit to 12 million families with incomes between $10,500 and $26,625.
A&A

IRS Moves to Reduce Retirement Savings Barriers

The Internal Revenue Service moved today to make it easier for retirement plans to stay within complex rules and to reduce barriers that discourage some businesses, particularly small businesses, from adopting such employee benefits.The IRS is streamlining its system of voluntary correction programs designed to help retirement plan sponsors and administrators retain the favorable tax status of their plans, including simplifying the fee structure for voluntary submissions.

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