Tax news

Tax

1040PC Bites the Dust

The 1040PC provided a paper-saving method for filing tax returns, by presenting a scannable tax return prepared on a computer. The method didn’t quite catch on, and with the momentum that electronic filing has gained, the IRS feels the time is right for dropping the 1040PC format altogether.The 1040PC format will not exist in the spring of 2001, and will therefore not appear as an option on computer programs that prepare tax returns.
Tax

Audits of Low Income Taxpayers on the Rise

A recent study by Syracuse University has confirmed that for the first time ever, low income taxpayers are more likely to be audited by the IRS than high income taxpayers.Low income taxpayers, defined as the "working poor" with annual income below $25,000, are being targeted to catch fraudulent claims of earned income tax credits.Audits of low income taxpayers, which the study said also included taxpayers who don't file any taxes (income = $0), generally are handled through computer generated correspondence.
Tax

IRS Announces New Specialty Areas for Businesses

New specialty areas in the IRS’s Large and Mid-Sized Business division are geared toward helping businesses file and pay their taxes correctly.
Tax

House and Senate Join Forces to Change New Small Business Tax Ruling

The small business committee chairmen from the U.S. Senate and House have joined forces to ask Treasury Secretary Lawrence Summers to rethink the recent release of Revenue Procedure 2000-22, which requires small businesses with average annual gross receipts of over $1,000,000 to use the accrual method of accounting.Previous law provided a threshold of $5,000,000 in annual gross receipts before the accrual method was required.
Tax

Reality Check: Tax Breaks on Stock Options

Current legislation swiftly moving through the House of Representatives could ensure that employees receive tax incentive breaks when they exercise their right to purchase stock from their employers.Controversy exists, of course. Labor unions and Democrats have gone public in saying that the legislation needs to make certain employees don't abuse this privilege by replacing traditional retirement plans with stock buys.Current rules state that employees have to pay taxes when they buy shares.
Tax

VAT in Lebanon a Sticky Situation

Implementing the VAT (value-added tax) in many countries across the world is a no-brainer in most arenas. However, in Lebanon, where the VAT begins in about eight months, the government may not be ready to face the VAT's reality in actually collecting the tax.Why? Reports state that the government in Lebanon has had a hard time implementing income and property taxes.
Tax

Got a Problem With the IRS?

The IRS has declared Saturday May 20 as National Problem Solving Day.Since the IRS' Problem Solving Days began in November 1997, over 63,000 people have been given assistance through appointments, walk-in service or over the telephone. In most cases, they are given assistance and were able to resolve their problem. In the other cases, taxpayers are given advice or information about why they can't be helped further. Many other taxpayers who called to set up an appointment for Problem Solving Days have their problems taken care of over the phone and never need to visit the IRS.
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.

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