Tax news

Tax

Tax Executives Oppose Law That CEOs Sign Tax Returns

Tax Executives Institute (TEI) has written to the Senate Finance Committee to express its opposition to S.1971. Consistent with Section 1001 of the Sarbanes-Oxley Act, S.1971 would require corporate Chief Executive Officers to sign corporate tax returns.
Technology

IRS Awards $3.7 Million Software Contract

The Internal Revenue Service has awarded a $3.7 million contract to software consultant and reseller Aelita Software, based in Columbus, OH. The software company will oversee the upgrade of the IRS's approximately 4,000 servers and 130,000 users.Included in the upgrade is a plan to move the IRS from Microsoft Windows NT to Windows 2000 and from Microsoft Exchange 5.5 to Exchange 2000.
Tax

IRS Taps More Companies' Files For Credit Card Probe

The Internal Revenue Service filed petitions against forty companies in an attempt to widen its credit card probe. The Service is after individuals who are making purchases with credit cards linked to offshore accounts in an attempt to evade taxes. None of the companies have done anything wrong.
Tax

Employers May be Entitled to a Refund of FICA Taxes Paid on Severance

Kathryn A. English, Esq. and Holly S. McCann, Esq.A decision issued in April 2002 by the U.S. Court of Federal Claims may enable employers to obtain a refund of social security or "FICA" taxes paid on certain kinds of severance payments. In CSX Corporation, Inc. v. United States, the court rejected the Internal Revenue Service's interpretation of what constitutes supplemental unemployment compensation benefits that are exempt from FICA.
Tax

Accenture Facing Big Changes

Three big changes are in the works for Accenture, the consultancy formerly known as Andersen Consulting. The first change came in the form of a recent announcement that Accenture has sold its venture and investment portfolio. The sale to CIBC World Markets, the investment and merchant banking arm of Canadian Imperial Bank of Commerce, allows for Accenture to maintain a 5% stake in the portfolio.
Tax

September 11 Victims, Spouses Receive Tax Break

In the past year, Congress and the Internal Revenue Service have issued many tax rulings that are designed to ease the tax and administrative burdens on families of victims of the September 11, 2001 terrorist attacks. The latest of those rulings was issued last week.Typically taxpayers who sell a personal residence within two years of a previous such sale are barred from taking the tax exclusion that applies to the gain on the sale.
Tax

Bankruptcy Filings Hit All-Time Record

New bankruptcies filed during the second quarter of 2002 and for the past 12 months set all time records, according to data released by the Administrative Office of the U.S. Courts. The 1,505,306 new cases is the first time filings have totaled over 1.5 million in a 12-month period. Filings increased 8.6 percent from a total 1,386,606 bankruptcy cases filed in the 12-month period ending June 30, 2001. The previous highest total of filings for any 12-month period was in the 12-month period ending Dec.
Tax

Tax Form 1040 Schedule E Will Change

The IRS is ready to make significant changes to the income tax form Schedule E, Supplemental Income and Loss, in an effort to ease the process of matching information from Schedules K-1 to taxpayers' income tax returns. Earlier this summer the IRS launched a massive K-1 matching program in an attempt to match income between taxpayers and pass-through entities.Pass-through entities include partnerships, S corporations, estates, and trusts.
Tax

IRS Gets Approval for 'John Doe' Summons

A federal district judge in Miami has approved a request by the Internal Revenue Service to obtain access to records of owners of MasterCard credit cards in 30 countries. The countries named in the summons request include Liechtenstein, Switzerland, and several Caribbean nations including Cayman Islands and Bermuda. The IRS suspects U.S. citizens are using the offshore credit cards as a means of diverting income from U.S. taxation.
Tax

Iowa Man Leaves Tax Legacy to His Neighbors

Dewey Byar of West Burlington, Iowa died without heirs - at least the kind that grow on family trees. Instead, the bachelor farmer willed his estate to his neighbors so that they will benefit for many years to come.Mr. Byar left almost his entire estate, which was auctioned last weekend, to an investment trust, the proceeds from which will go toward lowering the property tax bills in Des Moines County.
Tax

