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Tax

Congress Tries Last Minute Push to Expand Child Tax Credit

The Senate is offering a compromise, and Democrats promise negative publicity, but House Republicans appear to be holding out for an expanded Child Tax Credit that seems unlikely to make it into law this summer.The U.S. House and Senate have been at odds over efforts to further expand the recently expanded Child Tax Credit so that it includes low-income families who would receive the credit as a tax refund whether or not they paid tax to offset the credit.
Tax

EFTPS-OnLine Gets Major Upgrade

The Internal Revenue Service announced that the Internet version of the Electronic Federal Tax Payment System (EFTPS), the EFTPS-OnLine Web site, has undergone a major upgrade to include several new improvements to help taxpayers.The changes will provide users with more than a half-dozen new features, ranging from more convenience for scheduling payments to expanded ability to track payment history.
A&A

IRS Issues Temporary Regulations on S Corporation ESOPS

The Treasury Department and the IRS have issued temporary and proposed regulations to shut down abusive arrangements involving certain employee stock ownership plans (ESOPs) holding stock in S corporations.
Technology

Internet Taxes on the Road to Extinction

The House Judiciary Committee voted to approve legislation that would permanently extend the moratorium on Internet access taxes. The bill must now be approved by the full House before it proceeds to the Senate.Meanwhile the Senate Commerce Committee indicated it will not attach the issue of sales tax on Internet purchases to the Internet tax moratorium legislation.
Community News

Ernst & Young Faces More Tax Shelter Headaches

The Internal Revenue Service is doing its best to keep Big Four firm Ernst & Young in the news this summer. The federal taxing agency is investigating a particular shelter devised and marketed by E&Y. Millions of dollars from many high profile executives could be at stake.Earlier this month, the IRS won a $15 million settlement from E&Y as part of an agreement that the accountants would launch a new level of integrity associated with the tax shelter services provided to clients.
Tax

Study Shows States Lose Tax Dollars Through Corporate Shelters

According to the results of a new national study performed by the Multistate Tax Commission, state revenues from corporate income taxes decreased by more than a third during 2001.
Tax

IRS Issues Final Regulations on Catch-Up Contributions

The Internal Revenue Service has finalized its regulations relating to catch-up contributions to employer-sponsored tax-deferred retirement plans for taxpayers over age 50. The final regulations take the place of proposed regulations issued in the fall of 2001.Catch-up contributions to tax-deferred plans were introduced in the Economic Growth and Tax Relief Reconciliation Act of 2001. For 2003, eligible taxpayers may contribute as much as $2,000 as a catch-up contribution. The amount will increase by $1,000 each year until it reaches $5,000 by 2006.
Tax

NYC Mayor Takes on IRS Over Earned Income Credit Plan

New York City Mayor Michael Bloomberg has gone on record against the Internal Revenue Service's controversial plan to require pre-certification for certain recipients of the Earned Income Credit.In a New York Daily News interview this week, the mayor indicated his concern that the pre-certification process might "decrease filings by legitimate, eligible recipients." There are approximately 700,000 recipients of the Earned Income Credit (EIC) in New York City.
Tax

Senator Concerned By Unapproved Reorganization of the IRS

Senator Max Baucus (D-MT) has expressed continued concern over the actions of IRS Commissioner Mark W. Everson as he creates the team and shifts some of the organizational structure to help best run the Internal Revenue Service.Sen. Baucus expressed initial concern in a letter to Commissioner Everson which was co-sponsored by Senate Finance Committee Chairman Charles Grassley a couple of weeks ago.
Technology

Taxing Times Ahead: Digital Sales and The European Union

By, Torsten Fetzer, Director of Tax Research Department TaxwareOn 1 July 2003, a new European Union Directive [Directive 2002/38/EC and Regulation No. 792/2002 amending the Sixth VAT Directive (77/388/EEC)] comes into force with regard to the levying of Value Added Tax (VAT) on digital sales within the European Union.All companies outside the EU that are supplying certain specified digital goods and services to final consumers in the EU will be required to register with European tax authorities by July 2003 to collect value-added taxes (VAT).
Tax

