Tax news

Tax

Congress Probes Taxes and Accounting for Stock Options

On April 18, 2002, the Senate Finance Committee heard testimony on the tax and accounting treatment of executive stock option compensation. Chairman Max Baucus said the objective of the hearing was to fully explore the issues that surfaced in the wake of Enron, even though some may fall under the jurisdiction of other committees.A key issue is whether the treatment of stock options is best handled as an accounting question or through the tax code. Senator Carl Levin argued that Congress has the responsibility for adopting a tax code.
Tax

Slavery Tax Credit Scam Generates Actual Tax Refunds

In 1993, Essence magazine published an article in which it described the Civil War plan under which freed slaves were entitled to receive 40 acres and a mule from the government. Congress passed a bill that authorized the grant, and some former slaves actually received the 40 acres and a mule before the bill was ultimately vetoed.
A&A

Small Corporations Say Good-bye to Schedules L and M

The IRS announced last week that beginning with tax year 2002, companies with less than $250,000 in gross receipts and less than $250,000 in assets can bypass filling out the Schedules L, M-1, and M-2 on their corporate income tax returns. Corporations who file Form 1120-A and who are under the $250,000 threshold no longer have to prepare Parts III and IV of their 1120-A.The immediate result of this ruling will be a significant reduction in record-keeping and paperwork for small businesses. Many small businesses will no longer need to struggle to learn accounting rules.
Tax

Treasury Kicks Off New Tax Simplification Program

On April 15, 2002, Treasury Secretary Paul O'Neill announced the issuance by the Treasury Department of the first in a series of proposals to simplify the U.S. tax code. "Our tax code is so complicated," he said, "we've made it nearly impossible for even the Internal Revenue Service to understand."PrioritiesTopics of highest priority involve the tax treatment of families and children. Subsequent proposals will focus on the simplification of tax laws related to businesses.
Tax

DOJ Gives Tax Preparers a Turn in the Hot Seat

A rash of press releases from the Department of Justice (DOJ) during the past week shows the Department is teaming up with the Internal Revenue Service (IRS) and going after the tax practices of accounting firms. Reasons range from fraudulent tax returns to bogus tax advice.
Tax

IRS, States Begin Crackdown on Partners' Tax Returns

The New York Times reported last week that the Internal Revenue Service (IRS) is sharing information to help state tax authorities crack down on underreporting of income by partners and other participants in pass-through tax entities.
Tax

Appeal Rights

Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal, according to the IRS. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.IRS Publication 1, “Your Rights as a Taxpayer,” explains some of your most important taxpayer rights.
Tax

Tax Tips For Last Minute Filers

With the tax filing deadline close at hand, the IRS offers some tips for those still working on their tax forms:Put your Social Security number on the return (it’s not on the label)Double-check your figuresSign your formAttach all required schedulesSend your return or request a filing extension by April 15The numbers to check most carefully on the tax return are the identification numbers — usually Social Security numbers — for each person listed.
Tax

Consider Extension Options as April 15 Approaches

As the clock continues to tick closer to April 15, many tax return preparers will have to consider the option of extending the due date of their tax returns.
Tax

Refunds - How Long Should They Take?

Are you expecting a tax refund from the IRS this year? The IRS says that if you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in less than three weeks, and even faster when you choose direct deposit.You can have a refund check mailed to you, or you may be able to have your refund deposited directly into your bank account. Direct deposit into a bank account is more secure because there is no check to get lost.
Tax

New Report: Filing Mistakes Cost Taxpayers $1 Billion a Year

To individuals who are not tax professionals, navigating the world of itemized deductions is a confusing, cloudy process of rules, loopholes, opportunities and landmines.
Tax

Andersen Mulls Ground-Breaking LBO of Tax Practice

As an alternative to the offer from Deloitte & Touche (D&T), Andersen is considering a management-led leveraged buy-out (LBO) of its entire tax practice. The proposed transaction would help stem layoffs, and it presents clear benefits for Andersen.
Technology

