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IRS Announces Changes to Tax Return Centers For Ten States

The Internal Revenue Service is urging tax professionals to be aware of changes that will affect where they send tax returns and payments for clients in 10 states starting in 2004. The changes are a result of redistributing workload among the 10 IRS processing centers to provide better service.Tax professionals whose clients are in the Metro New York area and Alabama, Arkansas, Delaware, Michigan, Montana, Rhode Island, Tennessee, Utah and Wyoming will be filing their returns with different IRS centers during the 2004 filing season.
Tax

GAO Questions IRS' Ability to Evaluate EIC Pilot Program

A controversial IRS program that will require proof of eligibility to receive earned income credits is coming under fire from the General Accounting Office, which has issued a report questioning the ability of the IRS to effectively evaluate the success of the pilot program.Unlike recipients of other benefit programs, Earned Income Credit recipients generally receive payments without advance, formal determinations of eligibility.
Tax

U.S. Companies May Receive Tax Windfall

On Wednesday, the Senate Finance Committee approved a bill that would provide a reduced tax rate on income that has been held overseas. Analysts say it is likely the bill will become law.This proposed legislation is yet another attempt on the part of our legislators to replace the U.S. export credit that has been available to U.S. companies that sell their products abroad. The World Trade Organization (WTO) gave the U.S.
Tax

SEC Looks at Hedge Funds, Amex Irregularities

Seeking to better understand how hedge funds are managed and how their assets are valued, the Securities and Exchange Commission will consider a staff proposal to put hedge funds under its oversight umbrella.“Hedge funds for the most part operate below the commission’s radar screen,” SEC Chairman William Donaldson said at a press conference in Washington, at which the SEC staff proposal was unveiled.
Tax

IRS May Start Sharing Data with Other Government Agencies

It's the beginning of the end of privacy say those who fear the next move of the Internal Revenue Service. It's the beginning of responsible national security say those on the other side of the fence.
Technology

Internet Sales Tax Plan Steamrolls into Congress

New legislation was discussed in Congress on Thursday that may represent the official start of open season on Internet Sales Tax legislation.Bipartisan legislation will be introduced in both the House and the Senate that would authorize states to collect taxes on items purchased online.The 20 states already in agreement on what they have dubbed the Streamlined Sales Tax Project support legislation that would allow them to collect sales tax on Internet purchases based on a simplified multi-state program that will avoid some of the confusion of paying tax to multiple entities.
Tax

Illinois Sues Online Retailers Claiming Cyber Tax Evasion

On September 17, the House of Representatives passed the Internet Tax Non-Discrimination Act, the bill that imposes a permanent ban on taxes on Internet services. The current moratorium, set to expire on November 1, 2003, was a temporary fix installed two years ago, providing legislators with time to debate the issues of the permanent moratorium. The moratorium applies to all methods of Internet access, including pricier high-speed links taxed by some states.
Tax

IRS Offers Relief to Victims of Hurricane Isabel

Last week's Hurricane Isabel affected millions of people on the East coast, and the Internal Revenue Service is prepared to come to the aid of those who were victimized by the storm.
Tax

Survey: Tax Reductions Not Likely to Spur Capital Investment

In a survey of senior tax executives conducted by Big Four firm Deloitte & Touche, a majority of executives indicated that a reduction in the top corporate tax rate would not be enough to encourage an increase in capital investments.Nearly half of those surveyed (48%) said that a change in class lives would encourage capital investments.
Tax

Congress Considers Manufacturing Tax Cuts

With time running out to eliminate an export tax the World Trade Organization has called "illegal," Congress is considering two bills that would eliminate the cut by the year’s end deadline and make up the difference through tax cuts to the manufacturing sector.Charles Grassley (R-IA), chair of the Senate Finance Committee, introduced a bill last week that would immediately cut tax rates for domestic manufacturers and phase in all others by 2013. The reduction would save domestic manufacturers $50 billion over 10 years."U.S.
Tax

Standard Deductions and Tax Rate Brackets Projected For 2004

The standard deduction, exemption amount, and individual tax rate brackets are adjusted annually for cost-of-living increases. The adjustments are based on the average Consumer Price Index (CPI) for the 12-month period ending the previous August 31. The August 2003 CPI was released this week by the Labor Department. (U.S. Department of Labor, Consumer Price Index [for all-urban consumers], 9/16/2003)."The IRS isn’t officially required to release these figures until December 15," says William E.
Tax

IRS, States Partner to Target Abusive Tax Avoidance

The Internal Revenue Service and state tax officials announced this week the establishment of a new nationwide partnership to combat abusive tax avoidance. Under agreements with individual states, the IRS will share information on abusive tax avoidance transactions and those taxpayers who participate in them.The agreements creating this partnership are designed to enable both state and federal governments to move more aggressively in the fight to ensure all taxpayers pay their fair share.
Tax

Justice Department Leans on Grant Thornton For Tax Shelter Information

As part of the ongoing effort to identify taxpayers who have participated in abusive tax shelters, the U.S. Justice Department has stepped in on behalf of the Internal Revenue Service to help enforce summonses against national CPA firm Grant Thornton.The Justice Department has asked a federal court to enforce nine separate summonses seeking information on whether tax shelter registration requirements were being met.
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.

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