Tax news

Tax

E&Y Slapped With $1 Billion Lawsuit

While the rest of the world hurried to prepare for the Christmas holidays, lawyers and public relations specialists at Big Four firm Ernst & Young kicked into overtime to respond to the filing of a $1 billion lawsuit filed against the firm late last week. Four Indiana residents who, along with 45 other clients, allege that the firm induced them to enter into illegal tax shelters in 1999 filed the suit. The shelter in question utilized currency option trades to create paper losses that offset real capital gains on which the clients would have had to pay taxes.
Community News

'Tis The Season For Charitable Donations – Web Site Resources

Here are some helpful resources on the Web to assist you and your staff in finding the right charity to support. JustGive is a nonprofit organization whose mission is to connect people with the charities and causes they care about and to increase overall giving. As the central gateway to giving, JustGive provides people with the resources, services, and tools they need to give -- whether it's their money, their time, or their goods.
Tax

New Changes to IRS Form W-7

Resident and non-resident aliens applying for an Individual Taxpayer Identification Number must soon use a newly revised Form W-7.The new application forms will request additional information. The applications are now available in both English and Spanish on www.irs.gov. The English language version, Form W-7 and the Spanish language version, Form W-7 (SP) is also available at IRS offices.Along with their application, applicants must also submit documents proving their alien status and their identity.
Tax

President Bush Pushing For Immediate Tax Cuts

In an attempt to spur the sagging economy, the Bush White House is considering recommending tax cuts that could go into effect as early as January 1, 2003. Top among the cuts under consideration are an immediate repeal of the marriage penalty, currently slated for repeal in 2009, and an increase in the Child Tax Credit to $1,000.
Tax

Grant Thornton Warns of Problems With Tax Shelter Regulations

Grant Thornton, currently the nation's fifth largest accounting firm, has responded to the Internal Revenue Service's request for comments on proposed tax shelter regulations and has raised issues that may be of concern to middle-market companies.The regulations, which are set to be come effective January 1, 2003, include two provisions that have sparked concern with the accountants at Grant Thornton. First, the revised regulations include a provision for contractual protection against the risk that tax benefits from tax shelters will be denied.
Tax

IRS Drops Interest Rates

Effective January 1, 2003, the Internal Revenue Service will drop interest rates by one percentage point. The following new rates will apply:5% interest on tax overpayments5% interest on tax underpayments7% interest on tax underpayments by large corporations2 1/2% interest on the portion of a corporate overpayment exceeding $10,000These rates will apply for the first quarter of 2003. These are the lowest rates since 1975.The interest rates are computed from the federal short-term rate based on daily compounding determined during October 2002.
Tax

'Tis the Season For Job Hunting - Prepare For Tax Season

By Robert G. Epstein, President and CEO of CareerBank.com The holiday season brings job opportunities as companies prepare for Tax Season. As winter begins, thoughts of holidays and shopping replace job hunting in the minds of most job seekers. This can be a mistake.The interval between Thanksgiving and Christmas is when many retailers earn most of their annual revenue. What many people don't realize is that, just like the retail industry, public accounting has a seasonal nature.
Tax

IRS Reminds Taxpayers to Make Donations

The Internal Revenue Service issued a news release this week geared toward reminding taxpayers that, as the tax year comes to a close, donations to public charities can still be made as late as December 31, and such donations will reduce 2002 taxes for taxpayers who itemize their deductions on Schedule A of their federal tax return.Taxpayers are reminded that individual gifts of $250 or more must be documented with a written acknowledgement from the charitable organization.
Tax

Deloitte & Touche Announces Winners of Tax Challenge

The competition began with 60 graduate and undergraduate teams from 40 colleges and universities across the nation. Each team of up to four students was given five hours to complete a comprehensive case study and provide a written solution that included an analysis of information, identification of data issues, and alternative tax treatments for a fictitious client.The field was whittled down to six graduate and six undergraduate teams who moved onto the final competition which was held in Orlando, Florida in November.
Practice Management

States Want Tax-Dodging Companies Ousted From S&P 500

A coalition of state officials demanded that Standard & Poor's remove ten companies from the S&P 500 because all ten have moved their legal addresses to locations considered offshore tax havens.
Tax

