Tax news | AccountingWEB

Tax news

Tax

IRS Offers Weekly Electronic Newsletter for Tax Professionals

Press ReleaseThe IRS is now publishing the Digital Dispatch on a weekly basis instead of biweekly. By sending the e-mail dispatch out each week, the IRS can better help tax professionals stay current with important new developments. The Digital Dispatch is a newsletter for tax professionals e-mailed to 100,000 subscribers, free of charge.
Tax

Tax Protester Wins Battle Against IRS

Last week a Federal Express pilot won a battle with the IRS over the popular tax protester issue of where it states in the law that people are required to pay income taxes. A federal court in Memphis ruled in favor of Vernice Kuglin who has refused to pay federal income tax for nearly a decade.The issue decided by the Memphis jury was actually not whether or not Ms. Kuglin owed taxes on $920,000 of income earned in the years 1996 to 2001. While Ms.
Tax

IRS Announces Application Fee for Offers in Compromise

IRS Press ReleaseBeginning November 1, 2003, the Internal Revenue Service will charge a $150 application fee for the processing of offers in compromise. The IRS expects that this fee will help offset the cost of providing this service, as well as reduce frivolous claims.The law authorizes federal agencies to charge fees to defray the costs of providing certain services. Guidelines encourage such fees for benefits beyond those provided to the general public.
Tax

Kinder, Gentler IRS Gives Automatic Blackout Extension

Much like the tax relief measures instituted by the Internal Revenue Service after the terrorist attacks of September 11, 2001, an automatic extension of time to file tax returns has been granted by the IRS to victims of the August 14 power outage that affected several northeastern states.For taxpayers affected by the blackout, the due date for tax returns that were due on August 15 is automatically extended one week to Friday, August 22, 2003.
Tax

IRS Strikes Blow Against Attorney-Client Privilege

When does the Internal Revenue Service's right to prevent participation in abusive tax shelters take precedence over the age-old right of attorney-client privilege? A nation of lawyers and accountants is biting its collective nails waiting to find out the answer.On Thursday, The U.S. Justice Department asked a federal court in Illinois to force the Chicago office of Dallas-based law firm Jenkens & Gilchrist to turn over the names of clients who invested in certain abusive tax shelters sold by the firm.
Tax

IRS Extensions Create Financial Burden for U.S.

The Treasury Inspector General for Tax Administration (TIGTA) has released a report showing that the current extension program for federal income tax returns is costing the country millions and perhaps billions of dollars. Not only that, the current program creates a feeling of ill will toward the government by taxpayers who comply with the laws by paying their taxes on time.The TIGTA report points out inequities in the current rules for tax return extensions and makes recommendations for improvement.
Tax

More Than 8.5 Million Tax Returns Are On Extension

Last spring, more than 8.5 million taxpayers took advantage of the automatic extension available for filing income tax returns after the April 15 due date. Friday is August 15, and the time has arrived to file those tax returns. Here are some last minute reminders and recommendations for getting the job done on time.In the flurry of finishing the preparation of your federal income tax return, don't forget your state.
Community News

BDO Seidman's Clients Try to Rescue Accounting Firms

Last month, the Chicago-based U.S. Court of Appeals for the Seventh Circuit ruled that accounting firms cannot hide behind the cloak of client privilege and must disclose information to the Internal Revenue Service about participation in certain types tax shelters that are considered to be abusive.
Tax

IRS Not Chasing Tax Miscreants

A report issued last week by the U.S. Treasury Inspector General for Tax Administration claims that the Internal Revenue has failed to follow through on collection efforts relating to business taxpayers that are breaking tax laws.The report describes 1,841 cases of tax fraud wherein businesses are either failing to withhold taxes from employees or are guilty of filing frivolous returns. Of those cases, only 233 were entered into an IRS database of taxpayers who file frivolous returns.The report also referred to at least 165 taxpayers files that been lost.
Tax

Taxpayers Can Track Advanced Child Tax Credit Checks on IRS Web Site

With the final set of advance child tax credit checks being mailed today, the IRS reminds taxpayers they can use IRS.gov to get information about the amount or status of their checks. People who filed after April 15 — for example, those with extensions — will get any advance payment they are entitled to receive after the IRS processes their 2002 return.About 7.9 million checks totaling $4.8 billion are being sent today, marking the third and final week of the initial mail out of 24 million checks totaling about $14 billion.
Tax

