Tax news

Tax

IRS Eyes Offshore Funds and Credit Card Schemes

Accounting firms of all sizes may need to brace for more problems, as the long arm of the law and the glare of public scrutiny are extended to thousands of secret bank accounts tucked away on the sun-drenched islands of the Caribbean.
Tax

IRA Contributions Can be Made Until Tax Filing Deadline

If you haven't put any money into an Individual Retirement Arrangement (IRA) for tax year 2001, or if you've put in less than the maximum allowed, you still have time, according to the IRS. You can contribute to either a traditional or Roth IRA until the April due date of your tax return.If you make a contribution for the previous tax year, tell the IRA trustee which year the contribution is for. Otherwise, the trustee may report the contribution as being for the year in which it was received.You may contribute up to $2,000 of your earnings for 2001 to an IRA.
Tax

Tax Assistance for Individuals With Disabilities and the Hearing Impaired

Are you unable to complete your federal income tax return because of a physical disability or hearing impairment? Get help from the IRS through its Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs, or through a special TDD phone number available in both English and Spanish.The VITA program has IRS-trained volunteers who provide free tax assistance at neighborhood locations such as churches, schools, libraries and community centers. VITA is aimed at those who may find it difficult to pay for tax assistance.
Tax

E-Filing: Faster, Cheaper, Safer

As tax professionals head into the home stretch of their most hectic time of year, one thing will surely ease some of the pressure that they face: e-filing. The IRS may not have known what a blessing it was bestowing upon practitioners and enrolled agents when it first initiated the electronic filing system nearly a decade ago, but most tax pros affirm today that it has saved them time, money, and anguish since they have begun using it. Despite the apparent convenience that e-filing provides, not all tax professionals have made the transition from paper to computer.
Tax

AICPA's New Ads - Will the Media Get the Message?

The American Institute of CPAs (ACIPA) has announced the launch of a new advertising campaign to help restore confidence in the profession. New print ads will begin to run on March 10, 2002 in the Wall Street Journal and other major newspapers. These ads will emphasize the roles of CPAs away from the headlines, engaged in the daily routine activities of auditing financial statements, providing tax services and delivering business insight.
Tax

IRS Notices: What To Do

It’s a moment any taxpayer dreads. A letter arrives from the IRS — and it’s not a refund check. But don’t panic. Many of these letters can be dealt with simply and painlessly.Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issueabout your account or tax return. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.
Tax

Bomb-Sniffing Dogs Added to IRS Staff

The IRS service center in Cincinnati has added four bomb-sniffing dogs and six dog handlers to its security program. The dogs and handlers are provided by McLean, Virginia-based MVM Inc. which also supplies electronic security devices and guards at the Cincinnati center.Bomb-sniffing dogs are trained to recognize scents of military and commercial explosives as well as homemade bombs. When a bomb-sniffing dog smells a bomb, the dog sits or lies down at the bomb location.The contract for the bomb-sniffing dogs is a long-term contract that extends beyond the current tax season.
Technology

IRS Strikes Deal on Web-Filing for 1065s and 1041s

An estimated five million businesses will be able to file their business tax returns via the Internet this year, thanks to an agreement between Internet Programming & Consulting (formerly Taxsoft) and the Internal Revenue Service (IRS). Internet Programming & Consulting (IPC) announced the deal on March 4, 2002. Under the terms of the agreement, IPC will promote the electronic filing of business tax returns, including Form 1065, U.S. Partnership Return of Income, and Form 1041, U.S.
Tax

Don't Overlook Home Mortgage Points

Did you buy or build a new home in 2001? Many new homeowners don't know that they can deduct points paid on home mortgage loans. The IRS reminds homeowners that this can really pay off because some home mortgage points are fully deductible in the year they are paid.To fully deduct mortgage points in the year paid, the following requirements must be met: Your main home secures your loan. Paying points is an established business practice in your area. The points paid were not more than the amount generally charged in that area.
Tax

IRS Offers Ice Storm Extensions - MO & KS

The kinder, gentler IRS has issued tax deadline relief in 72 counties in Missouri and Kansas that were declared eligible for federal disaster assistance as a result of a devastating ice storm on January 30.Farmers, business owners, trusts, and tax-exempt organizations that normally are required to file tax returns in February and early March have until March 15 to file tax returns, including some federal excise, employment, and highway use tax returns.
Tax