IRS Launches New Streamlined Examination Process

The Internal Revenue Service has launched a new examination process called the Limited Issue Focused Examination (LIFE). The new process is available to businesses with assets in excess of $10 million and revolves around a formal agreement called the Memorandum of Understanding (MOU) that is created and agreed to by both the taxpayer and the IRS.The MOU includes an agreement to limit the examination to amounts over a particular dollar threshold.
Tax

IRS Awards Grants to Low Income Tax Clinics

The Internal Revenue Service has announced that it has awarded $7 million in matching-fund grants to 138 tax-exempt organizations and academic institutions under the Low-Income Taxpayer Clinic program.The Low-Income Taxpayer Clinic (LITC) grant program, now entering its fifth year, helps organizations provide low-cost legal assistance to taxpayers to resolve tax disputes.
Tax

Tax Talk Today Addresses U.S. Tax Withholding Issues in the Global Business Environment

In a Webcast co-sponsored by the Internal Revenue Service on Tuesday December 10, tax specialists will focus on U.S. tax withholding issues for companies with employees abroad. The specialists will provide information on how to handle tax withholding for both U.S.-citizen and foreign-national employees. Issues covered will include determinations of when and how much to withhold. The live Webcast, entitled "U.S. Tax Withholding Issues in the Global Business Environment," will air from 2-3pm EST on Tuesday, Dec. 10, 2002.
Tax

Even in The Giving Season, Tax Rules Apply

While you’re busy wrapping packages, tying bows, and thinking merry, here are some merry tax thoughts to go with those gifts you are giving and the ones you hope you receive.Giving business giftsGifts you give to your customers or to people who work for you are deductible as business expenses. If you are an employee, the deduction is considered a miscellaneous itemized deduction and is subject to the hurdle of the 2% of adjusted gross income limitation, meaning that only miscellaneous deductions that exceed 2% of your adjusted gross income are really allowed as deductions.
Tax

SEC's Independence Plan Closes Door, Opens Window

The U.S. Securities and Exchange Commission (SEC) has exposed for comment a lengthy and innovative auditor independence proposal. This proposal will result in lower revenues for some firms because it closes the door on some tax services. But it also opens a window in the sense that other provisions could open up new opportunities that bring in more revenues.
Practice

Tax Season Opportunities For Improving Efficiency

By, Tom DavisAs another tax season approaches, CPA firms should spend some time reviewing their current processes for preparing tax returns. Tax preparation is one of the success stories for CPA firm technology implementation. There is no question that returns are prepared faster today than they were two decades ago. However, for most firms there is still some substantial opportunities for improving the tax preparation process. Standardize Review - If there is an area of the tax preparation process that has lagged behind other areas, it is the review of the return.
Tax

Homeland Security Act Signed With Tax-Related Provisions

President Bush signed the Homeland Security Act on November 25. The Act unites various federal agencies into a new Department of Homeland Security. It also introduces a new type of charitable trust and imposes a ban on federal contracts to unpatriotic U.S.
Tax

New IRS Telephone Numbers Take Effect December 2

As part of its continuing effort to provide better service, the IRS is making two new toll-free numbers available starting today.1-800-829-4933Small businesses, corporations, partnerships and trusts who need information or help preparing business returns should now call this number.
Tax

IRS Launches Newsletter to Help Government Entities Comply With The Law

Internal Revenue Service officials today announced the launch of a new electronic newsletter designed to help federal, state and local government entities understand and comply with federal tax laws.The new quarterly “Federal, State and Local Governments Newsletter” is available on the IRS Web site at www.irs.gov/govtsThe site features an electronic subscription service that enables those interested to sign up to receive automatic notification of subsequent newsletters as soon as they are issued."Officials in state and loca
Tax

Senate Approves Permanent Tax Exemption For Holocaust Victims

Provided courtesy of CCHThe Senate last week approved, by unanimous consent, a measure to repeal the sunset of an exclusion from federal income tax for restitution received by Holocaust victims. The Holocaust Restitution Tax Fairness Bill (Sen 2577) makes permanent the provision originally included in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (P.L. 107-16).The House approved similar legislation (HR 4823) by voice vote on June 4 (TAXDAY, 2002/06/05, C.1).

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