Tax news


IRS Increases Standard Deduction, Exemptions, Thresholds

The IRS has released Revenue Procedure 2001-59 which includes the new 2002 tax tables as well as numerous inflation-related changes to tax deductions, credits, and exemptions.The 2002 standard deduction is increased to the following amounts:$7,850 for married filing jointly and surviving spouses$6.900 for heads of households$4,700 for single $3,925 for married f

IRS Announces Change that Favors Small Businesses

Nearly two years ago, the IRS released guidelines requiring many businesses with revenue over $1 million to use the accrual method of accounting instead of the cash method.

IRS Issues Guidance on Qualified Tuition Programs

The following article is provided courtesy of CCH, Inc.The IRS has provided guidance with respect to recordkeeping and reporting requirements applicable to qualified tuition programs (QTPs) described in Code Sec. 529, in light of the amendments made to that statute by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (P.L. 107-16).

Mellon Bank Tax Return Problem Gets Worse

Earlier this year it was disclosed that, in the spring of 2001, employees at Pittsburgh's Mellon Bank tax processing center, responsible for processing tax returns for the states in the northeast, hid and in some cases destroyed by shredding at least 40,000 federal income tax returns and accompanying payments.The amount of the destroyed tax return checks was estimated to be at least $810 million.Now it appears that the number of mishandled tax returns excee

End-of-Year Tax Strategies for Investors

By Julian Block, attorney and former IRS investigatorTime is running out on your opportunities to save taxes for 2001. Here are some tips to guide you in your search for steps to take by Dec. 31.CAPITAL GAINS. There is a break for long-term capital gains from sales of stocks and other investments owned more than 12 months. The top rate is 20 percent, versus a top rate of 39.1 percent for "ordinary income," which is IRS jargon for income from sources such as salaries, business profits, dividends, and interest.CAPITAL LOSSES.

IRS: Lower Interest Rate on Tax Over/Underpayments

The IRS has announced the following new quarterly interest rates for overpayments and underpayments of taxes, all of which represent a drop of one percentage point: 6% for overpayments 5% for corporate overpayments 3.5% for the portion of a corporate overpayment exceeding $10,000 6% for underpayments The new interest rates will be effective for the quarter beginning January 1, 2002.

IRS Releases 2002 Withholding Tables

The IRS has released the income tax withholding and advance earned income credit payment tables for 2002.

IRS Warns of Sham Charities Looking for Used Cars

The IRS is warning taxpayers to watch out for charities that are clamoring for used car donations as the year winds down. The last month of the year is typically a busy time for charities to collect from taxpayers hoping to generate a year-end tax deduction.Before donating a vehicle to charity, the IRS suggests you make sure the charity is a bona fide tax exempt organization, which you can do easily by examining IRS Publication 78, Cumulative List of Organizations.

IRS Issues New Industry Guidelines

The IRS has announced tax guidance on three issues affecting auto dealerships, banks, and golf courses.

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Don`t Miss E-File Registration Deadline

Tax preparers are reminded that December 1 is the IRS deadline for registering for e-filing capabilities for the forthcoming tax filing season. Although the application may be filed after December 1, the IRS recommends filing by December 1 to ensure your participation in the e-file season beginning January 1. The IRS anticipates an increase in demand for e-filed tax returns, partly due to concerns about mail delivery resulting from concerns of bio-terrorism and issues with misplaced tax returns last tax season.

Congress At Odds Over Relief for Terrorism Victims

The following article is provided courtesy of CCH, Inc.When lawmakers begin their post-Thanksgiving recess conference on the Victims of Terrorism Tax Relief Bill of 2001 (HR 2884), which would provide income, estate, and payroll tax relief to victims of recent terrorist attacks, they will find that the Senate version, which was passed on November 16, contains a great deal more detail than the House's version of the bill, which was approved on Sep

Senate Pushing for Social Security Holiday

Senate Republicans are hopeful that they can tie a one-month Social Security holiday for all workers and employers to the economic stimulus package that is currently before Congress.

Cayman Islands No Longer a Tax Haven

Cayman Islands Governor, Peter J. Smith, is to sign an agreement today with Treasury Secretary, Paul O'Neill, and British Ambassador to the U.S., Christopher Meyer, which will open the vaults of secrecy on Cayman Islands bank accounts.Henceforth, the Cayman Islands will share information with the U.S. government, including the IRS, in an effort to track down tax evaders.

It's Time to Prepare for Internet Sales Tax

The Gartner research group has issued a warning that the current freeze on Internet sales taxes is temporary at best and that businesses involved in e-commerce should begin now to prepare themselves for the inevitable.Predicting that sales taxes on Internet sales will become a reality by 2003, the group suggests that it's not a matter of whether items will be taxed, it's a matter of when and how much.Gartner recommends that businesses begin planning to accommodate sales taxes by improving their online

IRS: Exempt Status of Charities Not at Risk

The following article is provided courtesy of CCH, Inc.The IRS has provided guidance to charities regarding payments made by reason of the death, injury or wounding of an individual as a result of the September 11, 2001, terrorist attacks against the United States.

Senate Approves Tax Relief Bill

The following article is provided courtesy of CCH, Inc.The Senate on November 16 approved, by voice vote, legislation that would provide tax relief to survivors and victims of the September 11 terrorist attacks. The measure, Victims of Terrorism Relief Bill of 2001 (HR 2884), would grant victims' families an exemption from estate and income taxes.Senate Finance Committee ranking member Charles E.

IRS Launches Fast Track Dispute Resolution Program

The Internal Revenue Service has launched a pilot program aimed at cutting the time it takes to resolve disputes between the tax agency and corporate taxpayers.The Large and Mid-Size Business Division Fast Track Dispute Resolution Pilot Program creates a new opportunity for corporate taxpayers to resolve outstanding issues early in the course of disagreements during the examination process.

President Approves IRS Funding, Expects Better Service

It looks like our tax collectors will be with us for another year. President Bush signed the legislation that provides funding for the Treasury Department and the IRS for fiscal year 2002.

IRS Issues Incentive Stock Options Guidelines

The following article is provided courtesy of CCH, Inc.The IRS has issued proposed regulations relating to incentive stock options (ISOs) described in Code Sec. 422(b) and options granted under an employee stock purchase plan (ESPP options) described in Code Sec. 423(b).


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