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Tax

New Tax Legislation Marketing Tool Now Available

On Wednesday May 28, President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act of 2003, which contains a myriad of tax changes for both individuals and businesses. To help arm you with the tools you need for timely client and staff communications, AccountingWEB is preparing a summary of this law - written for the non-tax professional - for you to offer to your clients, prospects and staff.
Tax

Tax Freedom Day Arrived Early This Year

Tax Freedom Day, the day on which Americans start working for themselves instead of the various government entities, fell comparatively early this year, on April 19. On average, if you were to turn all of your earnings over to the federal, state, and local government until your tax obligations were met, it would have taken you the first 109 days of 2003 to stop paying taxes.The not-for-profit Tax Foundation calculates Tax Freedom Day each year. Tax Freedom Day peaked in the 1990s, reaching an all-time late date of April 30 in 2000, a leap year.
Tax

Hunger Strike Ends for Tax Protester

Texas tax protester Gene Chapman ended his 40-day hunger strike on Saturday after deciding he could better further his cause by embarking on a cross-country trek to Washington D.C., teaching people his ideas about freedom from taxation along the way.Dressed much of the time in an Indian garment much like that worn by Mahatma Gandhi, Mr. Chapman lost 55 pounds during his fast, all the while waiting for a satisfactory response from the IRS to one question: "Where is my tax liability in the law?""I want to pay any tax I owe," Mr.
Tax

Key Components of The New Tax Legislation

The Jobs and Growth Tax Relief Reconciliation Act of 2003 contains some splashy big tax cuts that will keep payroll accountants busy this summer, as well as a new rebate plan and tax incentives for small businesses. Key components of the new law include:Acceleration of reductions in the marginal tax rates as originally provided by the Economic Growth and Tax Relief Reconciliation Act of 2001.
Tax

IRS Backs Off Plan For EIC Pre-Certification

Less than a month after announcing a new plan to require proof of eligibility for certain recipients of the Earned Income Credit (EIC), the Internal Revenue Service has stated it will postpone the plan for at least 30 days. The IRS plans to schedule a public comment period before moving forward with the pre-certification program.The EIC is an assistance program for low-income working people. Taxpayers are eligible for the EIC if they have income beneath a certain threshold. Low-income taxpayers with children qualify for a greater credit.
Tax

House and Senate Ready to Vote on Tax Plan

House and Senate Republican leaders reached agreement on a tax plan Wednesday afternoon. Now the plan heads to the floors of both legislative chambers for a full vote.The bill, which is expected to cut taxes by $350 billion over a 10-year period, faces a close vote in the Senate where Vice President Dick Cheney is expected to be called upon to break a 50-50 tie.
Tax

Jackson Hewitt Goes to Battle Over Refund Anticipation Loans

Cendant Corporation, parent company of national tax preparation service Jackson Hewitt, has hired a high-powered law firm to help fight a bill that is making its way through the Minnesota legislature.
Tax

Seven State Sales & Use Tax Exemptions You Should Know About

by Babs VerbrickBusinesses across the United States save several billion dollars annually thanks to individual state enacted sales and use tax exemptions. The majority of states offer various sales and use tax exemptions centered around the manufacturing and agriculture industries as well as for non-profit organizations. But, there are many other little-known exemptions that could mean big savings for your business or your clients.
Tax

Tax Cut Effects on Corporate Dividend Policies Uncertain

As both houses of Congress and the White House begin work on finalizing a huge 10-year tax cut that includes changes to incomes taxes on dividends, companies are adopting a wait-and-see approach when it comes to changing their policies on issuing dividends."At this point we've had no specific directions as to what impact this will have," Chris Preuss, Washington spokesman for General Motors Corp., was quoted in the Washington Post (“Firms Cautious on Prospect of Dividend Tax Change,” May 16, 2003).
Tax

Senate Prohibits Tax Refunds on False Earnings

Last Thursday the Senate voted unanimously for an amendment to the tax-cut bill that would prohibit companies from seeking tax refunds on inflated earnings. The measure, which was introduced by Sen. Charles Grassley (R-IA), comes at a time when a number of high-profile companies are in the process of filing or collecting tax refunds on billions of dollars of earnings that were falsely overstated.
Tax

