Tax news

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).
Tax

NSA Develops Tax Accounting Standards For Small Business

The National Society of Accountants (NSA) has prepared an exposure draft on "Tax Accounting Standards for Small Business." NSA intends for the guidelines to be used by accountants who are involved with financial statements for small businesses.NSA says the standards are based on the principles of accounting used in preparing federal income tax returns, (e.g., the Internal Revenue Code).James H.
Tax

Block Offers to Settle Texas Class Action

H&R Block, surprised last week when a Texas judge indicated his plans to order the nation's largest tax preparer to pay $75 million in a class action lawsuit, has announced its intention to settle the suit for coupons, not cash.The lawsuit alleges that H&R Block had a fiduciary duty to customers to inform them of a fee payable to Block that is part of the cost of short-term tax refund anticipation loans arranged by Block through lender Household Finance. Block CEO, Mark A.
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.

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