Tax news

Tax

Deemed IRAs Provide New Retirement Saving Opportunity

Beginning January 1, 2003, employees will have a new saving option for retirement. The deemed IRA, created by the Economic Growth and Tax Relief Reconciliation Act of 2001, allows employees to contribute to IRA accounts as part of their overall investment in qualified employer plans, including 401(a), 401(k), ESOP, 403(a), 403(b), and 457(b) plans.Plan sponsors welcome the new rules because more investment money will be added to the qualified plan pool. The deemed IRA rules allow for commingling of deemed IRA and qualified plan monies.
Tax

New York Launches Tax Amnesty Program

The State of New York has announced a tax amnesty program that is expected to raise as much as $175 million in delinquent and disputed taxes between now and January 31, 2003.
Tax

IRS Wants to Give Back $80 Million

IRS Press Release:The Internal Revenue Service has announced that it is looking for 96,792 taxpayers across the nation with $80 million in undelivered tax refund checks. The IRS can reissue the checks after taxpayers update their addresses.This year, a new Internet feature makes it easier for taxpayers to track down whether they have an undelivered refund.
Tax

H&R Block to Appeal $75 M Payment Order, Faces Other Worries

Last week a judge announced plans to order H&R Block to pay a fee of $75 million for what the judge claims was a "clear and conscious violation of duty" in Block's practice of accepting and not advising clients of a fee from lender Household Finance, Inc. for high-interest tax refund anticipation loans. Judge J. Manuel Banales of Kleberg County, Texas, who will issue the order, disclosed his opinion that Block was not looking out for its clients by not telling them of the fee.
Technology

States Vote to Proceed With Internet Sales Tax

Tax officials and legislators from 31 states and the District of Columbia met in Chicago on Tuesday to vote on a plan to simplify their respective tax laws in order to position themselves to collect sales tax on Internet sales.The state officials voted unanimously to accept the plan, called the Streamlined Sales Tax Project. The next step in the controversial plan will be to ask Congress to mandate an online sales tax collection program.
Tax

Treasury Announces New Tax on Offshore Companies

The Treasury Department has issued temporary regulations that require companies that move offshore to inform shareholders and the Internal Revenue Service of the move and to pay capital gains tax on the exchange of stock for stock in a foreign corporation.
Tax

AICPA Issues Interpretation of Statement on Tax Services

The American Institute of Certified Public Accountants has issued an exposure draft of a proposed interpretation of Statement on Standards for Tax Services (SSTS) No.
Tax

Free Client Tax Planning Letter From RIA

Accounting publisher RIA offers the following client letter for free for practitioners to use or adapt to remind clients of the need for year-end tax planning.
Tax

Insight Available For Tax Exempt Bond Specialists

IRS agents have long had access to continuing education courses to assist them in performing their duties. A recently released text of an IRS course on tax exempt bonds now gives practitioners a glimpse of the issues and topics on which bond agents are being trained.While they can not be cited as authoritative literature, the CPE text does provide valuable insight.
Tax

H&R Block Slapped With $75 Million Kickback Ruling

A Texas judge has ordered that H&R Block is liable for paying $75 million in damages relating to a class action suit alleging the tax preparation company engaged in a "clear and serious violation of duty" by not informing tax clients of fees it received for issuing refund anticipation loans during the period 1992 through 1996.The judged announced his plans in a letter that stated he believes that H&R Block's actions were "intentional, willful and deliberate" when it offered short-term high-interest loan
Tax

KPMG Offers Tax-Saving Tips for Year-End

KPMG's Personal Financial Planning unit has compiled a list of 12 tax-saving tips that individuals can use between now and December 31st to reduce their 2002 tax bills. Here are the tips in brief:Review your stock portfolio and consider using capital losses to offset capital gains.
Tax

IRS Seeks Fee For Processing Offers-in-Compromise

The Internal Revenue Service has issued a proposed regulation that, if adopted, will affect the agency's offers-in-compromise (OIC) program. The regulation, NPRM REG-103777-02, would impose a $150 filing fee on OIC applicants. The fee would not change the net amount paid by a taxpayer who successfully negotiates an OIC plan. The OIC program gives the IRS discretion to accept a reduced amount in payment for tax obligations where there is little or no expectation of receiving the full amount due.
Community News

Rossotti Era Comes to a Close

Charles O. Rossotti, Commissioner of the Internal Revenue Service, steps down today after five years of service. In an interview that appeared in The New York Times on Tuesday, Mr. Rossotti expressed his view that the IRS is steadily losing its war with tax cheats, particularly those in the higher income brackets.He also suggested that he had received a request by the Bush administration that he not present Congress with his views that the IRS cannot adequately function without budget increases. When asked to elaborate, Mr. Rossotti indicated he might do so after his term ends.
Tax

Transfer Pricing Shenanigans Hide Billions From IRS

Researchers at Pennsylvania State University and Florida International University have released a disturbing study showing that fake pricing schemes for import-export transactions are defrauding the federal government of well over $50 billion annually.Consider the following: Razor blades imported from Britain for $113 apiece. Tweezers from Japan for $4,896 each. Cut rubies from Burma for $38,192 per carat. And for U.S.
Tax

mySAP Tapped to Overhaul IRS Internal Financial Systems

The IRS, working with Computer Sciences Corporation (CSC), is committed to overhauling its systems by looking for ways to vastly improve its internal financial management processes. CSC has announced this week that it has selected the mySAP.com(r) e-business platform to support the initial phase of the IRS's Integrated Financial Systems modernization initiative.The IRS established the Integrated Financial Systems initiative to improve budgeting processes, managerial accounting processes and revenue accounting for the Service.
Tax

Up to 78 Million Taxpayers Will Be Able to File For Free

The Treasury Department has signed an agreement with Free File Alliance, LLC, an organization representing a consortium of tax software companies, to enable as many as 78 million taxpayers to file taxes online at no cost.Beginning in January 2003, tax software companies who decide to join the consortium will each offer free tax filing services for up to 10% of US taxpayers. Each software company is entitled to set its own rules for determining which taxpayers qualify for the free services.
Tax

Procedures Clarified For Accounting Period Changes

provided by CCHThe IRS has issued Notice 2002-72 which clarifies certain procedures for obtaining approval of an adoption, change or retention of an annual accounting period.
Tax

IRS's Rossotti Says Agency is Still Short on Resources

In what may be one of his last public appearances before his term ends on November 6, IRS Commissioner Charles O. Rossotti spoke to a conference sponsored by the American Institute of Certified Public Accountants and emphasized the growing gap between the demands placed on the IRS and the resources available to meet those demands."These divergent trends simply cannot continue indefinitely.
Tax

O'Neill: Tax Code is 'Absolute Gibberish' - Overhaul Pending

Treasury Secretary Paul O'Neill is overseeing a team of over 100 tax policy experts at the Treasury Department who are putting together a package of tax reform options to present to the White House right after the first of the year.
Education & Careers

Deloitte & Touche Sponsors Tax Challenge

The Deloitte Foundation, a non-profit arm of Big Four firm Deloitte & Touche, is sponsoring its first annual Tax Challenge for undergraduate and graduate tax students.On Saturday, October 19, eight regional groups of 10-15 teams of up to four students were given five hours to complete a case study that incorporated information analyses, data issues, and alternative tax treatments for a fictitious client. The teams submitted a written solution to a panel of D&T judges.

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