Schwarzenegger Releases Tax Return

Did you see the "Today Show" on Friday? NBC's Matt Lauer was interviewing California gubernatorial candidate Arnold Schwarzenegger and asked him if he was prepared to release his tax returns as part of a public disclosure.
Tax

U.S. Banks Scrutinized for Tax Avoidance

According to a report in Thursday's Wall Street Journal, the SEC has discovered that at least 10 major U.S. banks are responsible for sheltering hundreds of millions of dollars from federal and state income taxes through private investment funds that paid tax-exempt dividends. So far the SEC has indicated that more than $17 billion was held in these funds in recent years, the purpose of the funds being solely to shelter income from taxation.The SEC is pointing to Big Four firm KPMG as being responsible for setting up 10 of 11 such funds.
Tax

IRS Teams up With States to Find Tax Cheats

Making the most of their limited resources to achieve a common goal, the Internal Revenue Service is turning to states to help ferret out tax dodgers, with California the first to enter into a federal-state partnership.The IRS’s new program takes advantage of the state’s resources to track down tax cheats, who are usually avoiding paying their state taxes as well, so both sides benefit. "Historically, the IRS has been outgunned," tax specialist Philip Wolman of Los Angeles law firm Buchalter, Nemer, Fields & Younger told the Los Angeles Times.
Tax

IRS Announces Plan for EIC Pre-Certification Program

On Tuesday, the Internal Revenue Service published its official plan to pre-certify recipients of the Earned Income Credit. After a 30-day public comment period, the IRS has finalized its program, incorporating many suggestions for improvement and ease of implementation.Originally the IRS announced it would send pre-certification notices to 45,000 individuals representing the most at-risk candidates for the EIC.
Technology

Another Blow is Struck Against Internet Taxes

The Senate Commerce Committee voted last week to make the ban on Internet access taxes permanent. This vote came close on the heels of action in the House of Representatives the previous week where the House Judiciary Committee also voted to make the ban permanent.Under the Senate version of the bill, nine states currently imposing taxes on access fees will have to end that taxation within three years.
Tax

Two More Plead Guilty in HealthSouth Case, IRS Joins Probe

And then there were 14. Two more former HealthSouth officials agreed this week to plead guilty to conspiracy charges as part of what investigators say is a $2.5 billion accounting fraud. Richard Botts, 45, former senior vice president in the tax department, and Will Hicks, 39, former vice president of investments, join 12 of their former colleagues who formerly pled guilty in the case — including the only five people to serve as the company’s chief financial officer.
Tax

Offshore Amnesty Program Reports Success Despite Bad Press

The Offshore Voluntary Compliance Initiative (OVCI) is reporting strong results. The program, designed by the U.S. Treasury Department to encourage wealthy individuals to pay taxes on income hidden in offshore banks, received some unwarranted bad press this week when two U.S. Senators misread a Treasury report and questioned the success of the effort.Earlier this year the IRS announced that more than 1,200 people had responded to the initiative, offering to report offshore income and pay the taxes, thus avoiding potential civil fraud charges and criminal prosecution.
Tax

House Considers Tax Break For Businesses

House Ways and Means Committee Chairman Bill Thomas (R-CA) has introduced a bill that would provide at least $120 billion in tax relief for businesses over the next 10 years.Congress is under pressure from the World Trade Organization to discontinue a U.S. export credit that provides a subsidy to U.S. manufacturers who sell their goods abroad. Finding a means to replace the advantages provided by the export credit is the impetus for the proposed business tax relief legislation.Representative Thomas's bill, H.R.
Tax

More Delays in IRS Modernization Program

The Internal Revenue Service announced last week that a major milestone in the agency's massive modernization project will not be met. The first phase of the Customer Account Data Engine (CADE), a database that will eventually hold tax records of all of the nation's taxpayers, was scheduled to go online in August, 2003, after an earlier postponement from December, 2001.
Tax

GAO Tells IRS to Shape Up Regarding Excise Tax Management

The General Accounting Office has completed its review of the Internal Revenue Service's management of excise tax collection and distribution, and the news is not good for the IRS. Several problems exist with the excise tax program, and the GAO has offered recommendations for solving those problems.The federal government assesses excise taxes on various services, collects those taxes, then transfers the money to appropriate trust funds. Each year nearly $70 billion is collected in federal excise taxes.

Pages

Premium content is currently locked