Treasury Closes Life Insurance Loophole

Wealthy taxpayers who want to avoid paying exorbitantly high estate taxes of up to 50% have taken solace in recent years with a tax scheme that enabled them to purchase certain life insurance policies which get passed on to heirs tax free. Those days are over.The way the scheme worked, up until last Saturday's Treasury Department notice (Notice 2002-59), a taxpayer would purchase a life insurance policy for a high price, when the actual value of the policy is significantly lower.
Tax

Use Those Capital Losses by Taking Advantage of The 18% Deemed Sale Election

By Tony Cardinalli, CPAThe Dow Jones Industrial Average has seen 20% of its value decline in 2002. Many investors were avoiding the dreaded phone call to their brokers instructing them to sell off their positions before things got worse. Their losses were causing them to lose sleep at night. It happened. They called. An original tax strategy herein will provide some additional damage control. Countless taxpayers will carry forward those stock market losses into the future because of the $3,000 limitation rule.
Tax

Toyota Asked For It, They Got It

The Internal Revenue Service has given the green light to Toyota owners to take a $2,000 above-the-line tax deduction as a prize for purchasing a 2001, 2002, or 2003 Toyota Prius.The Prius is a gas-powered vehicle with an electric motor - a hybrid car that is the first to qualify for a new tax deduction for fuel efficient, lower emission cars.The deduction is a one-time deduction, treated as an adjustment to income so those taxpayers driven to purchase the Prius do not have to itemize deductions to take advantage of the $2,000.The
Tax

Support Grows For a Tax Relief Package For Investors

Capitol Hill is abuzz with talk of a tax relief package for investors. President Bush has said his Administration is considering a variety of possible tax breaks that would give the stock market a boost and speed the pace of U.S. growth before the November congressional elections.
Technology

Computers Containing Tax Data Disappear

An audit released this week points to the Internal Revenue Service as having lost an unspecified number of computers that contain private taxpayer information such as Social Security numbers and bank account information.The audit, performed by the Treasury Department's tax inspector general, determined that of the 6,600 laptop and desktop computers owned by the IRS and loaned to volunteer participants in the agency's Volunteer Income Tax Assistance and Tax Counseling for the Eld
Tax

IRS Calls Halt to K-1 Matching Program

Earlier this summer the Internal Revenue Service announced the launch of a new program to encourage compliance in the area of reporting amounts on partner, shareholder, and beneficiary K-1 forms. New computer software allows the IRS to match K-1 forms filed by partnerships, S corporations, and estates and trusts with the tax returns on which the numbers should be reported. Under the IRS's matching program, notices are sent to taxpayers requesting an explanation of any discrepancies that are found.
Tax

Warren Buffett Takes On the IRS

Warren Buffett, the colorful chairman and CFO of investment firm Berkshire Hathaway, Inc., has filed a lawsuit against the Internal Revenue Service claiming the agency incorrectly denied his company deductions of $16.3 million.The IRS has rebuked the claim, stating that Berkshire Hathaway used at least part of the funds to make investments in other companies, and that the tax code reduces deductions for amounts used to invest in dividend-producing resources.In the lawsuit, Berkshire Hathaway claims that
Tax

Tax Talk Today Addresses Retirement Options

The latest installment of Tax Talk Today, a monthly Webcast co-sponsored by the Internal Revenue Service, featured valuable information about retirement options and related tax incentives.Tuesday's session, "Advising Clients on Retirement Plans," discussed advantages of tax-favored plans and addressed the various options for retirement plans, including SEP-IRAs, 401(k)s, SIMPLE-IRAs, defined benefit plans, money purchase plans, and profit-sharing plans. Panel members discussed the complexity associated with the plans and the paperwork burden.
Tax

IRS Releases New Addresses For 2003 - Reminder

Due to a reassignment of workloads, the Internal Revenue Service has once again changed mailing addresses at some of the tax processing centers. The new addresses were announced in early August, just one week before the agency's second largest filing deadline, August 15.
Tax

IRS Dumps Dell for HP

The Internal Revenue Service has decided to change computer suppliers from Dell Computer Corp. to Hewlett-Packard Co., and has signed a $35 million contract with HP to seal the deal."HP understands the complex technology requirements of agencies like the IRS and looks forward to helping them achieve efficiencies new technologies can bring," said Jim Weynand, vice president and general manager of HP Public Sector Organization.

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