Tax news

Tax

House Extends Internet Tax Moratorium

In a move sure to appeal to the important high-tech industry, the US House of Representatives has approved a five year extension on the moratorium on Internet taxation.The moratorium, which allows for e-commerce to be conducted free from any federal taxation issues, is seen as a way to continue encouraging the growth of a new medium, but at the same time does not address the even more important issue of state taxation of electronic commerce activities.Cynics may say that the move is a purely political one, coming in an election year when politicians are looking to the growing high tech i
A&A

IRS Shock Wave About to Hit Small Businesses

In a surprise move, the IRS, without seeking input from small business owners and other interested groups, is preparing to release a new set of guidelines that will require many businesses with revenue over $1 million to use the accrual method of accounting. These guidelines are due to be released next week.Current law requires that businesses with revenue over $5 million must use the accrual method of accounting. Most businesses with revenue that is beneath this threshold may opt to use the accrual method, or may use the cash method of accounting.
Tax

Estate Tax Audits Resulting in Fewer Changes, Reduced Tax

The Wall Street Journal reported today that approximately 40% of audits of 1992 estate tax returns resulted in either no change or a reduced tax. The IRS audited about 19% of all estate tax returns filed for 1992.In many cases a reduced tax resulted from a decline in the value of property originally reported on the estate return.Nearly 20 percent of the 1992 estate returns that were examined resulted in no change in the tax computation. The results of the 1992 audit are being heralded as good news.
A&A

IRS Provides Tax Relief for Small Businesses

Businesses that must account for inventories and that have a three-year average of $1 million or less in gross receipts now have an option of using the cash method of accounting. Effective for tax years ending in December 1999, a new Revenue Procedure may result in tax savings for many small businesses.The IRS has issued Revenue Procedure 2000-22 which provides an exception to the accrual accounting rules for small taxpayers, which are defined as taxpayers with average annual gross receipts of $1 million or less.
Tax

Treasury Seeks To Curb Tax Shelters

The Wall Street Journal today reported that Treasury Secretary Lawrence Summers has asked a core group of some of the nation’s top accountants, lawyers and investment firms to join him in a series of meetings to limit corporate tax shelters.According to reports, Summers and the group will focus on how to strengthen the Treasury’s rules that govern the various professions, like accounting, that are associated with the tax-shelter industry.In addition to helping solve the problem, any further legislation related to this area looks like it will not happen this year.
Tax

Accomplished Author, Tax Expert Joins AccountingWEB, Inc.

AccountingWEB, Inc. is pleased to announce the addition of Gail Perry to its team. Perry is a CPA, tax specialist, author, speaker and instructor. Her column, “Fun With Taxes,” provides readers with practical tax insights and advice presented in plain English with a touch of humor.
Tax

GAO Reports IRS Not at Fault

In a report made public this week, the U.S.
Tax

IRS: Spending Millions To Collect Hundreds

A recently completed audit by the General Accounting Office shows that the IRS routinely sends notices to millions of Americans about mistakes in their returns, often involving amounts due of less than $5 or refunds of less than $1.Depending on the circumstances, it costs the IRS between 42 cents and $14.32, including staff labor, to prepare and send each of these notices, the GAO estimated.The IRS has indicated that it is upgrading its communications systems to avoid duplicate notices and past due notices that have already been paid.But by law, the IRS is required to notify taxpayers
Tax

$500,000 Profit in 90 days

We tried to tell you.Back on the 20th of January, AccountingWEB ran a story on the auction of the domain name www.taxes.com.At the time the asking price was just $260,000.Here we are 90 days later, and the current bid for the domain name is at a whopping $700,000!Some quick thinking deep-pocketed firm could have made a nice windfall this quarter. So, the price is now $700,000.
Technology

H&R Block Site Down for Short Time

Tax filing giant H&R Block just can't get a break.This week--when electronic filing will be at an all-time peak--the H&R Block Web site, which has catered in the past few months to thousands of electronic tax filers, accidentally went down for two horus during routine maintenance.Two hours doesn't seem like a long time to the average person, but if you are trying to file taxes and cannot access the site, it seems like an eternity.Naysayers are commenting that this is evidence of the tremendous power of Internet in allowing the filing capability onl
Tax