Criminal Investigation: The IRS Agent You Never Want to Meet

Recently, in a widely-viewed Webcast entitled "Criminal Investigation: The IRS Agent You Never Want to Meet," Tax Talk Today explored the largely obscure, yet intriguing process known as Criminal Investigation, at the IRS. Although the Criminal Investigation (CI) branch may be comprised of the agents "you never want to meet," the session confirmed the importance of taking a closer look at the CI process, to grasp exactly how this branch succeeds in furthering confidence in our tax system while promoting compliance.
Tax

Amended Returns

Oops! You’ve discovered an error after your tax return has been filed. What to do? You may need to amend your return, according to the IRS.The IRS usually corrects math errors or requests forms (such as W-2s) or schedules left out. In these instances, do not amend your return. However, do file an amended return if any of the following were reported incorrectly:– Your filing status– Your total income– Your deductions or creditsUse Form 1040X, “Amended U.S.
Tax

Haven't Filed Last Year's Tax Return? Here's What to do

The IRS says it hears many reasons from taxpayers for not filing a tax return. You may not have known whether you were required to file. Whatever the reason, it’s best to file your return as soon as you can. If you need help, even with a late return, the IRS is ready to assist you.The failure to file a return can be costly — whether you end up owing more or miss out on a refund. If you owe taxes, a delay in filing may result in a "failure to file" penalty and interest charges.
Tax

IRS Suspends Requirement to File Form 5500, Schedule F

Effective immediately, the Internal Revenue Service has indefinitely suspended the requirement for taxpayers to file Schedule F (Form 5500) "Fringe Benefit Plan Annual Information Return." This is part of the agency’s ongoing commitment to reduce unnecessary taxpayer burden."This IRS effort will simplify tax administration and eliminate the filing of about 200,000 forms each year," said Larry Langdon, Commissioner of the IRS’s Large and Mid-Size Business Division.The suspension of the requirement to file Schedule F is outlined in Notice 2002-24.
Tax

H&R Block Offers No-Interest Loans to Cash-Strapped Customers

In a continuing effort to find ways to secure the loyalty of its customer base, H&R Block has announced that it is offering 90 day no-interest loans on amounts ranging from $300 to $5,000 to help its customers who owe money to the IRS.Block's Easy Pay balance-due loan is interest free if paid off by July 13, 2002. All outstanding loans will be assessed a finance charge retroactive to April 15, 2002."We wanted to provide the millions of taxpayers who will end up owing taxes with three months of interest-free breathing room," said Mark A.
Tax

Common Errors to Avoid

The IRS recommends reviewing your entire tax return to be sure it is accurate and complete. Even a simple mistake can cause problems with your tax return, which might lead to delays in processing your return and receiving your refund.Want to avoid frequent trouble spots? Check these areas, which can reduce problems:Use the peel-off label. You may line through and make necessary corrections right on the label. Be sure to fill in your Social Security number in the box provided on the return.
Tax

What to do if You Can't Pay Your Taxes

If this year’s tax filing deadline will be a “pay” day for you and you cannot pay the full amount that you owe, you should still file your return by the due date and pay as much as you can. The IRS may allow you to pay any remaining balance over time in monthly installments through an Installment Agreement or possibly even settle for less than the full amount owed through its Offer in Compromise program.If you find that you cannot pay the full amount by the filing deadline, you should file your return and pay as much as you can by the due date.
Tax

Deloitte to Absorb a 'Significant Number' of Andersen Tax Professionals

Andersen announced on Thursday that a significant number of its U.S. tax partners and other professionals will join Deloitte and Touche. A memorandum of understanding outlining the plan was signed by Andersen. The deal is expected to be finalized by April 30."This transaction is fully consistent with our commitment to move quickly on the Andersen reforms initiated by Mr.

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