IRS Clarifies Certain Medical Deductions

The Internal Revenue Service has released two revenue rulings that serve to clarify the definition of certain medical expenses that are allowable as an itemized deduction under Internal Revenue Code section 213.The IRS allows as itemized deductions certain medical expenses that exceed 7.5% of a taxpayer's adjusted gross income. Section 213 prevents the deduction of nonprescription drugs as well as cosmetic surgery.
Tax

Aggressive Tax Spending Leads to Fewer Restatements

Companies that engage their audit firm for significant tax consulting services are less prone to revising their financial statements, an American Accounting Association study has found. "Companies that spend a large amount on tax services from their audit firm typically had fewer restatements than those who spent small amounts or zero," the study said.
Tax

Intuit Will Drop Anti-Piracy Feature

Tax software maker Intuit has announced plans to drop its controversial anti-piracy feature that frustrated many taxpayers during the past tax filing season.The anti-piracy feature, referred to by Intuit as "product activation," installed a permanent memory-resident feature on users' computers and prevented users from producing a tax return with the TurboTax software on more than one computer.Intuit added the feature to its 2002 tax software with the hope that it would increase sales of the tax program.
Tax

Senate Votes 'Yea' on $350 Billion Tax Cut Bill

Late Thursday night the U.S.
Tax

Cash-Strapped States Consider Corporate Sponsorship

Walden Woods for sale? If a proposal currently under consideration in the Massachusetts legislature gains support, the Commonwealth would join the growing list of states and localities looking to offset huge deficits by giving corporate America the chance to sponsor parks, landmarks and buildings.A number of mayors across the country have considered the idea of putting some of their treasurers out for bid, but Massachusetts would be the first state to pass such a law.
Tax

Six Nabbed in Attempt to Foil IRS

Five employees of Florida's Hollywood Greyhound Track and a track customer were arrested and indicted last week for their part in attempting to scam the Internal Revenue Service out of hundreds of thousands of dollars.The five employees - Wilson D. Addison, Thaer M. Ayoub, Scott S. Fischer, David R. Harvey, and Cindi M. Smith - were tellers at the greyhound track located in Hallandale Beach, Florida.
Tax

US Faces EU Sanctions For Tax Breaks

The United States has until October 1 to change tax break laws given to selected U.S. corporations or face a possible $4 billion sanction by the European Union (EU). Last week the World Trade Organization (WTO) gave the European Commission the go-head to impose the sanctions if the US fails to comply with international trade treaties.The EU is asking for the end to illegal export subsidies. At the heart of the dispute is a system of tax breaks for major companies known as the foreign sales corporations (FSC) program.
Tax

Americans Oppose Estate or 'Death' Tax

Estate tax, death tax or inheritance tax — call it what you will — Americans oppose any tax on what parents leave their children, whether it be farms, businesses and property. That's the conclusion of a recent poll, conducted by two organizations - one with a Democratic slant and one with a Republican slant - and sponsored by Women Impacting Public Policy. The study further shows that politicians who favor retaining the tax may be looking for other work come election time.
Tax

House Passes Its Version of Tax Cut Bill

On Friday, the House of Representatives passed a 10-year $550 billion tax cut plan that is guaranteed to generate controversy once the tax planners from the House and Senate face off and attempt to create a bill that both chambers can endorse.The House bill passed with a 222-203 vote falling almost entirely along party lines. Only four Democrats crossed over to support the legislation and three Republicans voted against it.
Tax

Oversight Board Gives IRS a Mixed Review

On May 7, the Treasury Department’s Internal Revenue Service (IRS) Oversight Board presented its annual report to a House Appropriations subcommittee. The report comes at the midway point in the IRS’s 10-year modernization program. While the board stated that substantial progress has been made in the last five years, the board also noted that the IRS is failing to meet key goals, in part because of inadequate funding.

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