NYC Repeals Commuter Tax Worth $360 Million

What's good for the goose may not be good for the gander - the New York Court of Appeals ruled Tuesday that the city of New York must tax every one of its commuters, or none at all.
Workplace Fitness

More Busy Season Stress Busters

Welcome, I'm glad you took time out to join us! Is it stressful in your firms?Jane: I have many ideas to share!Session Moderator: Great, Jane! Why don't you get us started.Jane: Well, we have stress-busting (called "Hoopla") every Friday here. It usually involves food!Session Moderator: Can you share details - how does it work?Lara Niles: FOOD! Our office too seems to deal with stress with food! We call it the tax season 10 (meaning 10 lbs.!)Jane: That is so true!Coy: We bring lots of food as well!
Tax

IRS Highlights Top Errors So Far

The Internal Revenue Service is always looking for ways to assist tax preparers and has set up a web site highlighting the top errors paid preparers are making on this years tax returns.The "Top Ten" list covers paper returns for 1040's, 1040A's and 1040EZ's.From the IRS' list, here are the Top Ten mistakes on 1040 returns so far this tax season:Taxpayer identification numbers or names for dependents didn't match IRS or SSA records. We didn't allow the exemptions.
Tax

OrrTax Offers Credit Option

OrrTax Software, the Washington state-based provider of tax services, including the popular IntelliTax service, is one of a handful of companies certified by the IRS to process credit card transactions for taxpayers.Anticipating the approval for some time, the ability to process payments already is included in current versions of the software.Orrtax is partnering with Official Payments Corporation (OPC, formerly US Audiotex), to process transactions on American Express, MasterCard and Discover.
Tax

St. Patrick's Day Green: IRS is Hiring

Finding the pot o'gold at the end of the rainbow has reached the IRS, who asked Congress on Thursday for approval to hire 2,000 more employees as part of the Service's proposed 9.5 percent budget increase.Several thousand more employees would enable the IRS to step up its audit investigations, and without the increase, Commissioner Rossotti said more taxpayers may be forced to cheat on their taxes.Overall projected budget is $8.8 billion for fiscal 2001 for an increase of $769 million dollars.
Tax

E-Returns Expected to Grow to 50 percent of Total by 2007

According to recent statistics suggested by the IRS, basic tax returns that are filed electronically in 2007 are expected to total almost 50 percent of all returns filed during a typical tax season. Last year the total was 125.1 million returns.In 2000 alone, it is expected that 33.6 million returns will be filed over the Internet for 26.5 percent of the total.
A&A

Local CPAs Compete With Larger, Online Preparers

It's finally happened: a group of CPAs think they build a better mousetrap--or online tax preparation service--than the big guys like H&R Block, Intuit and H.D. Vest.The company is based in Encino, CA, and is called Taxes4Less.com. It is run by Russell Gotlich and Gregory Yulish, both formerly with Arthur Andersen.One of the main differences between their company and the larger ones is the ability to personally attend to tax returns and complete the electronic transaction.
Technology

Analysis Says TurboTax is Killer App

CPAs and accounting professionals often are asked about the advantages of filing online. Here's a new angle to an already crowded playing field: Annette Hamilton of ZDNet News has christened Intuit's TurboTax the next "killer app."The accounting news channels have been filled with story after story of online preparation sites, including H&R Block, H.D. Vest and Intuit.
Tax

IRS Features Missing Children on Tax Forms

No white space allowed here; the IRS is delivering a quality public service by featuring the photos of missing or lost children on the blank pages of its forms.Some could say this is an effort in conjunction with the Service's child tax credit, now worth $100 more than it was in 1998 at $500.In other tax news, IRS officials say there is nothing truly new in 1999 forms, just changes in figures here and there. Taxpayers and tax preparers are urged by the IRS to review the numbers carefully for potential pitfalls in preparation.
A&A

3,500 Trades on Schedule D!

How many CPAs have ever seen a tax return with 3,500 trades on Schedule D? In this escalating time of the "day-traders," more and more accounting professionals may one day be faced with a similar situation.David Goehl is a 31-year-old, self-employed lawyer, who traded 3,500 times in 1999 for a net profit of $85,000, which averages to trades worth about $1,000 per day after taxes, commissions, rent on the apartment where he performs the trades and even a portion of his cable service.Schedule D is often difficult for any tax preparer given a small number of trades, let alone 3,500.

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