U.S. Shows Willingness to Reform Auditing, Tax Policies Overseas

In recent months, tension has been rising between the U.S. and foreign governments over jurisdiction over accounting firm oversight, and perceived unfair corporate tax breaks. Now, U.S.
Tax

IRS Attacked on Interest Reporting Rule

Pressure on the Internal Revenue Service is growing as more lawmakers and lobbyists voice support to withdraw a regulation that would force U.S. banks to declare to the IRS any bank interest paid to non-U.S. citizens.Interest income paid by U.S. banks to nonresident aliens is not taxable in the United States. But a proposed regulation (REG-133254-02) would provide such information to the IRS.
Tax

IRS Issues Proposed Regulations Governing Corporations Filing Consolidated Returns

Provided by CCHThe IRS has issued proposed modifications to the consolidated return regulations under Code Sec. 1502 that relate to stock basis after a group structure change. The regulations affect corporations filing consolidated returns.Reg. §1.1502-31 applies if one corporation succeeds another corporation under the principles of Reg. §1.1502-75(d)(2) or (3) as the common parent of a consolidated group in a group structure change.
Tax

IRS Chief Counsel B. John Williams Resigns

provided by CCH"He did an excellent job, and taxpayers were extremely well served during his tenure as IRS Chief Counsel," said Treasury Secretary John Snow in a July 2 press release in response to IRS Chief Counsel B. John Williams's resignation. The move was unexpected, according to one Treasury representative, who noted that Williams worked tirelessly as Chief Counsel and that he will be missed.
Tax

Time to Celebrate (?) 60th Anniversary of Tax Withholding

This month marks the 60th anniversary of United States federal income tax withholding. While you may be dubious as to whether or not this is an event to celebrate, you may at least be interested in a bit of historical perspective about something all employees accept without question. It wasn't always that way.Prior to 1943, tax payments were made by only the wealthiest taxpayers who wrote a single check and mailed it with their tax return in time for the annual due date of March 15.
Tax

E&Y to Make $15 Million Settlement With IRS

As part of an agreement with the Internal Revenue Service, Big Four firm Ernst & Young will implement a new program that will ensure compliance with the law relating to creating and marketing of tax shelters, and the firm has agreed to make a $15 million non-tax deductible settlement with the IRS.The new E&Y Quality and Integrity Program will "ensure the highest standards of practice and ongoing compliance with the law and regulations," according to IRS Commissioner Mark W. Everson. Mr.
Tax

IRS Closes Door on Controversial Tax Shelter

Former Tyco International Ltd. Chairman Dennis Kozlowski really knew how to take advantage of tax laws. Now, however, others won't be able to follow in his footsteps. The Internal Revenue Service has closed a major loophole that will prevent many executives from sheltering certain types of income from taxation.Mr. Kozlowski reportedly used a technique that allowed him to defer income taxes for between 15 and 30 years by transferring company stock options to family partnerships. It is believed that Mr.
Tax

Tax Practitioners Have New Contact at IRS

The Internal Revenue Service has announced the appointment of Beanna J. Whitlock as director of National Public Liaison, a division of the agency that serves as a vital link to tax professionals and practitioners, business associations, taxpayer assistance groups and federal agencies.Whitlock, who assumed her post on June 30, has been a tax professional for 35 years and an enrolled agent since 1979.
Tax

H&R Block Settles Multi Million Dollar Class Action Suit

H&R Block has agreed to settle a massive class action suit in Texas.
Tax

Illinois to Add $45 Million to State Coffers With Estate Tax

Not waiting for the federal government to make a final decision on the fate of the federal estate tax, the Illinois legislature is preparing to add an estate tax on estates that exceed $1.5 million. The state expects to add approximately $45 million per year to its budget by enacting the estate tax.Illinois Governor Rod Blagojevich contends that the estate tax will only affect 158 Illinois residents. That being the case, the average tax taken from each resident's estate would be between $275,000 and $300,000.

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