Coverdell Education Savings Accounts

COVERDELL EDUCATION SAVINGS ACCOUNTS CAN MAKE EDUCATION COSTS LESS TAXINGThe Coverdell Education Savings Account is an incentive to help parents and students save for education. Up to $2,000 may be contributed to a child's Coverdell ESA each year, starting in 2002; the limit was $500 before this year.
Tax

Federal Court Takes Action Against Illegal Tax Promotions

A federal court in Tampa, Florida has obtained a permanent injunction against tax-avoidance promoter Joseph N. Sweet and his organization, EDM Enterprises, of Bradenton, Florida ordering them to cease selling and promoting tax avoidance plans and tax shelters.
Tax

E-Filing Increases, As Do Tax Return Processing Costs

The IRS continues to encourage taxpayers to file tax returns electronically, hoping this year's total will reach 45 million returns, compared with 40 million returns for the 2001 tax filing season. But while the number of electronically filed returns has increased by 78% in the past four years, the number of returns filed on paper in the same period of time has only fallen 5%, according to a General Accounting Office report.
Tax

File 1998 Tax Returns Now or Give Up Refund

The IRS wants to remind taxpayers who have not yet filed 1998 tax returns that they will be ineligible to claim a refund for 1998 if the tax return is not filed by midnight, April 15, 2002.According to the IRS, more than $2.3 billion in unclaimed refunds is awaiting tax filings from approximately 1.7 million taxpayers who have yet to file their 1998 tax returns. Any refunds not claimed by April 15, 2002 will become the official property of the U.S.
Technology

IRS Computers May Land in Afghanistan

Last month, AccountingWEB reported on some inventory control issues at the IRS ("IRS 'Misplaces Over 2300 Computers" - January 9, 2002) that led to congressional calls to halt the IRS budget until they are found.Now, the Bush administration is proposing to take 1,000 of the IRS' two year old laptops and desktop computers and ship them to Afghanistan to help the new government in its modernization efforts.The situation in Afghanistan is desperate, because the outgoing Taliban regime apparently looted government offices before they left, leaving behind
Tax

Taxability of Social Security Benefits

The IRS says that whether your Social Security benefits are taxable depends on your total income and marital status. Form SSA-1099, which Social Security recipients receive by January 31, shows your total benefits, but determining your taxable benefits requires putting pencil to paper.Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.
Tax

IRS Issues New Publication With Info for Terrorist Victims

The IRS has released Publication 3920, "Tax Relief for Victims of Terrorist Attacks," which provides details of guidelines and tax issues specifically related to victims and others affected by acts that are declared to be terrorist attacks.
Tax

PwC Sells Its Tax Lobbying Unit

In the midst of a growing controversy over tax-audit conflicts, PricewaterhouseCoopers (PwC) sold its federal tax lobbying group to Clark/Bardes, a NASDAQ company that plans to list on the New York Stock Exchange next month. PwC was believed to be the largest tax lobbying firm in the year 2000, when it earned approximately $9.5 million for tax lobbying. The tax lobbying group is led by Ken Kies, former Chief of Staff to the Joint Committee on Taxation of the U.S. Congress. One of Washington's best known and most outspoken tax lobbyists, Mr.
Tax

Alternative Minimum Tax

Before mailing your federal income tax return, check to make sure you aren't subject to the alternative minimum tax (AMT). The IRS says that in recent years, more and more people have found themselves subject to the AMT.The tax law gives preferential treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxpayers who benefit from these provisions of the law may have to pay an additional tax called the alternative minimum tax.
Tax

IRS Adds Protection on Taxpayer Shelter Disclosures

Midway through the 120-day window of opportunity for people to disclose tax shelter transactions, the Internal Revenue Service has taken new steps to protect the right for taxpayers to assert attorney-client and work-product privileges when they voluntarily disclose tax shelter transactions."Some taxpayers have indicated that they want to make a disclosure, but they are concerned that the production of certain documents and opinions may be a waiver of the attorney-client and work-product privileges.

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